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 JUNE 30, 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

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

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  ☒

As of July 30, 2019, there were 19,298,261 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	21
Item 3	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4	Controls and Procedures	27
PART II - OTHER INFORMATION
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 6	Exhibits	28

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, and 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)

	June 30, 2019			December 31, 2018
	(unaudited)
Assets
Investments:
Fixed maturity securities—held-to-maturity, at amortized cost (fair value    $629,207 and $616,772 in 2019 and 2018, respectively)	$	610,950		$	613,878
Fixed maturity securities—available-for-sale, at fair value (cost $445,117 and    $479,772 in 2019 and 2018, respectively)		457,893			478,730
Equity securities, at fair value (cost $22,582 and $19,962 in 2019    and 2018, respectively)		24,070			18,651
Short-term investments		70,146			14,231
Total investments		1,163,059			1,125,490
Cash and cash equivalents		51,246			40,344
Amounts recoverable from reinsurers		103,695			112,006
Premiums receivable, net of allowance		175,020			162,478
Deferred income taxes		19,461			21,852
Accrued interest receivable		10,086			10,197
Property and equipment, net		5,957			6,258
Deferred policy acquisition costs		20,550			19,734
Other assets		22,019			17,572
Total assets	$	1,571,093		$	1,515,931
Liabilities and shareholders’ equity
Liabilities:
Reserves for loss and loss adjustment expenses	$	795,046		$	798,409
Unearned premiums		156,889			149,296
Amounts held for others		44,064			41,388
Policyholder deposits		46,095			46,795
Insurance-related assessments		30,253			28,258
Federal income tax payable		1,325			3,412
Accounts payable and other liabilities		38,325			38,611
Payable for investments purchased		9,653			—
Total liabilities		1,121,650			1,106,169
Shareholders’ equity:
Common stock:  voting—$0.01 par value authorized shares—50,000,000    in 2019 and 2018; 20,556,511 and 20,528,230 shares issued and 19,298,261    and 19,269,980  shares outstanding in 2019 and 2018, respectively		205			205
Additional paid-in capital		212,493			211,431
Treasury stock, at cost (1,258,250 shares in 2019 and 2018)		(22,370	)		(22,370	)
Accumulated earnings		248,975			221,328
Accumulated other comprehensive income (loss), net		10,140			(832	)
Total shareholders’ equity		449,443			409,762
Total liabilities and shareholders’ equity	$	1,571,093		$	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						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Revenues
Gross premiums written	$	87,018		$	93,702		$	180,125		$	191,044
Ceded premiums written		(2,204	)		(2,369	)		(4,634	)		(4,699	)
Net premiums written	$	84,814		$	91,333		$	175,491		$	186,345
Net premiums earned	$	82,951		$	88,995		$	167,899		$	176,305
Net investment income		8,169			7,303			16,184			14,512
Net realized losses on investments		(82	)		(1,111	)		(23	)		(1,142	)
Net unrealized gains (losses) on equity securities		642			76			2,800			(314	)
Fee and other income		73			117			83			194
Total revenues		91,753			95,380			186,943			189,555
Expenses
Loss and loss adjustment expenses incurred		48,868			52,076			98,482			105,238
Underwriting and certain other operating costs		7,416			7,985			14,968			15,831
Commissions		6,243			6,616			12,611			13,110
Salaries and benefits		6,059			6,681			12,806			12,607
Policyholder dividends		998			1,092			2,098			2,425
Total expenses		69,584			74,450			140,965			149,211
Income before income taxes		22,169			20,930			45,978			40,344
Income tax expense		4,279			3,974			8,688			7,219
Net income	$	17,890		$	16,956		$	37,290		$	33,125
Earnings per share
Basic	$	0.93		$	0.88		$	1.94		$	1.73
Diluted	$	0.93		$	0.88		$	1.93		$	1.72
Shares used in computing earnings per share
Basic		19,245,592			19,208,601			19,237,401			19,197,925
Diluted		19,306,953			19,266,735			19,316,276			19,275,883
Cash dividends declared per common share	$	0.25		$	0.22		$	0.50		$	0.44

See accompanying notes.

5

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Net income	$	17,890	$	16,956	$	37,290	$	33,125
Other comprehensive income:
Unrealized gain (loss) on debt securities, net of tax		4,980		153		10,972		(5,695	)
Change in deferred tax valuation allowance		198		—		—		—
Comprehensive income	$	23,068	$	17,109	$	48,262	$	27,430

See accompanying notes.

6

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Three Months Ended June 30, 2019 and 2018

(in thousands, except share data)

(unaudited)

	Common Stock					Additional Paid-In		Treasury Stock						Accumulated			Accumulated Other Comprehensive
	Shares		Amounts			Capital		Shares			Amounts			Earnings			Income			Total
Balance at March 31, 2019		20,533,230	$	205		$	211,700		(1,258,250	)	$	(22,370	)	$	235,908		$	4,962		$	430,405
Comprehensive income:
Net income		—		—			—		—			—			17,890			—			17,890
Other comprehensive    income:
Change in unrealized    gains, net of tax		—		—			—		—			—			—			4,980			4,980
Change in deferred tax    valuation allowance		—		—			—		—			—			—			198			198
Comprehensive income:																					23,068
Common stock issued		23,281		—			560		—			—			—			—			560
Share-based compensation		—		—			233		—			—			—			—			233
Dividends to shareholders		—		—			—		—			—			(4,823	)		—			(4,823	)
Balance at June 30, 2019		20,556,511	$	205		$	212,493		(1,258,250	)	$	(22,370	)	$	248,975		$	10,140		$	449,443
	Common Stock					Additional Paid-In		Treasury Stock						Accumulated			Accumulated Other Comprehensive
	Shares		Amounts			Capital		Shares			Amounts			Earnings			Loss			Total
Balance at March 31, 2018		20,519,165	$	205		$	210,441		(1,258,250	)	$	(22,370	)	$	246,028		$	(2,236	)	$	432,068
Comprehensive income:
Impact of adoption of    ASU 2016-01		—		—			—		—			—			(1	)		—			(1	)
Net income		—		—			—		—			—			16,956			—			16,956
Other comprehensive    income:
Change in unrealized    losses, net of tax		—		—			—		—			—			—			153			153
Comprehensive income:																					17,109
Common stock issued upon    exercise of options		—		(1	)		—		—			—			—			—			(1	)
Common stock issued		9,065		1			195		—			—			—			—			196
Share-based compensation		—		—			259		—			—			—			—			259
Dividends to shareholders		—		—			—		—			—			(4,239	)		—			(4,239	)
Balance at June 30, 2018		20,528,230	$	205		$	210,895		(1,258,250	)	$	(22,370	)	$	258,744		$	(2,083	)	$	445,391

See accompanying notes.

7

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Six Months Ended June 30, 2019 and 2018

(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		—		—		—		—			—			37,290			—			37,290
Other comprehensive    income:
Change in unrealized    losses, net of tax		—		—		—		—			—			—			10,972			10,972
Comprehensive income:																				48,262
Common stock issued upon    exercise of options		5,000		—		20		—			—			—			—			20
Common stock issued		23,281		—		560		—			—			—			—			560
Share-based compensation		—		—		482		—			—			—			—			482
Dividends to shareholders		—		—		—		—			—			(9,642	)		—			(9,642	)
Balance at June 30, 2019		20,556,511	$	205	$	212,493		(1,258,250	)	$	(22,370	)	$	248,975		$	10,140		$	449,443
	Common Stock				Additional Paid-In		Treasury Stock						Accumulated			Accumulated Other Comprehensive
	Shares		Amounts		Capital		Shares			Amounts			Earnings			Income (Loss)			Total
Balance at December 31, 2017		20,504,165	$	204	$	210,081		(1,258,250	)	$	(22,370	)	$	233,896		$	3,612		$	425,423
Comprehensive income:
Impact of adoption of    ASU 2016-01		—		—		—		—			—			614			—			614
Impact of adoption of    ASU 2018-02		—		—		—		—			—			(414	)		—			(414	)
Net income		—		—		—		—			—			33,125			—			33,125
Other comprehensive    income:
Change in unrealized    gains, net of tax		—		—		—		—			—			—			(5,695	)		(5,695	)
Comprehensive income:																				27,430
Common stock issued upon    exercise of options		15,000		—		67		—			—			—			—			67
Common stock issued		9,065		1		195		—			—			—			—			196
Share-based compensation		—		—		552		—			—			—			—			552
Dividends to shareholders		—		—		—		—			—			(8,477	)		—			(8,477	)
Balance at June 30, 2018		20,528,230	$	205	$	210,895		(1,258,250	)	$	(22,370	)	$	258,744		$	(2,083	)	$	445,391

See accompanying notes.

8

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Six Months Ended June 30,
	2019			2018
Operating activities
Net income	$	37,290		$	33,125
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		449			488
Net amortization of investments		4,483			5,979
Deferred income taxes		(526	)		831
Net realized losses on investments		23			1,142
Net unrealized (gains) losses on equity securities		(2,800	)		314
Share-based compensation		509			782
Changes in operating assets and liabilities:
Premiums receivable, net		(12,542	)		(15,658	)
Accrued interest receivable		111			177
Deferred policy acquisition costs		(816	)		(1,350	)
Amounts held by others		1			(7,855	)
Other assets		(947	)		942
Reserves for loss and loss adjustment expenses		(3,363	)		11,756
Unearned premiums		7,593			10,040
Reinsurance balances		8,317			(8,828	)
Amounts held for others and policyholder deposits		1,976			1,787
Accounts payable and other liabilities		(189	)		3,312
Net cash provided by operating activities		39,569			36,984
Investing activities
Purchases of investments held-to-maturity		(67,571	)		(38,129	)
Purchases of investments available-for-sale		(27,356	)		(52,211	)
Purchases of equity securities		(2,620	)		(4,339	)
Purchases of short-term investments		(79,224	)		(100,059	)
Proceeds from maturities of investments held-to-maturity		73,865			52,584
Proceeds from sales and maturities of investments available-for-sale		60,494			66,480
Proceeds from sales of equity securities		—			282
Proceeds from sales and maturities of short-term investments		23,679			13,465
Proceeds from redemptions of other investments		—			130
Purchases of property and equipment		(148	)		(1,004	)
Net cash used in investing activities		(18,881	)		(62,801	)
Financing activities
Proceeds from stock option exercises		20			67
Finance lease purchases		(23	)		—
Dividends to shareholders		(9,783	)		(8,633	)
Net cash used in financing activities		(9,786	)		(8,566	)
Change in cash and cash equivalents		10,902			(34,383	)
Cash and cash equivalents at beginning of period		40,344			55,559
Cash and cash equivalents at end of period	$	51,246		$	21,176

See accompanying notes.

9

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, and agriculture. Assets and revenues of AIIC and its subsidiaries represent at least 95% of comparable consolidated amounts of the Company for each of the six months ended June 30, 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 current guidance delays the recognition of credit losses until a probable loss has occurred.  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.

10

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 June 30, 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 June 30, 2019, the Company has two equity incentive plans: 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 were made under the AMERISAFE 2005 Incentive Plan.  There are no outstanding options or restricted stock awards under 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 six months ended June 30, 2019, the Company issued 9,391 shares of common stock pursuant to vested performance awards and 9,000 shares of restricted common stock to executive officers.  During the six months ended June 30, 2019, the Company issued 4,890 shares of restricted common stock to non-employee directors.  The market value of the shares issued totaled $1.4 million.  During the six months ended June 30, 2018, the Company issued 3,304 shares of common stock pursuant to vested performance awards to executive officers and 5,761 shares of restricted common stock to non-employee directors. The market value of the shares issued totaled $0.5 million.

During the six months ended June 30, 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 $20 thousand of stock option proceeds in the current year and $67 thousand of stock option proceeds in the same period of 2018.  

The Company recognized a negative share-based compensation expense of $0.1 million in the quarter ended June 30, 2019 due to lower estimates of variable share price based incentive compensation costs.  The Company recognized an expense of $0.8 million for the same period in 2018.  The Company recognized share-based compensation expense of $0.5 million in the six months ended June 30, 2019 and $0.8 million for the same period in 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				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
	(in thousands, except share and per share amounts)
Basic EPS:
Net income	$	17,890	$	16,956	$	37,290	$	33,125
Basic weighted average common shares		19,245,592		19,208,601		19,237,401		19,197,925
Basic earnings per common share	$	0.93	$	0.88	$	1.94	$	1.73
Diluted EPS:
Net income	$	17,890	$	16,956	$	37,290	$	33,125
Diluted weighted average common shares:
Weighted average common shares		19,245,592		19,208,601		19,237,401		19,197,925
Stock options and restricted stock		61,361		58,134		78,875		77,958
Diluted weighted average common shares		19,306,953		19,266,735		19,316,276		19,275,883
Diluted earnings per common share	$	0.93	$	0.88	$	1.93	$	1.72

11

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 June 30, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	439,103	$	15,966	$	(36	)	$	455,033
Corporate bonds		108,756		1,425		(17	)		110,164
U.S. agency-based mortgage-backed securities		12,465		523		(12	)		12,976
U.S. Treasury securities and obligations of U.S.    government agencies		49,677		430		(29	)		50,078
Asset-backed securities		949		10		(3	)		956
Totals	$	610,950	$	18,354	$	(97	)	$	629,207

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at June 30, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	220,385	$	9,852	$	(15	)	$	230,222
Corporate bonds		151,705		2,953		(39	)		154,619
U.S. agency-based mortgage-backed securities		11,904		6		(58	)		11,852
U.S. Treasury securities and obligations    of U.S. government agencies		61,123		301		(224	)		61,200
Totals	$	445,117	$	13,112	$	(336	)	$	457,893

The gross unrealized gains and losses on, and the cost of equity securities at June 30, 2019 are summarized as follows:

	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	22,582	$	1,488	$	—	$	24,070
Total equity securities	$	22,582	$	1,488	$	—	$	24,070

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

12

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 June 30, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	79,934	$	80,374
After one year through five years		216,626		220,476
After five years through ten years		84,179		87,047
After ten years		216,797		227,378
U.S. agency-based mortgage-backed securities		12,465		12,976
Asset-backed securities		949		956
Totals	$	610,950	$	629,207

A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as available-for-sale at June 30, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	49,966	$	50,018
After one year through five years		158,125		159,944
After five years through ten years		46,069		47,983
After ten years		179,053		188,096
U.S. agency-based mortgage-backed securities		11,904		11,852
Totals	$	445,117	$	457,893

13

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)
June 30, 2019
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	6,038	$	19	$	11,835	$	17	$	17,873	$	36
Corporate bonds		—		—		15,306		17		15,306		17
U.S. agency-based mortgage-backed securities		—		—		2,201		12		2,201		12
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		8,362		29		8,362		29
Asset-backed securities		—		—		177		3		177		3
Total held-to-maturity securities		6,038		19		37,881		78		43,919		97
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	—	$	—	$	7,008	$	15	$	7,008	$	15
Corporate bonds		—		—		22,346		39		22,346		39
U.S. agency-based mortgage-backed securities		—		—		10,588		58		10,588		58
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		39,120		224		39,120		224
Total available-for-sale securities		—		—		79,062		336		79,062		336
Total	$	6,038	$	19	$	116,943	$	414	$	122,981	$	433

	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

14

At June 30, 2019, we held 66 individual fixed maturity securities that were in an unrealized loss position, of which 61 individual fixed maturity securities were in a continuous unrealized loss position for longer than 12 months.

During the second quarter of 2019, we recognized through income $0.6 million of net unrealized gains on equity securities held as of June 30, 2019.  During the second quarter of 2018, we recognized through income $0.1 million of net unrealized gains on equity securities held as of June 30, 2018.  

During the six months ended June 30, 2019, we recognized through income $2.8 million of net unrealized gains on equity securities held as of June 30, 2019.  During the six months ended June 30, 2018, we recognized through income $0.3 million of net unrealized losses on equity securities held as of June 30, 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 and six months ended June 30, 2019 and 2018, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments.

Net realized losses in the quarter ended June 30, 2019 were $0.1 million resulting from the call of fixed maturity securities.  Net realized losses in the quarter ended June 30, 2018 were $1.1 million resulting from the sale of fixed maturity securities classified as available-for-sale.

Net realized losses in the six months ended June 30, 2019 were immaterial.  Net realized losses in the six months ended June 30, 2018 were $1.1 million resulting from the sale of fixed maturity securities classified as available-for-sale.

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 June 30, 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 June 30, 2019 and 2018.

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

15

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 internally and periodically evaluated with our independent actuary.  Adjustments are made as experience develops and 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 six months ended June 30, 2019 and 2018:

	Six Months Ended June 30,
	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		121,727			126,060
Prior accident years		(23,245	)		(20,822	)
Total incurred		98,482			105,238
Less paid related to:
Current accident year		15,926			18,386
Prior accident years		77,362			84,194
Total paid		93,288			102,580
Net balance, end of period		696,387			689,614
Add amounts recoverable from reinsurers    on unpaid loss and loss adjustment expenses		98,659			93,987
Balance, end of period	$	795,046		$	783,601

The foregoing reconciliation reflects favorable development of the net reserves at June 30, 2019 and June 30, 2018. The favorable development reduced loss and loss adjustment expenses incurred by $23.2 million and $20.8 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 $23.1 million for the three months ended June 30, 2019, compared to $17.1 million for the three months ended June 30, 2018.  Comprehensive income was $48.3 million for the six months ended June 30, 2019, compared to $27.4 million for the same period in 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.

16

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 June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(in thousands)
Beginning balance	$	4,962		$	(2,236	)	$	(832	)	$	3,612
Other comprehensive income (loss) before    reclassification		5,001			(449	)		10,889			(5,863	)
Amounts reclassified from accumulated other    comprehensive income		(21	)		602			83			168
Change in deferred tax valuation allowance		198			—			—			—
Net current period other comprehensive    income (loss)		5,178			153			10,972			(5,695	)
Ending balance	$	10,140		$	(2,083	)	$	10,140		$	(2,083	)

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	Three Months Ended						Six Months Ended						Affected line item in the
Comprehensive Income	June 30,						June 30,						statement of income
	2019			2018			2019			2018
	(in thousands)
Unrealized gains (losses) on    available-for-sale securities	$	26		$	(762	)	$	(105	)	$	(466	)	Net realized losses on    investments
		26			(762	)		(105	)		(466	)	Income before income taxes
		(5	)		160			22			44		Income tax expense
	$	21		$	(602	)	$	(83	)	$	(422	)	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.

17

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 six months ended June 30, 2019.

At June 30, 2019, assets measured at fair value on a recurring basis are summarized below:

	June 30, 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	$	—	$	230,222	$	—	$	230,222
Corporate bonds		—		154,619		—		154,619
U.S. agency-based mortgage-backed securities		—		11,852		—		11,852
U.S. Treasury securities		61,200		—		—		61,200
Total securities available-for-sale—fixed maturity		61,200		396,693		—		457,893
Equity securities:
Domestic common stock		24,070		—		—		24,070
Total	$	85,270	$	396,693	$	—	$	481,963

18

At June 30, 2019, assets measured at amortized cost are summarized below:

	June 30, 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	$	—	$	455,033	$	—	$	455,033
Corporate bonds		—		110,164		—		110,164
U.S. agency-based mortgage-backed securities		—		12,976		—		12,976
U.S. Treasury securities		7,882		—		—		7,882
Obligations of U.S. government agencies		—		42,196		—		42,196
Asset-backed securities		—		956		—		956
Total held-to-maturity	$	7,882	$	621,325	$	—	$	629,207

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 June 30, 2019, the Company did not hold any securities measured at fair value on a nonrecurring basis due to impairment.

19

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  June 30, 2019				As of  December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Assets:
Fixed maturity securities—held-to-maturity	$	610,950	$	629,207	$	613,878	$	616,772
Fixed maturity securities—available-for-sale		457,893		457,893		478,730		478,730
Equity securities		24,070		24,070		18,651		18,651
Short-term investments		70,146		70,146		14,231		14,231
Cash and cash equivalents		51,246		51,246		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 six months ended June 30, 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 2 months to 55 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:

	June 30, 2019			Balance Sheet Classification
	(in thousands)
Operating leases:
Operating lease right-of-use assets	$	501		Other assets
Operating lease liabilities	$	501		Accounts payable and other liabilities
Finance leases:
Finance lease right-of-use assets	$	185
Finance lease accumulated amortization    right-of-use assets		(149	)
Property and equipment, net	$	36		Property and equipment, net
Finance lease liabilities	$	78		Accounts payable and other liabilities

Note 11. Subsequent Events

On July 30, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share payable on September 20, 2019 to shareholders of record as of September 6, 2019. The Board considers the payment of a regular cash dividend each calendar quarter.

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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 and six months ended June 30, 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 and six months ended June 30, 2019 and 2018.

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(dollars in thousands, except per share data)
	(unaudited)
Gross premiums written	$	87,018		$	93,702		$	180,125		$	191,044
Net premiums earned		82,951			88,995			167,899			176,305
Net investment income		8,169			7,303			16,184			14,512
Total revenues		91,753			95,380			186,943			189,555
Total expenses		69,584			74,450			140,965			149,211
Net income		17,890			16,956			37,290			33,125
Diluted earnings per common share	$	0.93		$	0.88		$	1.93		$	1.72
Other Key Measures
Net combined ratio (1)		83.9	%		83.6	%		84.0	%		84.7	%
Return on average equity (2)		16.3	%		15.5	%		17.4	%		15.2	%
Book value per share (3)	$	23.29		$	23.11		$	23.29		$	23.11

(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 June 30, 2019 Compared to June 30, 2018

Gross Premiums Written. Gross premiums written for the quarter ended June 30, 2019 were $87.0 million, compared to $93.7 million for the same period in 2018, a decrease of 7.1%. The decrease was attributable to a $4.6 million decrease in annual premiums on voluntary policies written during the period and a $2.0 million decrease in premiums resulting from payroll audits and related premium adjustments for policies written in previous quarters.  The effective loss cost multiplier, or ELCM, for our voluntary business was 1.61 for the second quarter ended June 30, 2019 compared to 1.66 for the same period in 2018.

Net Premiums Written. Net premiums written for the quarter ended June 30, 2019 were $84.8 million, compared to $91.3 million for the same period in 2018, a decrease of 7.1%. The decrease was primarily attributable to the decrease in gross premiums written. As a percentage of gross premiums earned, ceded premiums were 2.6% for the second quarter of 2019 and 2018.  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 second quarter of 2019 were $83.0 million, compared to $89.0 million for the same period in 2018, a decrease of 6.8%. The decrease was primarily attributable to the decrease in net premiums written during the period.

Net Investment Income. Net investment income for the quarter ended June 30, 2019 was $8.2 million, compared to $7.3 million for the same period in 2018, an increase of 11.9%.  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 June 30, 2019 and 2018. The pre-tax investment yield on our investment portfolio was 2.7% per annum during the quarter ended June 30, 2019 compared to 2.5% 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 June 30, 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 losses on investments for the three months ended June 30, 2019 totaled $0.1 million compared to net realized losses of $1.1 million for the same period in 2018. Net realized losses in the second quarter of 2019 were attributable to the call of fixed maturity securities.  Net realized losses in the second quarter of 2018 were attributable to the sale of fixed maturity securities classified as available-for-sale.

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Net Unrealized Gains (Losses) on Equity Securities. Net unrealized gains on equity securities for the three months ended June 30, 2019 were $0.6 million compared to net unrealized gains of $0.1 million for the same period in 2018.

Loss and Loss Adjustment Expenses Incurred. Loss and loss adjustment expenses (“LAE”) incurred totaled $48.9 million for the three months ended June 30, 2019, compared to $52.1 million for the same period in 2018, a decrease of $3.2 million, or 6.2%. The current accident year loss and LAE incurred were $60.1 million, or 72.5% of net premiums earned, compared to $63.6 million, or 71.5% of net premiums earned for the same period in 2018. We recorded favorable prior accident year development of $11.3 million in the second quarter of 2019, compared to favorable prior accident year development of $11.6 million in the same period of 2018, as further discussed below in “Prior Year Development.” Our net loss ratio was 58.9% in the second quarter of 2019, compared to 58.5% 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 June 30, 2019 were $19.7 million, compared to $21.3 million for the same period in 2018, a decrease of 7.3%. This decrease was primarily due to a $0.9 million decrease in insurance related assessments, a $0.6 million decrease in compensation expense due to lower estimates of variable share price based incentive compensation costs and a $0.4 million decrease in commission expense.  Our expense ratio was 23.8% in the second quarter of 2019 compared to 23.9% in the second quarter of 2018.

Income Tax Expense. Income tax expense for the three months ended June 30, 2019 was $4.3 million, compared to $4.0 million for the same period in 2018. The increase was attributable to an increase in the pre-tax income to $22.2 million in the quarter ended June 30, 2019 from $20.9 million in the same period in 2018. The effective tax rate for the Company increased to 19.3% in the quarter ended June 30, 2019 from 19.0% 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 second quarter of 2018.

Consolidated Results of Operations for Six Months Ended June 30, 2019 Compared to June 30, 2018

Gross Premiums Written. Gross premiums written for the first six months of 2019 were $180.1 million, compared to $191.0 million for the same period in 2018, a decrease of 5.7%. The decrease was primarily attributable to a $9.8 million decrease in annual premiums on voluntary policies written during the period and a $0.8 million decrease in premiums resulting from payroll audits and related premium adjustments for policies written in previous quarters.  The ELCM for our voluntary business was 1.60 for the six months ended June 30, 2019 compared to 1.64 for the same period in 2018.

Net Premiums Written. Net premiums written for the six months ended June 30, 2019 were $175.5 million, compared to $186.3 million for the same period in 2018, a decrease of 5.8%. The decrease was primarily attributable to the decrease in gross premiums written. As a percentage of gross premiums earned, ceded premiums were 2.7% for the first six months of 2019 compared to 2.6% for the same period in 2018.  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 six months of 2019 were $167.9 million, compared to $176.3 million for the same period in 2018, a decrease of 4.8%. The decrease was primarily attributable to the decrease in net premiums written during the period.

Net Investment Income. Net investment income for the first six months of 2019 was $16.2 million, compared to $14.5 million for the same period in 2018, an increase of 11.5%. 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 six months ended June 30, 2019 and 2018. The pre-tax investment yield on our investment portfolio was 2.7% per annum during the six months ended June 30, 2019 compared to 2.4% per annum for the same period in 2018. The tax-equivalent yield on our investment portfolio was 3.1% per annum for the first six months of 2019 compared to 2.9% in 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 losses on investments for the six months ended June 30, 2019 were immaterial compared to net realized losses of $1.1 million for the same period in 2018.  Net realized losses in the first six months of 2019 were attributable to calls of fixed maturity securities.   Net realized losses in the first six months of 2018 were attributable to the sale of fixed maturity securities classified as available-for-sale.

Net Unrealized Gains (Losses) on Equity Securities. Net unrealized gains on equity securities for the six months ended June 30, 2019 were $2.8 million compared to net unrealized losses of $0.3 million for the same period in 2018.

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Loss and Loss Adjustment Expenses Incurred. Loss and LAE incurred totaled $98.5 million for the six months ended June 30, 2019, compared to $105.2 million for the same period in 2018, a decrease of $6.8 million, or 6.4%. The current accident year loss and LAE incurred were $121.7 million, or 72.5% of net premiums earned, compared to $126.1 million, or 71.5% of net premiums earned, for the same period in 2018. We recorded favorable prior accident year development of $23.2 million in the first six months of 2019, compared to favorable prior accident year development of $20.8 million in the same period of 2018, as further discussed below in “Prior Year Development.” Our net loss ratio was 58.7% in the first six months of 2019, compared to 59.7% 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 six months ended June 30, 2019 were $40.4 million, compared to $41.5 million for the same period in 2018, a decrease of 2.8%. This decrease was primarily due to a $0.7 million decrease in insurance related assessments, a $0.5 million decrease in commission expense and a $0.4 million decrease in premium tax expense.  Offsetting these decreases was a $0.3 million increase in accounts receivable write-offs.  Our expense ratio was 24.1% in the first six months of 2019 compared to 23.6% in the same period of 2018.

Income Tax Expense. Income tax expense for the six months ended June 30, 2019 was $8.7 million, compared to $7.2 million for the same period in 2018. The increase was attributable to an increase in pre-tax income to $46.0 million in the first six months of 2019 from $40.3 million in the first six months of 2018. The effective tax rate for the Company increased to 18.9% for the six months ended June 30, 2019 from 17.9% for the six months ended June 30, 2018.  The increase in the effective tax rate is due to a lower proportion of tax-exempt income to underwriting income and an increase of $0.2 million for the change in valuation allowance for deferred tax assets for the six months ended June 30, 2019 compared with the six months ended June 30, 2018.

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 $39.6 million for the six months ended June 30, 2019, which represented a $2.6 million increase from $37.0 million in net cash provided by operating activities for the six months ended June 30, 2018. This increase in operating cash flow was attributable to a $9.2 million decrease in loss and loss adjustment expenses paid and a $7.9 million decrease in the change in amounts held by others.  Offsetting these amounts were a $7.7 million decrease in premiums collected, a $5.4 million increase in federal income taxes paid, a $0.7 million increase in underwriting and other operating expenses paid, and a $0.6 million increase in dividends paid to policyholders.

Net cash used in investing activities was $18.9 million for the six months ended June 30, 2019, compared to net cash used in investment activities of $62.8 million for the same period in 2018. Cash provided by sales and maturities of investments totaled $158.0 million for the six months ended June 30, 2019, compared to $132.8 million for the same period in 2018. A total of $176.8 million in cash was used to purchase investments in the six months ended June 30, 2019, compared to $194.7 million in purchases for the same period in 2018.

Net cash used in financing activities in the six months ended June 30, 2019 was $9.8 million compared to net cash used in financing activities of $8.6 million for the same period in 2018. In the six months ended June 30, 2019, $9.8 million of cash was used for dividends paid to shareholders compared to $8.6 million in the same period of 2018.  

Investment Portfolio

Our investment portfolio, including cash and cash equivalents, totaled $1.2 billion at June 30, 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.

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The composition of our investment portfolio, including cash and cash equivalents, as of June 30, 2019, is shown in the following table:

	Carrying Value		Percentage of Portfolio
	(in thousands)
Fixed maturity securities—held-to-maturity:
States and political subdivisions	$	439,103		36.1	%
Corporate bonds		108,756		9.0	%
U.S. agency-based mortgage-backed securities		12,465		1.0	%
U.S. Treasury securities and obligations of    U.S. government agencies		49,677		4.1	%
Asset-backed securities		949		0.1	%
Total fixed maturity securities—held-to-maturity		610,950		50.3	%
Fixed maturity securities—available-for-sale:
States and political subdivisions		230,222		19.0	%
Corporate bonds		154,619		12.7	%
U.S. agency-based mortgage-backed securities		11,852		1.0	%
U.S. Treasury securities and obligations of    U.S. government agencies		61,200		5.0	%
Total fixed maturity securities—available-for-sale		457,893		37.7	%
Equity securities		24,070		2.0	%
Short-term investments		70,146		5.8	%
Cash and cash equivalents		51,246		4.2	%
Total investments, including cash and cash equivalents	$	1,214,305		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 and six months ended June 30, 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 $11.3 million in the three months ended June 30, 2019. The table below sets forth the favorable development for the three and six months ended June 30, 2019 and 2018 for accident years 2014 through 2018 and, collectively, for all accident years prior to 2014.

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(in millions)
Accident Year
2018	$	—	$	—	$	—	$	—
2017		1.3		—		1.3		—
2016		3.3		3.2		9.3		3.2
2015		2.9		3.4		5.0		9.4
2014		2.3		1.4		4.3		4.3
Prior to 2014		1.5		3.6		3.3		3.9
Total net development	$	11.3	$	11.6	$	23.2	$	20.8

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The table below sets forth the number of open claims as of June 30, 2019 and 2018, and the number of claims reported and closed during the three and six months then ended.

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Open claims at beginning of period		4,963			4,943			5,190			4,982
Claims reported		1,339			1,386			2,560			2,645
Claims closed		(1,324	)		(1,307	)		(2,772	)		(2,605	)
Open claims at end of period		4,978			5,022			4,978			5,022

The number of open claims at June 30, 2019 decreased by 44 claims as compared to the number of open claims at June 30, 2018. At June 30, 2019, our incurred amounts for certain accident years, particularly 2017, 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 June 30, 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.

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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.

27

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 June 30, 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 June 30, 2019 under this program.  There were no shares repurchased during the three months ended June 30, 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
10.1	Employment Agreement effective as of May 20, 2019 by and between the Company and Andrew McCray
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 – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL 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

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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.
August 2, 2019	/s/ G. Janelle Frost
	G. Janelle Frost
	President, Chief Executive Officer and Director
	(Principal Executive Officer)
August 2, 2019	/s/ Neal A. Fuller
	Neal A. Fuller
	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

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EX-10.1

Exhibit 10.1

EXECUTIVE OFFICER EMPLOYMENT AGREEMENT

This Executive Officer Employment Agreement (this “Agreement”) is being entered into as of April 10, 2019 but effective as of May 20, 2019 (the “Effective Date”) by and between AMERISAFE, Inc., a Texas corporation with its principal place of business in DeRidder, Louisiana (the “Company”) and Andrew McCray,a competent individual of the lawful age of majority who will principally render his services in DeRidder, Louisiana (the “Employee”).

WITNESSETH:

WHEREAS, Employee desires to induce the Company to continue to employ him and Employee desires to continue to engage in an employment relationship with the Company and the Company desires to induce Employee to continue his employment with the Company and the Company desires to continue an employment relationship with Employee under the specific terms and conditions as set forth below;

NOW, THEREFORE, in exchange for good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged and in exchange for the mutual covenants and obligations contained in this Agreement, the Company and Employee hereby covenant and agree as follows:

1. Employment.  

(a) The Company hereby agrees to employ Employee, and Employee hereby accepts such employment with the Company, for the period set forth in Section 2 hereof, subject to the terms and conditions hereinafter set forth.

(b) Employee affirms and represents that he is under no obligation to any former employer or other person or entity which is in any way inconsistent with, or which imposes any restriction upon, Employee’s employment hereunder with the Company, the employment of Employee by the Company, or Employee’s undertakings under this Agreement.  

2. Term of Employment. Unless earlier terminated as provided in this Agreement, the term of Employee’s employment under this Agreement shall be for a period beginning ontheEffective Date and ending on May 20, 2020; provided, however, that this Agreement shall automatically renew for successive one year periods, unless either party shall notify the other in writing not less than thirty (30) days prior to the third anniversary date or any successive anniversary date that such party does not intent to renew this Agreement. Such period, plus any annual renewal periods, or, if Employee’s employment hereunder is earlier terminated as provided herein and including termination pursuant to Section 9, or such shorter period, is sometimes referred to herein as the “Employment Term”.

NAI-1500798701v1

3. Duties. Employee shall be employed by the Company as a senior executive officer of the Company and shall endeavor in good faith to competently perform such duties as inherent in Employee’s employment or any designated job position or as specified by the Company and shall also perform and discharge such other employment duties and responsibilities as the Board of Directors shall from time to time reasonably determine, not inconsistent with Employee’s position as a senior executive officer with the Company. Employee shall also comply with any By-Laws of the Company, as applicable. Employee shall perform Employee’s duties principally at the offices of the Company at 2301 Highway 190 West, DeRidder, Louisiana, with such travel to such other locations from time to time as the Board of Directors or the Chief Executive Officer of the Company may reasonably request. Except as may otherwise be approved in advance by the Board of Directors of the Company, and except during vacation periods and reasonable periods of absence due to sickness, injury or disability, Employee shall devote Employee’s full time throughout the Employment Term to the services required of Employee hereunder; provided that the foregoing shall not prohibit Employee from engaging in reasonable charitable, civic, and community activities. Employee shall render Employee’s business services exclusively to the Company and its subsidiaries and affiliate entities during the Employment Term and shall use her good faith efforts, judgment and energy to improve and advance the business and interests of the Company and its subsidiaries in a manner consistent with the duties of Employee’s position. Employee shall diligently, prudently, professionally, and responsibly perform her duties and shall discharge her employment utilizing her best faith efforts and prudent judgment with a high degree of proficiency and competency and for the exclusive interest of the Company.  

4. General Compliance, Code of Ethics and Conflicts of Interest.  

(a) Employee shall comply with all applicable laws and regulations (federal, state and local) and shall comply with all applicable directives, orders, and regulations of any governmental agency or regulatory body including federal, state, and local agencies and bodies. Employee shall also comply with all policies and procedures of the Company and directives of the Board of Directors. Employee understands, acknowledges and agrees that he holds a position of trust and that fiduciary duties and responsibilities may apply under applicable law and that these duties and responsibilities may be continuing in nature, even after separation from employment. Employee agrees to fully and faithfully perform and discharge all such duties, responsibilities, and obligations.  

(b) Employee has an obligation to act in an ethical manner in dealings with the Company, with co-employees, with customers and any third party. In this regard, Employee is required to be honest, forthright and to not take any action or make statements or engage in any conduct which is unethical, improper or which could create the appearance of impropriety. In addition, Employee shall not engage in any conduct, take any actions or make statements which negatively reflect upon Company or in any way harm or potentially cause harm to the Company’s image, reputation or good will.  

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(c) Employee must also ensure that he does not engage in any conflict of interest. In this regard, Employee shall not engage in any activity or conduct which is contrary to the exclusive interests of or in conflict with the exclusive interests of the Company. All business opportunities presented to Employee during the course and scope of his employment or while employed with the Company are to be used for the benefit of the Company only. Further, Employee shall not take any position contrary to the Company’s interests or inconsistent with Employee’s employment with the Company.  

5. EEO Compliance. Employee shall not engage in any conduct which constitutes or which may be considered an unlawful employment practice or which violates or could violate any employment practices, equal employment opportunity, discrimination, or retaliation laws or regulations (federal, state, or local). Employee acknowledges that the Company is an Equal Opportunity Employer and prohibits all forms of unlawful discrimination in the terms and condition of employment, it prohibits all forms of harassment, including sexual harassment, and it prohibits retaliation against any employee who engages in protected activity.

6. Salary and Bonus.  

(a) Salary. As compensation for the services to be performed by the Employee hereunder during the Employment Term, the Company shall pay the Employee a base salary at the annual rate of not less than Two Hundred Eighty-Five Thousand and No/100s Dollars ($285,000) (said amount, together with any increases thereto as may be determined from time to time by the Compensation Committee of the Board of Directors of the Company (the “Committee”) in its sole discretion, being hereinafter referred to as “Salary”). Any Salary payable hereunder shall be paid in regular intervals in accordance with the Company’s established and regular payroll practices from time to time in effect, but in no event less than monthly.  

(b) Bonus. Employee shall be eligible to receive bonus compensation from Company for each fiscal year (or portion thereof) occurring during the Employment Term in amounts, if any, as may be determined by the Committee  in its sole discretion, which may include performance-based criteria or annual incentive plans to be established from time to time by such Committee in its sole discretion, provided that any such Bonus so awarded shall be paid in the calendar year following the year in which the services for which such Bonus is awarded were performed.

(c) Long-Term Incentive Awards.  Employee will be eligible to receive long-term incentive awards for each fiscal year occurring during the Employment Term, in amounts and subject to the terms and conditions, which may include performance-based criteria, as determined by the Committee in its sole discretion.    

(d) Withholding and Taxes. The payment of any Salary, Bonus, long-term incentive awards and the payment of any separation pay pursuant to this Agreement, shall be subject to applicable withholding and payroll taxes, and such other deductions as may be required under the Company’s employee benefit plans.  

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7. Other Benefits.  

During the Employment Term, Employee shall:

(a) be eligible to participate in all employee fringe benefits and pension, retirement or profit sharing plans that may be provided by the Company for its other senior executive officers in accordance with the provision of any such plans, as the same may be in effect from time to time;  

(b) be eligible to participate in all medical and health plans or other employee welfare benefit plans that may be provided by the company for its other senior executive officers in accordance with the provisions of any such plans, as the same be in effect from time to time;  

(c) be entitled to at least 23 vacation/personal days in each calendar year; Employee shall also be entitled to all paid holidays given by the Company to its other senior executive officers;  

(d) be entitled to sick pay and disability benefits in accordance with any Company policy that may be applicable to other senior executive officers from time to time;  

(e) be entitled to a car allowance consistent with established Company practices as of the date hereof and which may be in effect from time to time;  

(f) be entitled to accrue earned and unused vacation time and carry such unused time forward from year to year during the Employment Term, provided the amount of accrued and unused time shall not exceed 200 hours at any time during the term hereof; and  

(g) be entitled to reimbursement for all reasonable and authorized out-of-pocket business expenses incurred by Employee in the performance of Employee’s duties hereunder in accordance with Company policies and practices that may be applicable to senior executive officers from time to time, provided that such business expenses shall be reimbursed, if at all, not later than the year following that in which such expenses are incurred, and that the amount of expenses eligible for reimbursement during one taxable year may not affect the amount of expenses eligible for reimbursement in another taxable year.  

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8. Confidential Information. Employee hereby covenants, agrees and acknowledges as follows:  

(a) Employee has and will have access to and will participate in the development of or be acquainted with confidential and proprietary information and trade secrets that directly or indirectly relate to the business, prospects, operations and other aspects of the Company and any other present or future subsidiaries and affiliates of the Company (collectively with the Company, the “Companies”), including but not limited to (1) customer lists; the identity, lists or descriptions of new or prospective customers; financial statements; cost reports or other financial information; contract proposals or bidding information, business plans; training and operations methods and manuals; personnel records; software programs; reports and correspondence; and management systems, policies or procedures, including related forms and manuals; (2) information pertaining to future developments such as future marketing or acquisition plans or ideas; and (3) all other tangible and intangible property, which are used in the business and operations of the Companies but not made public. The information and trade secrets relating to the business of the Companies described hereinabove in this paragraph 8(a) are hereinafter referred to collectively as the “Confidential Information”, provided that the term “Confidential Information” shall not include any information (x) that is or becomes publicly available (other than as a result of violation of this Agreement by the Employee), or (y) that Employee receives or received on a non-confidential basis from a source (other than the Companies or any of their representatives) that is not prohibited from disclosing such information by a legal, contractual or fiduciary obligation (provided, however that the Employee shall not be deemed to be in violation of this clause 8(a)(y) unless he has actual knowledge of any such obligation on the party of any such source). “Confidential Information” also includes, but is in no way limited to: financial information, budgets, general plans, business plans, data, trade secrets, computer software, technical information, research and development, product and service information, processes, insured lists, insured information, renewal and expiration dates, pricing and underwriting information, processes, procedures and standards, sales information, marketing information, bid information, job or project information, contracts, purchasing information, data processing, formulas, designs, drafts, drawings, systems, specifications, means, techniques, compilations, intellectual property, inventions, developments and improvements, operational methods, protocols, business strategies, market information, vendor or supplier information, personnel matters and records and matters that are sensitive, business, proprietary and confidential information. “Confidential Information” also includes, but is in no way limited to, any other proprietary, confidential or business information or documentation which is protected by or which is otherwise defined as trade secrets under any federal or state trade secret laws including, but in no way limited to, Louisiana’s Uniform Trade Secrets Act (La.R.S. 51:1431, et seq.) or other applicable law.  

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(b) Employee agrees that he will not use, disclose, communicate, disseminate or otherwise make known, directly or indirectly, any Confidential Information to any person or entity not employed by or directly affiliated with the Company. Additionally, Employee agrees that he will not use any Confidential Information for the benefit of herself or for the benefit of any other person or entity that is not employed by or affiliated with the Company or in any way that may be directly or indirectly competitive with or detrimental to the interests of the Company.  

(c) In the event that Employee receives an order or subpoena from a court of competent jurisdiction and venue or an order or subpoena from a governmental agency with jurisdiction and authority, Employee shall, within forty-eight (48) hours of receipt of such order or subpoena, immediately notify, by telephone communication and in writing, the Company’s Chief Executive Officer and Employee shall provide the Company’s Chief Executive Officer with a copy of any such order or subpoena and Employee shall notify Company’s Chief Executive Officer of whether or not he intends to comply with the order or subpoena and Employee shall cooperate with the Company in any action it takes in order to protect its rights or to contest or dispute the disclosure of Confidential Information pursuant to such order or subpoena.  

(d) Employee acknowledges and agrees that a remedy at law for any breach or threatened breach of the provisions of this Section 8 would be inadequate and, therefore, agrees that the Company shall be entitled to injunctive relief in addition to any other available rights and remedies in case of any such breach or threatened breach; provided, however, that nothing contained herein shall be construed as prohibiting the Company from pursuing any other rights and remedies available for any such breach or threatened breach.  

(e) Employee agrees that upon termination or separation of Employee’s employment with the Company for any reason, Employee shall immediately return to the Company all Confidential Information in Employee’s possession in whatever form maintained (including, without limitation, computer disks and other electronic and digital media).  

(f) The obligations of the Employee under this Section 8 shall, except as otherwise provided herein, survive the termination of the Employment Term or the termination or separation of Employee’s employment with the Company to the maximum period allowed by applicable law.  

(g) The obligations of the Employee under this Section 8 do not prevent you from providing information to government authorities regarding possible legal violations without prior notice to the Company, participate in investigations, testify in proceedings regarding the Company’s past or future conduct, engage in any future activities protected under the whistleblower statutes administered by any government agency (e.g., EEOC, NLRB, SEC, etc.) or to receive and fully retain a monetary award from a government administered whistleblower award program for providing information directly to a government agency.

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9. Termination.  

(a) Employee’s employment hereunder shall be terminated upon the occurrence of any of the following:  

(i) death of the Employee (Death);  

(ii) Employee’s inability to perform his duties or the essential functions of his job, with or without accommodation, on account of disability or incapacity for a period of one hundred eighty (180) or more days, whether or not consecutive, within any period of twelve (12) consecutive months (Disability);  

(iii) Company Termination for Cause (as defined herein);  

(iv) Company Termination Without Cause (as defined herein);  

(v) Employee Termination for Good Cause (as defined herein); or  

(vi) Employee Termination Without Good Cause (as defined herein).  

(b) As used in this Agreement, “Company Termination for Cause” shall mean a termination of Employee’s employment by action of the Board of Directors or the Chief Executive Officer (or their or his/her designee)  at any time, including during the Employment Term, based on any one or more of the following:  

(i) Employee’s conviction, guilty plea or plea of nolo contendere to any felony, or to any crime of moral turpitude;

(ii) the willful misconduct of Employee, or the willful or continued failure by Employee (except as a result of Disability or illness) to substantially perform his duties to the Company, in either case which has a material adverse effect on Company; or

(iii) the willful fraud or material dishonesty of Employee in connection with his performance of duties to the Company;  

provided, however, that no Company Termination for Cause shall be deemed to have occurred unless Employee is first given the opportunity to cure any acts or omissions giving rise to a Company Termination for Cause (other than those acts or omissions set forth in subsection 9(b)(i)) within 30 days of Employee’s receipt of notice of such acts or omissions.

(c) For purposes of this Agreement, “Company Termination Without Cause” shall mean a termination of Employee’s employment by the Company or the Company’s nonrenewal of this Agreement for any reason or on any grounds other than a “Company Termination for Cause.”  

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(d) For purposes of this Agreement, “Employee Termination Without Good Cause” shall mean a termination or resignation of employment by Employee or Employee’s nonrenewal of this Agreement for any reason or for any grounds other than an “Employee Termination for Good Cause.”  

(e) For purposes of this Agreement, “Employee Termination for Good Cause” shall mean Employee’s termination of or resignation from Employment or Employee’s nonrenewal of this Agreement for any one or more of the following reasons:  

(i) a material diminution in Employee’s authority, duties or responsibilities;  

(ii) a material reduction in Employee’s Salary;

(iii) a material reduction in the Employee’s ability to earn an annual Bonus that results in a material reduction in the total annual compensation Employee may earn;

(iv) a termination of Employee’s participation in employee benefits provided or existing as of the Effective Date unless such termination of employee benefits is applicable to all senior executive officers of the Company or unless termination is required or directed under the terms and conditions of any applicable benefit plans, summary plan descriptions, insurance policies or applicable law;

(v) the relocation of Employee’s principal place of employment to a location more than 35 miles from Employee’s principal place of business; or

(vi) a material breach by the Company of this Agreement or any other agreement governing Employee’s employment by the Company;  

provided, however, that Employee may not terminate or separate employment for purposes of Employee Termination for Good Cause unless (i) within 60 days after the date on which Employee obtains actual knowledge of the condition or event giving rise to Employee Termination for Good Cause, Employee gives notice to the Company that Employee does not wish to remain in the employ of the Company as a result of such condition or event, (ii) the Company does not cure such condition or event within 30 days after receiving the notice described in the preceding clause (i), and (iii) Employee terminates employment within 180 days after the date on which Employee obtains actual knowledge of the existence of such condition or event.  Any failure by Employee to terminate employment within such 180 day period after the initial existence of any condition or event giving rise to Employee Termination for Good Cause shall constitute a waiver by Employee of the Employee’s right to claim an Employee Termination for Good Cause as a result of such condition or event.

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(f) In the event that Employee’s employment is terminated at any time by a Company Termination Without Cause or an Employee Termination for Good Cause, for a twelvemonth period following the effective date of such termination, the Company shall pay monthly (as severance, termination pay, separation pay, contract payout, compensation, or liquidated damages) (i) the monthly Salary that would have otherwise been payable to the Employee during such period, and (ii) an amount equal to one-twelfth of the average of the three Bonuses (other than any Bonuses granted to Employee under any plan or program that provides incentive compensation based on a performance period of more than one year, including any Long-Term Incentive Award granted under the AMERISAFE, Inc. 2012 Equity and Incentive Compensation Plan or any successor plan) most recently awarded under 6(b) and under predecessor agreements (or, if less than three, the average of all Bonuses awarded under 6(b) and under predecessor agreements). Each such monthly payment shall be treated as a separate payment for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and will be paid during such period in accordance with the Company’s then existing payroll practices, methods, or pay periods. In addition, in the event that Employee’s employment is terminated at any time by a Company Termination Without Cause or an Employee Termination for Good Cause, the Company will pay or reimburse Employee for a twelve month period following such termination the actual cost of COBRA continuing health coverage premiums, to the extent COBRA is applicable and Employee elects COBRA continuing health coverage. In this regard, if Employee is eligible for COBRA continuing health benefits and if Employee timely elects COBRA continuing health care coverage, the Company will pay and/or reimburse up to a maximum of twelvemonths of COBRA continuing health care coverage premiums provided that such COBRA premiums shall be reimbursed, if at all, not later than the year following that in which such premiums are incurred, and that the amount of premiums eligible for reimbursement during one taxable year may not affect the amount of premiums eligible for reimbursement in another taxable year. It shall be at Company’s option and discretion to either pay the COBRA premiums directly or to reimburse Employee for premiums that Employee pays for COBRA continuing health coverage. Any premiums or amounts due for COBRA continuing health coverage beyond the twelve month period referenced above shall be at the sole cost and expense of Employee and will not be paid or reimbursed by the Company. The above described obligations of the Company (continuation of Salary and Bonus for a twelve month period following and payment of COBRA premiums for a twelve month period following Company Termination Without Cause or Employee Termination for Good Cause) shall be the exclusive remedies and payment obligations and no other amounts or obligations will be due and owing by the Company to Employee. In this regard, Company Termination Without Cause and Employee Termination for Good Cause may be effectuated at any time during the Employment Term or renewal and the only amounts that Company will be obligated or required to pay are the amounts calculated according to the formulas set forth above.

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(g) Notwithstanding anything to the contrary expressed or implied herein, except as required by applicable law and except as set forth in Section 9(f) above, the Company shall not be obligated to make any payments to the Employee or on her behalf of whatever kind or nature by reason of the Employee’s cessation of employment (including, without limitation, by reason of a Company Termination for Cause, Employee Termination Without Good Cause, Death or Disability), other than (i) such amounts, if any, of Employee’s Salary and Bonus as shall be accrued, earned and remained unpaid as of the effective date of employment separation and (ii) such other amounts, if any, which may be then otherwise payable to the Employee pursuant to the terms of the Company’s benefits plans or pursuant to Section 7 above. Any Bonus amounts due the Employee following a cessation of employment shall be paid following the end of the fiscal year at the same time Bonus payments are made to other employees.

(h) To the extent that a payment becomes due to Employee under this Agreement by reason of Employee’s termination of employment, the term “termination of employment” will have the same meaning as “separation from service” under Section 409A of the Code. Notwithstanding anything to the contrary expressed or implied herein, if the Company makes a good faith determination that a payment under the Agreement (i) constitutes a deferral of compensation for purposes of Section 409A of the Code, (ii) is made to Employee by reason of his separation from service and (iii) at the time such payment would otherwise be made Employee is a “specified employee” within the meaning of Section 409A of the Code, the payment will be delayed until the first day of the seventh month following the date of such termination of employment to the extent required by Section 409A of the Code.  

10. Restrictive Covenants: Non-Competition and Non-Solicitation.  

(a) Introduction. The restrictive covenants set forth in this Agreement prohibiting competition and solicitation shall apply during the “Restricted Period,” as defined herein, in the “Restricted Area,” as defined herein. Employee acknowledges and understands that one of the principal causes and considerations of the Company employing or continuing to employ Employee in a senior executive officer position is the restrictive covenants to which Employee is obligated under this Agreement. Employee further acknowledges and agrees that he will be granted access to and will be provided confidential, business and proprietary information and trade secrets of the Company and that he will have access to and will be provided confidential information and data to which only senior executive officers have access and that the provision and access of such information constitutes additional consideration in exchange for the restrictive covenants contained herein. Additionally, the Company will continue to be providing to Employee special and unique training opportunities and experience and he will be obtaining knowledge, experience and skills through employment with the Company that may not otherwise be obtained or acquired by Employee.

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(b) Restricted Period. For purposes of this Agreement, the “Restricted Period” shall mean the Employment Term plus:  

(i) in the event that the employment of the Employee is terminated by a Company Termination Without Cause or Employee Termination For Good Cause, a period of twelve months. As such, the Restricted Period would be the Employment Term and duration of employment and would extend beyond termination or separation for twelve months; or  

(ii) in the event that the employment of the Employee is terminated by the Company by a Company Termination For Cause, or by Employee’s Termination Without Good Cause, the Restricted Period shall expire upon the effective date of Employee’s separation of employment; provided, however, in such event, the Company shall have the exclusive option and absolute right of extending the Restrictive Period for a period of twelve months following the effective date of the termination or separation of employment if Company: (1) delivers written notice to the Employee irrevocably exercising such option before employment termination or separation or within 180 days after employment separation or termination and (2) agrees to pay and does pay the Employee the payments provided for under Section 9(f) of this Agreement for such twelve month period. If Company exercises this option and right and complies with the requirements for same, the Restrictive Period shall be extended beyond the employment separation effective date for the twelve month period designed and Employee agrees and acknowledges that Employee is bound by such restrictive covenants for the Restrictive Period.  

(c) Definition of Restricted Area. The term “Restricted Area” shall mean the states, parishes, counties and municipalities designated in Attachment “A” which is incorporated herein by reference as if copied in extension.  

(d) Business of the Company. Employee acknowledges and understands that the “business” of the Company involves and relates to the underwriting of risks for, the sale of and the servicing of workers’ compensation insurance, general liability insurance and commercial and business insurance product lines and related services. Employee further acknowledges, agrees and represents that he understands and knows the business in which the Company is engaged and the scope, activities and business pursuits involved in the business of the Company. Employee further acknowledges and understands that the noncompetition and nonsolicitation of customer restrictions in this Agreement prohibit the Employee from engaging, in any capacity or any position, and from conducting any activities or business similar to that of the Company or that is competitive with the Company and as provided under the specific terms and conditions of this Agreement.  

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(e) Customers of the Company. For purposes of this Agreement, “customers” shall include, but are not limited to, insured businesses, persons and entities who have or have had insurance coverage with the Company and insurance agents with whom Company has contracts, agreements, arrangements or any type of business, insurance placement or working relationship. Employee acknowledges and represents that Employee understands the nature of the Company’s customer relationships and who and what comprises its customers.  

(f) Non-Competition. During the Restricted Period, Employee shall not engage in any of the following activities in the Restricted Area:  

(i) Carry on or engage in her own business (as a sole proprietor, corporation, partnership, limited liability company, limited partnership or any other business entity or business association) in competition with or similar to the business of the Company.  

(ii) Carry on or engage in a competing business or work similar to or in competition with the business of the Company as an employee, consultant, board member, officer, manager, representative, contractor, consultant, subcontractor, independent contractor or agent of any other person or entity or in any capacity with or for any other person or entity.  

(iii) Acquire or have an interest in or an option or other right to acquire an interest in any entity or business which is carrying on or engaging in a competing business with the Company or in a business similar to that of the Company. The term “an interest” shall include, without limitation, an interest or right as a partner, shareholder, officer, director, member, general manager, principal, limited partner, owner, trustee, financier, guarantor, surety, mortgagee and lender.  

(iv) Accept or conduct any business or any transactions with any customer or former customer of the Company or receive any compensation, remuneration or consideration arising out of, related to or in any associated with any business arrangement or relationship with any customer or former customer of the Company.  

(g) Non-Solicitation. During the Restricted Period, Employee shall not engage in the following activities in the Restricted Area:  

(i) Solicit the customers of the Company.  

(ii) Solicit the customers or former customers of Employee.  

(iii) Accept business from any customer of the Company.  

(iv) Accept business from any customer or former customer of Employee.  

(v) Service accounts or business of any customers of the Company.  

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(vi) Service accounts or business of any customers or former customers of Employee.  

(vii) Solicit, induce or attempt to induce any employee of the Company to leave the employ of the Company.  

(h) Application. Company and Employee agree that (i) each of the actions described in this Agreement constitute “carrying on and engaging in a business similar to that of” Company and the “soliciting customers of” Company, as those terms are used in La.R.S. 23:921, and (ii) this Agreement shall have the broadest possible meaning and application as allowed under applicable law. Additionally, any future amendment to La.R.S. 23:921 or decisions or rulings of any court of competent jurisdiction which would expand the Company’s rights or impose greater restrictions on Employee shall apply and shall be enforceable herein. For purposes of this Agreement, the term “solicit” includes, but is in no way limited to, any and all direct and indirect solicitation of business (by Employee or through others) and the engagement in communications (through any format or medium) for the purpose of or which would in any way facilitate or attempt to generate business, services, work or other business activities with the customer and this shall apply regardless of whether the customer initiates the contact with Employee or Employee (or another person or entity) initiates the contact with the customer.  

(i) Remedies. In the event of breach or threatened or attempted breach of any provision of this Agreement by Employee, the parties recognize and acknowledge that such a breach would cause irreparable harm to the Company or that the Company may not have an adequate remedy at law and that the restrictive covenants contained in this Agreement are “obligations not to do” and that the Company shall not be required to prove irreparable injury in order to obtain injunctive relief in the event of any breach or threatened breach of this Agreement. Employee further agree and acknowledge that if there is any breach or threatened breach of any one or more of the provisions of this Agreement, the Company may, in addition to any other legal or equitable remedies which may be available to it, (i) obtain a temporary restraining order, preliminary injunction and permanent injunction to enjoin or restrain Employee from the breach or threatened breach of any such provision or provisions without the necessity of posting a bond and (ii) require Employee to account for and pay over to the Company all compensation, profits, moneys, accruals, increments, remuneration or any other benefits derived or received by Employee as a result of any transactions or actions constituting a breach of any provision of this Agreement. Company shall also be entitled to recover any damages, attorney’s fees and costs incurred by it in any legal action or to obtain specific performance of or to enforce this Agreement or to remedy any breach of this Agreement. All such remedies in favor of the Company shall be cumulative and shall not be exclusive. In the event that the Company takes any legal action to enforce this Agreement or to remedy any breach of this Agreement, the Company shall be entitled to recover and the Employee shall be liable for all attorney’s fees, court costs and expenses incurred by the Company in any such action.

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(j) Company Designation. As used in this Section 10, “Company” includes Amerisafe, Inc., American Interstate Insurance Company, Silver Oak Casualty, Inc., American Interstate Insurance Company of Texas, Amerisafe General Agency, Inc. and any and all predecessor entities, successor entities, affiliate entities, parent companies, assigns and subsidiaries. The parties acknowledge and agree that the restrictive covenants in this Section 10 enure to the benefit of and operate for the interest of all of the above-mentioned companies and affiliates and said entities are expressly designated as third party beneficiaries of this Section 10 and the restrictive covenants and obligations imposed on Employee.  

(k) Construction Reformation and Severability. It is understood and agreed that, should any portion of any clause or paragraph of this Section 10 be deemed too broad to permit enforcement to its full extent, or should any portion of any clause or paragraph of this Section 10 be deemed unreasonable, invalid or unenforceable, then said clause or paragraph shall be reformed and enforced to the maximum extent permitted by law. Additionally, if any of the provisions of this Section 10 are ever found by a court of competent jurisdiction to exceed the maximum enforceable (i) periods of time, (ii) geographic areas of restriction, (iii) scope of noncompetition or nonsolicitation or (iv) description of the Company’s business or customers, or for any other reason, then such unenforceable element(s) of this Section 10 shall be reformed and reduced to the maximum periods of time, geographic areas of restriction, scope of noncompetition or nonsolicitation or description of the Company’s business that is permitted by law. In this regard, any unenforceable, unreasonable or overly broad provision shall be reformed or severed so as to permit enforcement to the fullest extent permitted by law and reformation and severability shall apply.  

(l) Reasonableness. Employee acknowledges, represents and agrees that the restrictive covenants in this Section 10 are reasonable in nature, scope, time and territory and in the terms and conditions set forth herein. Employee acknowledges, represents and agrees that the Company has expended substantial cost in training Employee and that the Company has provided him with access to valuable information and has provided him with valuable experience. In addition, Employee acknowledges, represents and agrees that the Company has placed Employee in contact with its customers, and has made Employee part of its business plans. Employee further acknowledges, represents and agrees that Employee would not have obtained such training, experience, contacts and information from other sources without the employment relationship with the Company. Employee further acknowledges, represents and agrees that the foregoing have occurred or resulted based on the Company’s reliance on these restrictive covenants and Employee’s representations and obligations made herein. Employee further acknowledges, represents and agrees that this Section 10 and the obligations of Employee under these restrictive covenants are reasonable in order to protect the legitimate interests of the Company. Employee further acknowledges, represents and agrees that by virtue of his job position, he has become an integral and influential component of the Company’s current and future business plans. It is the Employee’s desire and intent that this Agreement be given full force and effect. Employee further acknowledges and agrees that enforcement of these restrictive covenants will not create an undue burden or hardship on him and will not impair or prevent him from earning a livelihood based on her own education, training, experience, qualifications, and skills.

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11. Assignment.  

(a) Neither this Agreement nor any right or interest hereunder shall be assignable by the Employee or her beneficiaries or legal representatives without the Company’s prior written consent; provided, however, that nothing in this Section 11(a) shall preclude the Employee from designating a beneficiary to receive any benefit payable hereunder upon her death or incapacity.  

(b) Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion, attachment, levy or similar process or to assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.  

(c) Company shall have the right, without Employee’s consent, to assign this Agreement and to assign any rights and obligations under this Agreement to any person or entity including, but in no way limited to, any parent companies, subsidiaries, affiliate entities, predecessors, and successors.  

12. Binding Effect. Without limiting or diminishing the effect of Section 11 hereof, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and assigns.  

13. Notices. All notices which are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be sufficient in all respects if given in writing and (i) delivered personally, (ii) five business days after being mailed by certified or registered mail, return receipt requested and postage prepaid, (iii) sent via a nationally recognized overnight courier, or (iv) sent via facsimile confirmed by certified or registered mail, return receipt requested and postage prepaid, if to the Company at the Company’s principal place of business, and if to the Employee, at her home address most recently filed with the Company, or to such other address or addresses as either party shall have designated in writing to the other party hereto.

14. Law Governing. This Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana, without regard to the application of conflicts of laws principles. Employee consents to the jurisdiction and venue of the 36th Judicial District Court, Beauregard Parish, State of Louisiana and, alternatively, the U.S. District Court for the Western District of Louisiana, Lake Charles Division.

15. Execution and Performance. Employee agrees and understands that this Agreement is being executed, in whole or in part, in Beauregard Parish, Louisiana. Additionally, performance of this Agreement is to be rendered, in whole or in part, in Beauregard Parish, Louisiana. Employee further understands and acknowledges that the employment relationship between Employee and the Company is principally centered and based in Beauregard Parish, Louisiana.  

{N2956879.2} NAI-1500798701v1 - 15

16. Severability. The Employee agrees that in the event that any court of competent jurisdiction shall finally hold that any provision of this Agreement is void or constitutes an unreasonable restriction against the Employee, this Agreement shall not be rendered void but shall apply with respect to such extent as such court may judicially determine constitutes a reasonable restriction under the circumstances. If any part of this Agreement is held by a court of competent jurisdiction to be invalid, illegible or incapable of being enforced in whole or in part by reason of any rule of law or public policy, such part shall be deemed to be severed from the remainder of this Agreement for the purpose only of the particular legal proceedings in question and all other covenants and provisions of this Agreement shall in every other respect continue in full force and effect and no covenant or provision shall be deemed dependent upon any other covenant or provision. Severability and reformation shall apply.  

It is understood and agreed that should any portion of any clause or paragraph of this Agreement be deemed too broad to permit enforcement to its full extent or should any portion of any clause or paragraph of this Agreement be deemed unreasonable, then said clause or paragraph shall be reformed and enforced to the maximum extent permitted by law.

17. Waiver. Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times.  

18. Entire Agreement; Modifications. This Agreement, with referenced Attachment “A”, constitutes the entire and final expression of the agreement of the parties with respect to the subject matter hereof and supersedes the Prior Agreement and other prior and contemporaneous agreements, oral and written, between the parties hereto with respect to the subject matter hereof. This Agreement may be modified or amended only by an instrument in writing signed by both Employee and the Chairman of the Committee, provided, however, that in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to the Agreement as the Company deems necessary or desirable solely to avoid the imposition of taxes or penalties under Section 409A.

19. Counterparts and Multiple Originals. This Agreement may be executed in two or more counterparts and in multiple originals, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  

20. Interpretation. The Company and Employee have jointly participated in the negotiations and drafting of this Agreement. In the event any question of intent or interpretation arises, this Agreement shall be construed and interpreted as if drafted by both parties.  

21. References to Attachments. All attachments and other documents which are referred to herein are hereby incorporated by reference as if copied at length herein.  

{N2956879.2} NAI-1500798701v1 - 16

22. Consultation and Acknowledgment. Employee acknowledges and agrees that Employee has read and understands this Agreement and its effect, and that Employee has had the opportunity to consult fully and freely with an attorney or other advisor of his choice regarding this Agreement and to have an attorney or advisor review and advise Employee with respect to this Agreement prior to his entering into this Agreement. Employee further acknowledges that he has carefully read this entire Agreement and understands the nature and extent of the rights and obligations created by this Agreement and that he is entering into this Agreement voluntarily and without coercion. Employee further acknowledges that this Agreement is being entered into after due thought and consideration and after a mutual and meaningful negotiation between the parties.

[signature page follows]

{N2956879.2} NAI-1500798701v1 - 17

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above.

AMERISAFE, INC.
By:	/s/ G. Janelle Frost
	G. Janelle Frost,
	Chief Executive Officer
EMPLOYEE:
/s/ Andrew B. McCray
Andrew B. McCray

{N2956879.2} NAI-1500798701v1 - 18

ATTACHMENT “A”

Employment Agreement

“Restricted Area”

The following states constitute the “Restricted Area” for purposes of the Employment Agreement, including Section 10, entitled “Restrictive Covenants”, entered into between the Company and the Employee:

States of Alabama, Alaska, Arkansas, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming.

{N2956879.2} NAI-1500798701v1 - 19

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: August 2, 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: August 2, 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 June 30, 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: August 2, 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	6 Months Ended
	Jun. 30, 2019	Jul. 30, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Trading Symbol	AMSF
Entity Registrant Name	AMERISAFE INC
Entity Central Index Key	0001018979
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity File Number	001-12251
Entity Tax Identification Number	752069407
Entity Address, Address Line One	2301 Highway 190 West
Entity Address, City or Town	DeRidder
Entity Address, State or Province	Louisiana
Entity Address, Postal Zip Code	70634
City Area Code	337
Local Phone Number	463-9052
Entity Common Stock, Shares Outstanding		19,298,261

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Investments:
Fixed maturity securities—held-to-maturity, at amortized cost (fair value $629,207 and $616,772 in 2019 and 2018, respectively)	$ 610,950	$ 613,878
Fixed maturity securities—available-for-sale, at fair value (cost $445,117 and $479,772 in 2019 and 2018, respectively)	457,893	478,730
Equity securities, at fair value (cost $22,582 and $19,962 in 2019 and 2018, respectively)	24,070	18,651
Short-term investments	70,146	14,231
Total investments	1,163,059	1,125,490
Cash and cash equivalents	51,246	40,344
Amounts recoverable from reinsurers	103,695	112,006
Premiums receivable, net of allowance	175,020	162,478
Deferred income taxes	19,461	21,852
Accrued interest receivable	10,086	10,197
Property and equipment, net	5,957	6,258
Deferred policy acquisition costs	20,550	19,734
Other assets	22,019	17,572
Total assets	1,571,093	1,515,931
Liabilities:
Reserves for loss and loss adjustment expenses	795,046	798,409
Unearned premiums	156,889	149,296
Amounts held for others	44,064	41,388
Policyholder deposits	46,095	46,795
Insurance-related assessments	30,253	28,258
Federal income tax payable	1,325	3,412
Accounts payable and other liabilities	38,325	38,611
Payable for investments purchased	9,653
Total liabilities	1,121,650	1,106,169
Shareholders’ equity:
Common stock: voting—$0.01 par value authorized shares—50,000,000 in 2019 and 2018; 20,556,511 and 20,528,230 shares issued and 19,298,261 and 19,269,980 shares outstanding in 2019 and 2018, respectively	205	205
Additional paid-in capital	212,493	211,431
Treasury stock, at cost (1,258,250 shares in 2019 and 2018)	(22,370)	(22,370)
Accumulated earnings	248,975	221,328
Accumulated other comprehensive income (loss), net	10,140	(832)
Total shareholders’ equity	449,443	409,762
Total liabilities and shareholders’ equity	$ 1,571,093	$ 1,515,931

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Fixed maturity securities, fair value	$ 629,207	$ 616,772
Fixed maturity securities, cost	445,117	479,772
Equity securities, cost	$ 22,582	$ 19,962
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	20,556,511	20,528,230
Common stock, shares outstanding	19,298,261	19,269,980
Treasury stock, shares	1,258,250	1,258,250

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues
Gross premiums written	$ 87,018	$ 93,702	$ 180,125	$ 191,044
Ceded premiums written	(2,204)	(2,369)	(4,634)	(4,699)
Net premiums written	84,814	91,333	175,491	186,345
Net premiums earned	82,951	88,995	167,899	176,305
Net investment income	8,169	7,303	16,184	14,512
Net realized losses on investments	(82)	(1,111)	(23)	(1,142)
Net unrealized gains (losses) on equity securities	642	76	2,800	(314)
Fee and other income	73	117	83	194
Total revenues	91,753	95,380	186,943	189,555
Expenses
Loss and loss adjustment expenses incurred	48,868	52,076	98,482	105,238
Underwriting and certain other operating costs	7,416	7,985	14,968	15,831
Commissions	6,243	6,616	12,611	13,110
Salaries and benefits	6,059	6,681	12,806	12,607
Policyholder dividends	998	1,092	2,098	2,425
Total expenses	69,584	74,450	140,965	149,211
Income before income taxes	22,169	20,930	45,978	40,344
Income tax expense	4,279	3,974	8,688	7,219
Net income	$ 17,890	$ 16,956	$ 37,290	$ 33,125
Earnings per share
Basic	$ 0.93	$ 0.88	$ 1.94	$ 1.73
Diluted	$ 0.93	$ 0.88	$ 1.93	$ 1.72
Shares used in computing earnings per share
Basic	19,245,592	19,208,601	19,237,401	19,197,925
Diluted	19,306,953	19,266,735	19,316,276	19,275,883
Cash dividends declared per common share	$ 0.25	$ 0.22	$ 0.50	$ 0.44

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 17,890	$ 16,956	$ 37,290	$ 33,125
Other comprehensive income:
Unrealized gain (loss) on debt securities, net of tax	4,980	153	10,972	(5,695)
Change in deferred tax valuation allowance	198
Comprehensive income	$ 23,068	$ 17,109	$ 48,262	$ 27,430

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	$ 425,423	$ 204	$ 210,081	$ (22,370)	$ 233,896	$ 3,612
Beginning Balance, Shares at Dec. 31, 2017		20,504,165
Treasury Stock Beginning Balance, Shares at Dec. 31, 2017				(1,258,250)
Comprehensive income:
Impact of adoption of ASU | ASU 2016-01 [Member]	614				614
Impact of adoption of ASU | ASU 2018-02 [Member]	(414)				(414)
Net income	33,125				33,125
Other comprehensive income:
Change in unrealized gains (losses), net of tax	(5,695)					(5,695)
Comprehensive income	27,430
Common stock issued upon exercise of options	$ 67		67
Common stock issued upon exercise of options, Shares	15,000	15,000
Common stock issued	$ 196	$ 1	195
Common stock issued, Shares		9,065
Share-based compensation	552		552
Dividends to shareholders	(8,477)				(8,477)
Ending Balance at Jun. 30, 2018	445,391	$ 205	210,895	$ (22,370)	258,744	(2,083)
Ending Balance, Shares at Jun. 30, 2018		20,528,230
Treasury Stock Ending Balance, Shares at Jun. 30, 2018				(1,258,250)
Beginning Balance at Mar. 31, 2018	432,068	$ 205	210,441	$ (22,370)	246,028	(2,236)
Beginning Balance, Shares at Mar. 31, 2018		20,519,165
Treasury Stock Beginning Balance, Shares at Mar. 31, 2018				(1,258,250)
Comprehensive income:
Impact of adoption of ASU | ASU 2016-01 [Member]	(1)				(1)
Net income	16,956				16,956
Other comprehensive income:
Change in unrealized gains (losses), net of tax	153					153
Comprehensive income	17,109
Common stock issued upon exercise of options	(1)	$ (1)
Common stock issued	196	$ 1	195
Common stock issued, Shares		9,065
Share-based compensation	259		259
Dividends to shareholders	(4,239)				(4,239)
Ending Balance at Jun. 30, 2018	445,391	$ 205	210,895	$ (22,370)	258,744	(2,083)
Ending Balance, Shares at Jun. 30, 2018		20,528,230
Treasury Stock Ending Balance, Shares at Jun. 30, 2018				(1,258,250)
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 | ASU 2016-02 [Member]	$ (1)				(1)
Net income	37,290				37,290
Other comprehensive income:
Change in unrealized gains (losses), net of tax	10,972					10,972
Comprehensive income	48,262
Common stock issued upon exercise of options	$ 20		20
Common stock issued upon exercise of options, Shares	5,000	5,000
Common stock issued	$ 560		560
Common stock issued, Shares		23,281
Share-based compensation	482		482
Dividends to shareholders	(9,642)				(9,642)
Ending Balance at Jun. 30, 2019	$ 449,443	$ 205	212,493	$ (22,370)	248,975	10,140
Ending Balance, Shares at Jun. 30, 2019	20,556,511	20,556,511
Treasury Stock Ending Balance, Shares at Jun. 30, 2019	(1,258,250)			(1,258,250)
Beginning Balance at Mar. 31, 2019	$ 430,405	$ 205	211,700	$ (22,370)	235,908	4,962
Beginning Balance, Shares at Mar. 31, 2019		20,533,230
Treasury Stock Beginning Balance, Shares at Mar. 31, 2019				(1,258,250)
Comprehensive income:
Net income	17,890				17,890
Other comprehensive income:
Change in unrealized gains (losses), net of tax	4,980					4,980
Change in deferred tax valuation allowance	198					198
Comprehensive income	23,068
Common stock issued	560		560
Common stock issued, Shares		23,281
Share-based compensation	233		233
Dividends to shareholders	(4,823)				(4,823)
Ending Balance at Jun. 30, 2019	$ 449,443	$ 205	$ 212,493	$ (22,370)	$ 248,975	$ 10,140
Ending Balance, Shares at Jun. 30, 2019	20,556,511	20,556,511
Treasury Stock Ending Balance, Shares at Jun. 30, 2019	(1,258,250)			(1,258,250)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Operating activities
Net income	$ 37,290	$ 33,125
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	449	488
Net amortization of investments	4,483	5,979
Deferred income taxes	(526)	831
Net realized losses on investments	23	1,142
Net unrealized (gains) losses on equity securities	(2,800)	314
Share-based compensation	509	782
Changes in operating assets and liabilities:
Premiums receivable, net	(12,542)	(15,658)
Accrued interest receivable	111	177
Deferred policy acquisition costs	(816)	(1,350)
Amounts held by others	1	(7,855)
Other assets	(947)	942
Reserves for loss and loss adjustment expenses	(3,363)	11,756
Unearned premiums	7,593	10,040
Reinsurance balances	8,317	(8,828)
Amounts held for others and policyholder deposits	1,976	1,787
Accounts payable and other liabilities	(189)	3,312
Net cash provided by operating activities	39,569	36,984
Investing activities
Purchases of investments held-to-maturity	(67,571)	(38,129)
Purchases of investments available-for-sale	(27,356)	(52,211)
Purchases of equity securities	(2,620)	(4,339)
Purchases of short-term investments	(79,224)	(100,059)
Proceeds from maturities of investments held-to-maturity	73,865	52,584
Proceeds from sales and maturities of investments available-for-sale	60,494	66,480
Proceeds from sales of equity securities		282
Proceeds from sales and maturities of short-term investments	23,679	13,465
Proceeds from redemptions of other investments		130
Purchases of property and equipment	(148)	(1,004)
Net cash used in investing activities	(18,881)	(62,801)
Financing activities
Proceeds from stock option exercises	20	67
Finance lease purchases	(23)
Dividends to shareholders	(9,783)	(8,633)
Net cash used in financing activities	(9,786)	(8,566)
Change in cash and cash equivalents	10,902	(34,383)
Cash and cash equivalents at beginning of period	40,344	55,559
Cash and cash equivalents at end of period	$ 51,246	$ 21,176

XML

Basis of Presentation

6 Months Ended

Jun. 30, 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, and agriculture. Assets and revenues of AIIC and its subsidiaries represent at least 95% of comparable consolidated amounts of the Company for each of the six months ended June 30, 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 current guidance delays the recognition of credit losses until a probable loss has occurred.  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 June 30, 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

6 Months Ended

Jun. 30, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Options and Restricted Stock

Note 2. Stock Options and Restricted Stock

As of June 30, 2019, the Company has two equity incentive plans: 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 were made under the AMERISAFE 2005 Incentive Plan.  There are no outstanding options or restricted stock awards under 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 six months ended June 30, 2019, the Company issued 9,391 shares of common stock pursuant to vested performance awards and 9,000 shares of restricted common stock to executive officers.  During the six months ended June 30, 2019, the Company issued 4,890 shares of restricted common stock to non-employee directors.  The market value of the shares issued totaled $1.4 million.  During the six months ended June 30, 2018, the Company issued 3,304 shares of common stock pursuant to vested performance awards to executive officers and 5,761 shares of restricted common stock to non-employee directors. The market value of the shares issued totaled $0.5 million.

During the six months ended June 30, 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 $20 thousand of stock option proceeds in the current year and $67 thousand of stock option proceeds in the same period of 2018.  

The Company recognized a negative share-based compensation expense of $0.1 million in the quarter ended June 30, 2019 due to lower estimates of variable share price based incentive compensation costs.  The Company recognized an expense of $0.8 million for the same period in 2018.  The Company recognized share-based compensation expense of $0.5 million in the six months ended June 30, 2019 and $0.8 million for the same period in 2018.  

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Earnings Per Share

6 Months Ended

Jun. 30, 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				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
	(in thousands, except share and per share amounts)
Basic EPS:
Net income	$	17,890	$	16,956	$	37,290	$	33,125
Basic weighted average common shares		19,245,592		19,208,601		19,237,401		19,197,925
Basic earnings per common share	$	0.93	$	0.88	$	1.94	$	1.73
Diluted EPS:
Net income	$	17,890	$	16,956	$	37,290	$	33,125
Diluted weighted average common shares:
Weighted average common shares		19,245,592		19,208,601		19,237,401		19,197,925
Stock options and restricted stock		61,361		58,134		78,875		77,958
Diluted weighted average common shares		19,306,953		19,266,735		19,316,276		19,275,883
Diluted earnings per common share	$	0.93	$	0.88	$	1.93	$	1.72

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Investments

6 Months Ended

Jun. 30, 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 June 30, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	439,103	$	15,966	$	(36	)	$	455,033
Corporate bonds		108,756		1,425		(17	)		110,164
U.S. agency-based mortgage-backed securities		12,465		523		(12	)		12,976
U.S. Treasury securities and obligations of U.S.    government agencies		49,677		430		(29	)		50,078
Asset-backed securities		949		10		(3	)		956
Totals	$	610,950	$	18,354	$	(97	)	$	629,207

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at June 30, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	220,385	$	9,852	$	(15	)	$	230,222
Corporate bonds		151,705		2,953		(39	)		154,619
U.S. agency-based mortgage-backed securities		11,904		6		(58	)		11,852
U.S. Treasury securities and obligations    of U.S. government agencies		61,123		301		(224	)		61,200
Totals	$	445,117	$	13,112	$	(336	)	$	457,893

The gross unrealized gains and losses on, and the cost of equity securities at June 30, 2019 are summarized as follows:

	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	22,582	$	1,488	$	—	$	24,070
Total equity securities	$	22,582	$	1,488	$	—	$	24,070

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 June 30, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	79,934	$	80,374
After one year through five years		216,626		220,476
After five years through ten years		84,179		87,047
After ten years		216,797		227,378
U.S. agency-based mortgage-backed securities		12,465		12,976
Asset-backed securities		949		956
Totals	$	610,950	$	629,207

A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as available-for-sale at June 30, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	49,966	$	50,018
After one year through five years		158,125		159,944
After five years through ten years		46,069		47,983
After ten years		179,053		188,096
U.S. agency-based mortgage-backed securities		11,904		11,852
Totals	$	445,117	$	457,893

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)
June 30, 2019
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	6,038	$	19	$	11,835	$	17	$	17,873	$	36
Corporate bonds		—		—		15,306		17		15,306		17
U.S. agency-based mortgage-backed securities		—		—		2,201		12		2,201		12
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		8,362		29		8,362		29
Asset-backed securities		—		—		177		3		177		3
Total held-to-maturity securities		6,038		19		37,881		78		43,919		97
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	—	$	—	$	7,008	$	15	$	7,008	$	15
Corporate bonds		—		—		22,346		39		22,346		39
U.S. agency-based mortgage-backed securities		—		—		10,588		58		10,588		58
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		39,120		224		39,120		224
Total available-for-sale securities		—		—		79,062		336		79,062		336
Total	$	6,038	$	19	$	116,943	$	414	$	122,981	$	433

	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 June 30, 2019, we held 66 individual fixed maturity securities that were in an unrealized loss position, of which 61 individual fixed maturity securities were in a continuous unrealized loss position for longer than 12 months.

During the second quarter of 2019, we recognized through income $0.6 million of net unrealized gains on equity securities held as of June 30, 2019.  During the second quarter of 2018, we recognized through income $0.1 million of net unrealized gains on equity securities held as of June 30, 2018.  

During the six months ended June 30, 2019, we recognized through income $2.8 million of net unrealized gains on equity securities held as of June 30, 2019.  During the six months ended June 30, 2018, we recognized through income $0.3 million of net unrealized losses on equity securities held as of June 30, 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 and six months ended June 30, 2019 and 2018, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments.

Net realized losses in the quarter ended June 30, 2019 were $0.1 million resulting from the call of fixed maturity securities.  Net realized losses in the quarter ended June 30, 2018 were $1.1 million resulting from the sale of fixed maturity securities classified as available-for-sale.

Net realized losses in the six months ended June 30, 2019 were immaterial.  Net realized losses in the six months ended June 30, 2018 were $1.1 million resulting from the sale of fixed maturity securities classified as available-for-sale.

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Income Taxes

6 Months Ended

Jun. 30, 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 June 30, 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 June 30, 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

6 Months Ended

Jun. 30, 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 internally and periodically evaluated with our independent actuary.  Adjustments are made as experience develops and 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 six months ended June 30, 2019 and 2018:

	Six Months Ended June 30,
	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		121,727			126,060
Prior accident years		(23,245	)		(20,822	)
Total incurred		98,482			105,238
Less paid related to:
Current accident year		15,926			18,386
Prior accident years		77,362			84,194
Total paid		93,288			102,580
Net balance, end of period		696,387			689,614
Add amounts recoverable from reinsurers    on unpaid loss and loss adjustment expenses		98,659			93,987
Balance, end of period	$	795,046		$	783,601

The foregoing reconciliation reflects favorable development of the net reserves at June 30, 2019 and June 30, 2018. The favorable development reduced loss and loss adjustment expenses incurred by $23.2 million and $20.8 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

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Comprehensive Income and Accumulated Other Comprehensive Income

Note 7. Comprehensive Income and Accumulated Other Comprehensive Income

Comprehensive income was $23.1 million for the three months ended June 30, 2019, compared to $17.1 million for the three months ended June 30, 2018.  Comprehensive income was $48.3 million for the six months ended June 30, 2019, compared to $27.4 million for the same period in 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.

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 June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(in thousands)
Beginning balance	$	4,962		$	(2,236	)	$	(832	)	$	3,612
Other comprehensive income (loss) before    reclassification		5,001			(449	)		10,889			(5,863	)
Amounts reclassified from accumulated other    comprehensive income		(21	)		602			83			168
Change in deferred tax valuation allowance		198			—			—			—
Net current period other comprehensive    income (loss)		5,178			153			10,972			(5,695	)
Ending balance	$	10,140		$	(2,083	)	$	10,140		$	(2,083	)

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	Three Months Ended						Six Months Ended						Affected line item in the
Comprehensive Income	June 30,						June 30,						statement of income
	2019			2018			2019			2018
	(in thousands)
Unrealized gains (losses) on    available-for-sale securities	$	26		$	(762	)	$	(105	)	$	(466	)	Net realized losses on    investments
		26			(762	)		(105	)		(466	)	Income before income taxes
		(5	)		160			22			44		Income tax expense
	$	21		$	(602	)	$	(83	)	$	(422	)	Net income

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Fair Value Measurements

6 Months Ended

Jun. 30, 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 six months ended June 30, 2019.

At June 30, 2019, assets measured at fair value on a recurring basis are summarized below:

	June 30, 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	$	—	$	230,222	$	—	$	230,222
Corporate bonds		—		154,619		—		154,619
U.S. agency-based mortgage-backed securities		—		11,852		—		11,852
U.S. Treasury securities		61,200		—		—		61,200
Total securities available-for-sale—fixed maturity		61,200		396,693		—		457,893
Equity securities:
Domestic common stock		24,070		—		—		24,070
Total	$	85,270	$	396,693	$	—	$	481,963

At June 30, 2019, assets measured at amortized cost are summarized below:

	June 30, 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	$	—	$	455,033	$	—	$	455,033
Corporate bonds		—		110,164		—		110,164
U.S. agency-based mortgage-backed securities		—		12,976		—		12,976
U.S. Treasury securities		7,882		—		—		7,882
Obligations of U.S. government agencies		—		42,196		—		42,196
Asset-backed securities		—		956		—		956
Total held-to-maturity	$	7,882	$	621,325	$	—	$	629,207

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 June 30, 2019, the Company did not hold any securities measured at fair value on a nonrecurring basis due to impairment.

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  June 30, 2019				As of  December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Assets:
Fixed maturity securities—held-to-maturity	$	610,950	$	629,207	$	613,878	$	616,772
Fixed maturity securities—available-for-sale		457,893		457,893		478,730		478,730
Equity securities		24,070		24,070		18,651		18,651
Short-term investments		70,146		70,146		14,231		14,231
Cash and cash equivalents		51,246		51,246		40,344		40,344

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Treasury Stock

6 Months Ended

Jun. 30, 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 six months ended June 30, 2019 and 2018.

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Leases

6 Months Ended

Jun. 30, 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 2 months to 55 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:

	June 30, 2019			Balance Sheet Classification
	(in thousands)
Operating leases:
Operating lease right-of-use assets	$	501		Other assets
Operating lease liabilities	$	501		Accounts payable and other liabilities
Finance leases:
Finance lease right-of-use assets	$	185
Finance lease accumulated amortization    right-of-use assets		(149	)
Property and equipment, net	$	36		Property and equipment, net
Finance lease liabilities	$	78		Accounts payable and other liabilities

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Subsequent Events

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Note 11. Subsequent Events

On July 30, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share payable on September 20, 2019 to shareholders of record as of September 6, 2019. The Board considers the payment of a regular cash dividend each calendar quarter.

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 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 current guidance delays the recognition of credit losses until a probable loss has occurred.  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 June 30, 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)

6 Months Ended

Jun. 30, 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)

6 Months Ended

Jun. 30, 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				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
	(in thousands, except share and per share amounts)
Basic EPS:
Net income	$	17,890	$	16,956	$	37,290	$	33,125
Basic weighted average common shares		19,245,592		19,208,601		19,237,401		19,197,925
Basic earnings per common share	$	0.93	$	0.88	$	1.94	$	1.73
Diluted EPS:
Net income	$	17,890	$	16,956	$	37,290	$	33,125
Diluted weighted average common shares:
Weighted average common shares		19,245,592		19,208,601		19,237,401		19,197,925
Stock options and restricted stock		61,361		58,134		78,875		77,958
Diluted weighted average common shares		19,306,953		19,266,735		19,316,276		19,275,883
Diluted earnings per common share	$	0.93	$	0.88	$	1.93	$	1.72

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Investments (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	439,103	$	15,966	$	(36	)	$	455,033
Corporate bonds		108,756		1,425		(17	)		110,164
U.S. agency-based mortgage-backed securities		12,465		523		(12	)		12,976
U.S. Treasury securities and obligations of U.S.    government agencies		49,677		430		(29	)		50,078
Asset-backed securities		949		10		(3	)		956
Totals	$	610,950	$	18,354	$	(97	)	$	629,207

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 June 30, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	220,385	$	9,852	$	(15	)	$	230,222
Corporate bonds		151,705		2,953		(39	)		154,619
U.S. agency-based mortgage-backed securities		11,904		6		(58	)		11,852
U.S. Treasury securities and obligations    of U.S. government agencies		61,123		301		(224	)		61,200
Totals	$	445,117	$	13,112	$	(336	)	$	457,893

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 June 30, 2019 are summarized as follows:

	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	22,582	$	1,488	$	—	$	24,070
Total equity securities	$	22,582	$	1,488	$	—	$	24,070

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)
June 30, 2019
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	6,038	$	19	$	11,835	$	17	$	17,873	$	36
Corporate bonds		—		—		15,306		17		15,306		17
U.S. agency-based mortgage-backed securities		—		—		2,201		12		2,201		12
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		8,362		29		8,362		29
Asset-backed securities		—		—		177		3		177		3
Total held-to-maturity securities		6,038		19		37,881		78		43,919		97
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	—	$	—	$	7,008	$	15	$	7,008	$	15
Corporate bonds		—		—		22,346		39		22,346		39
U.S. agency-based mortgage-backed securities		—		—		10,588		58		10,588		58
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		39,120		224		39,120		224
Total available-for-sale securities		—		—		79,062		336		79,062		336
Total	$	6,038	$	19	$	116,943	$	414	$	122,981	$	433

	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 June 30, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	79,934	$	80,374
After one year through five years		216,626		220,476
After five years through ten years		84,179		87,047
After ten years		216,797		227,378
U.S. agency-based mortgage-backed securities		12,465		12,976
Asset-backed securities		949		956
Totals	$	610,950	$	629,207

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 June 30, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	49,966	$	50,018
After one year through five years		158,125		159,944
After five years through ten years		46,069		47,983
After ten years		179,053		188,096
U.S. agency-based mortgage-backed securities		11,904		11,852
Totals	$	445,117	$	457,893

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Loss Reserves (Tables)

6 Months Ended

Jun. 30, 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 six months ended June 30, 2019 and 2018:

	Six Months Ended June 30,
	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		121,727			126,060
Prior accident years		(23,245	)		(20,822	)
Total incurred		98,482			105,238
Less paid related to:
Current accident year		15,926			18,386
Prior accident years		77,362			84,194
Total paid		93,288			102,580
Net balance, end of period		696,387			689,614
Add amounts recoverable from reinsurers    on unpaid loss and loss adjustment expenses		98,659			93,987
Balance, end of period	$	795,046		$	783,601

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Comprehensive Income and Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 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 June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(in thousands)
Beginning balance	$	4,962		$	(2,236	)	$	(832	)	$	3,612
Other comprehensive income (loss) before    reclassification		5,001			(449	)		10,889			(5,863	)
Amounts reclassified from accumulated other    comprehensive income		(21	)		602			83			168
Change in deferred tax valuation allowance		198			—			—			—
Net current period other comprehensive    income (loss)		5,178			153			10,972			(5,695	)
Ending balance	$	10,140		$	(2,083	)	$	10,140		$	(2,083	)

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	Three Months Ended						Six Months Ended						Affected line item in the
Comprehensive Income	June 30,						June 30,						statement of income
	2019			2018			2019			2018
	(in thousands)
Unrealized gains (losses) on    available-for-sale securities	$	26		$	(762	)	$	(105	)	$	(466	)	Net realized losses on    investments
		26			(762	)		(105	)		(466	)	Income before income taxes
		(5	)		160			22			44		Income tax expense
	$	21		$	(602	)	$	(83	)	$	(422	)	Net income

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on Recurring Basis

At June 30, 2019, assets measured at fair value on a recurring basis are summarized below:

	June 30, 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	$	—	$	230,222	$	—	$	230,222
Corporate bonds		—		154,619		—		154,619
U.S. agency-based mortgage-backed securities		—		11,852		—		11,852
U.S. Treasury securities		61,200		—		—		61,200
Total securities available-for-sale—fixed maturity		61,200		396,693		—		457,893
Equity securities:
Domestic common stock		24,070		—		—		24,070
Total	$	85,270	$	396,693	$	—	$	481,963

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 June 30, 2019, assets measured at amortized cost are summarized below:

	June 30, 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	$	—	$	455,033	$	—	$	455,033
Corporate bonds		—		110,164		—		110,164
U.S. agency-based mortgage-backed securities		—		12,976		—		12,976
U.S. Treasury securities		7,882		—		—		7,882
Obligations of U.S. government agencies		—		42,196		—		42,196
Asset-backed securities		—		956		—		956
Total held-to-maturity	$	7,882	$	621,325	$	—	$	629,207

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  June 30, 2019				As of  December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Assets:
Fixed maturity securities—held-to-maturity	$	610,950	$	629,207	$	613,878	$	616,772
Fixed maturity securities—available-for-sale		457,893		457,893		478,730		478,730
Equity securities		24,070		24,070		18,651		18,651
Short-term investments		70,146		70,146		14,231		14,231
Cash and cash equivalents		51,246		51,246		40,344		40,344

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Schedule of Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases is as follows:

	June 30, 2019			Balance Sheet Classification
	(in thousands)
Operating leases:
Operating lease right-of-use assets	$	501		Other assets
Operating lease liabilities	$	501		Accounts payable and other liabilities
Finance leases:
Finance lease right-of-use assets	$	185
Finance lease accumulated amortization    right-of-use assets		(149	)
Property and equipment, net	$	36		Property and equipment, net
Finance lease liabilities	$	78		Accounts payable and other liabilities

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Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jan. 01, 2019
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Percentage of comparable consolidated amounts	95.00%	95.00%
Right-of-use assets	$ 501
Operating lease liabilities	$ 501
ASU 2016-02 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Right-of-use assets			$ 400
Operating lease liabilities			$ 300

XML

Stock Options and Restricted Stock - Additional Information (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) shares	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) Incentive_Plan shares	Jun. 30, 2018 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity incentive plans | Incentive_Plan			2
Market value of shares issued | $			$ 1,400	$ 500
Stock options exercised, Shares			5,000	15,000
Proceeds from stock option exercises | $			$ 20	$ 67
Share-based compensation expense | $	$ (100)	$ 800	$ 500	$ 800
Restricted Stock [Member] | Executive Officers [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued, shares			9,000
Restricted Stock [Member] | Non-employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued, shares			4,890	5,761
Performance Awards [Member] | Executive Officers [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued, shares			9,391	3,304
2005 Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options outstanding	0		0
2005 Incentive Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock outstanding	0		0

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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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share Basic [Abstract]
Net income	$ 17,890	$ 16,956	$ 37,290	$ 33,125
Basic weighted average common shares	19,245,592	19,208,601	19,237,401	19,197,925
Basic earnings per common share	$ 0.93	$ 0.88	$ 1.94	$ 1.73
Net income	$ 17,890	$ 16,956	$ 37,290	$ 33,125
Weighted average common shares	19,245,592	19,208,601	19,237,401	19,197,925
Stock options and restricted stock	61,361	58,134	78,875	77,958
Diluted weighted average common shares	19,306,953	19,266,735	19,316,276	19,275,883
Diluted earnings per common share	$ 0.93	$ 0.88	$ 1.93	$ 1.72

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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	Jun. 30, 2019	Dec. 31, 2018
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	$ 610,950	$ 613,878
Held-to-Maturity, Gross Unrealized Gains	18,354	5,860
Held-to-Maturity, Gross Unrealized Losses	(97)	(2,966)
Held-to-Maturity, Fair Value	629,207	616,772
States and Political Subdivisions [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	439,103	445,922
Held-to-Maturity, Gross Unrealized Gains	15,966	5,109
Held-to-Maturity, Gross Unrealized Losses	(36)	(2,084)
Held-to-Maturity, Fair Value	455,033	448,947
Corporate Bonds [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	108,756	91,762
Held-to-Maturity, Gross Unrealized Gains	1,425	62
Held-to-Maturity, Gross Unrealized Losses	(17)	(455)
Held-to-Maturity, Fair Value	110,164	91,369
U.S. Agency-Based Mortgage-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	12,465	8,102
Held-to-Maturity, Gross Unrealized Gains	523	327
Held-to-Maturity, Gross Unrealized Losses	(12)	(80)
Held-to-Maturity, Fair Value	12,976	8,349
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	49,677	67,042
Held-to-Maturity, Gross Unrealized Gains	430	340
Held-to-Maturity, Gross Unrealized Losses	(29)	(339)
Held-to-Maturity, Fair Value	50,078	67,043
Asset-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	949	1,050
Held-to-Maturity, Gross Unrealized Gains	10	22
Held-to-Maturity, Gross Unrealized Losses	(3)	(8)
Held-to-Maturity, Fair Value	$ 956	$ 1,064

XML

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	Jun. 30, 2019	Dec. 31, 2018
Investment [Line Items]
Totals, Amortized Cost	$ 445,117	$ 479,772
Totals, Gross Unrealized Gains	13,112	3,758
Totals, Gross Unrealized Losses	(336)	(4,800)
Totals, Fair Value	457,893	478,730
States and Political Subdivisions [Member]
Investment [Line Items]
Totals, Amortized Cost	220,385	231,848
Totals, Gross Unrealized Gains	9,852	3,515
Totals, Gross Unrealized Losses	(15)	(2,118)
Totals, Fair Value	230,222	233,245
Corporate Bonds [Member]
Investment [Line Items]
Totals, Amortized Cost	151,705	173,904
Totals, Gross Unrealized Gains	2,953	243
Totals, Gross Unrealized Losses	(39)	(933)
Totals, Fair Value	154,619	173,214
U.S. Agency-Based Mortgage-Backed Securities [Member]
Investment [Line Items]
Totals, Amortized Cost	11,904	12,835
Totals, Gross Unrealized Gains	6
Totals, Gross Unrealized Losses	(58)	(320)
Totals, Fair Value	11,852	12,515
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Investment [Line Items]
Totals, Amortized Cost	61,123	61,185
Totals, Gross Unrealized Gains	301
Totals, Gross Unrealized Losses	(224)	(1,429)
Totals, Fair Value	$ 61,200	$ 59,756

XML

Investments - Gross Unrealized Gains and Losses and Cost of Equity (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Investment [Line Items]
Equity securities, Cost	$ 22,582	$ 19,962
Equity securities, Gross Unrealized Gains	1,488	30
Equity securities, Gross Unrealized Losses		(1,341)
Equity securities, Fair Value	24,070	18,651
Domestic Common Stock [Member]
Investment [Line Items]
Equity securities, Cost	22,582	19,962
Equity securities, Gross Unrealized Gains	1,488	30
Equity securities, Gross Unrealized Losses		(1,341)
Equity securities, Fair Value	$ 24,070	$ 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	Jun. 30, 2019	Dec. 31, 2018
Investment [Line Items]
Within one year, Amortized Cost	$ 79,934
After one year through five years, Amortized Cost	216,626
After five years through ten years, Amortized Cost	84,179
After ten years, Amortized Cost	216,797
Held-to-maturity, Amortized Cost, Totals	610,950	$ 613,878
Within one year, Fair Value	80,374
After one year through five years, Fair Value	220,476
After five years through ten years, Fair Value	87,047
After ten years, Fair Value	227,378
Held-to-maturity, Fair Value, Totals	629,207	616,772
U.S. Agency-Based Mortgage-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost	12,465
Held-to-maturity, Amortized Cost, Totals	12,465	8,102
Held-to-maturity, Fair Value	12,976
Held-to-maturity, Fair Value, Totals	12,976	8,349
Asset-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost	949
Held-to-maturity, Amortized Cost, Totals	949	1,050
Held-to-maturity, Fair Value	956
Held-to-maturity, Fair Value, Totals	$ 956	$ 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	Jun. 30, 2019	Dec. 31, 2018
Investment [Line Items]
Within one year, Amortized Cost	$ 49,966
After one year through five years, Amortized Cost	158,125
After five years through ten years, Amortized Cost	46,069
After ten years, Amortized Cost	179,053
Totals, Amortized Cost	445,117	$ 479,772
Within one year, Fair Value	50,018
After one year through five years, Fair Value	159,944
After five years through ten years, Fair Value	47,983
After ten years, Fair Value	188,096
Total, Fair Value	457,893	478,730
U.S. Agency-Based Mortgage-Backed Securities [Member]
Investment [Line Items]
Available-for-sale securities, Amortized Cost	11,904
Totals, Amortized Cost	11,904	12,835
Available-for-sale securities, Fair value	11,852
Total, Fair Value	$ 11,852	$ 12,515

XML

Investments - Investment Securities Continuous Unrealized Loss Position (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Investment [Line Items]
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Less Than 12 Months	$ 6,038	$ 48,682
Held-to-maturity securities, Gross Unrealized Losses, Less Than 12 Months	19	99
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	37,881	278,163
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	78	2,867
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	43,919	326,845
Held-to-maturity securities, Gross Unrealized Losses, Total	97	2,966
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months		75,208
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months		360
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	79,062	218,832
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater	336	4,440
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	79,062	294,040
Available-for Sale, Gross Unrealized Losses, Total	336	4,800
Fair Value of Investments with Unrealized Losses, Less Than 12 months	6,038	123,890
Gross Unrealized Loss, Less Than 12 Months	19	459
Fair Value of Investments with Unrealized Losses, 12 Months or Greater	116,943	496,995
Gross Unrealized Losses, 12 Months or Greater	414	7,307
Fair Value of Investments with Unrealized Losses, Total	122,981	620,885
Gross Unrealized Losses, Total	433	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	6,038	28,369
Held-to-maturity securities, Gross Unrealized Losses, Less Than 12 Months	19	59
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	11,835	180,550
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	17	2,025
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	17,873	208,919
Held-to-maturity securities, Gross Unrealized Losses, Total	36	2,084
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months		16,109
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months		81
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	7,008	76,255
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater	15	2,037
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	7,008	92,364
Available-for Sale, Gross Unrealized Losses, Total	15	2,118
Corporate Bonds [Member]
Investment [Line Items]
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Less Than 12 Months		17,448
Held-to-maturity securities, Gross Unrealized Losses, Less Than 12 Months		36
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	15,306	48,315
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	17	419
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	15,306	65,763
Held-to-maturity securities, Gross Unrealized Losses, Total	17	455
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months		59,099
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months		279
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	22,346	70,306
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater	39	654
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	22,346	129,405
Available-for Sale, Gross Unrealized Losses, Total	39	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	2,201	2,287
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	12	80
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	2,201	2,287
Held-to-maturity securities, Gross Unrealized Losses, Total	12	80
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	10,588	12,515
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater	58	320
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	10,588	12,515
Available-for Sale, Gross Unrealized Losses, Total	58	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	8,362	46,486
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	29	335
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	8,362	49,351
Held-to-maturity securities, Gross Unrealized Losses, Total	29	339
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	39,120	59,756
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater	224	1,429
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	39,120	59,756
Available-for Sale, Gross Unrealized Losses, Total	224	1,429
Asset-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	177	525
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	3	8
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	177	525
Held-to-maturity securities, Gross Unrealized Losses, Total	$ 3	$ 8

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Investments - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) Security	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) Security	Jun. 30, 2018 USD ($)
Investments Schedule [Abstract]
Individual fixed maturity held in unrealized loss position | Security	66		66
Individual fixed maturity held in unrealized loss position longer than 12 months | Security	61		61
Net unrealized gains (losses) on equity securities	$ 642,000	$ 76,000	$ 2,800,000	$ (314,000)
Impairment losses recognized	0	0	$ 0	0
Net realized losses from call of fixed maturity securities	$ 100,000
Net realized losses on sale of fixed maturity securities classified as available-for-sale		$ 1,100,000		$ 1,100,000

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Income Taxes - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 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	6 Months Ended
	Jun. 30, 2019	Jun. 30, 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	121,727	126,060
Prior accident years	(23,245)	(20,822)
Total incurred	98,482	105,238
Less paid related to:
Current accident year	15,926	18,386
Prior accident years	77,362	84,194
Total paid	93,288	102,580
Net balance, end of period	696,387	689,614
Add amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses	98,659	93,987
Balance, end of period	$ 795,046	$ 783,601

XML

Loss Reserves - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Insurance [Abstract]
Loss and LAE Related to Prior Periods	$ 23,245	$ 20,822

XML

Comprehensive Income and Accumulated Other Comprehensive Income - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]
Comprehensive income	$ 23,068	$ 17,109	$ 48,262	$ 27,430
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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	$ 430,405	$ 432,068	$ 409,762	$ 425,423
Change in deferred tax valuation allowance	198
Ending Balance	449,443	445,391	449,443	445,391
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	4,962	(2,236)	(832)	3,612
Other comprehensive income (loss) before reclassification	5,001	(449)	10,889	(5,863)
Amounts reclassified from accumulated other comprehensive income	(21)	602	83	168
Change in deferred tax valuation allowance	198
Net current period other comprehensive income (loss)	5,178	153	10,972	(5,695)
Ending Balance	$ 10,140	$ (2,083)	$ 10,140	$ (2,083)

XML

Comprehensive Income and Accumulated Other Comprehensive Income - Reclassification Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net realized losses on investments	$ (82)	$ (1,111)	$ (23)	$ (1,142)
Income before income taxes	22,169	20,930	45,978	40,344
Income tax expense	(4,279)	(3,974)	(8,688)	(7,219)
Net income	17,890	16,956	37,290	33,125
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]
Net realized losses on investments	26	(762)	(105)	(466)
Income before income taxes	26	(762)	(105)	(466)
Income tax expense	(5)	160	22	44
Net income	$ 21	$ (602)	$ (83)	$ (422)

XML

Fair Value Measurements - Schedule of Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	$ 457,893	$ 478,730
Equity securities, Fair Value	24,070	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	457,893	478,730
Total	481,963	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	61,200	59,756
Total	85,270	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	396,693	418,974
Total	396,693	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	230,222	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	230,222	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	154,619	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	154,619	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	11,852	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	11,852	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	61,200	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	61,200	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	24,070	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	$ 24,070	$ 18,651

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Fair Value Measurements - Schedule of Assets Measured at Amortized Cost (Detail) - USD ($) $ in Thousands	Jun. 30, 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	$ 629,207	$ 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	455,033	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	110,164	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	12,976	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	7,882	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	42,196	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	956	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	7,882	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	7,882	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	621,325	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	455,033	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	110,164	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	12,976	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	42,196	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	$ 956	$ 1,064

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Fair Value Measurements - Summary of Carrying Values and Corresponding Fair Values for Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities—held to maturity	$ 610,950	$ 613,878
Fixed maturity securities—held to maturity	629,207	616,772
Fixed maturity securities—available-for-sale	457,893	478,730
Equity securities	24,070	18,651
Short-term investments	70,146	14,231
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities—held to maturity	629,207	616,772
Fixed maturity securities—available-for-sale	457,893	478,730
Equity securities	24,070	18,651
Short-term investments	70,146	14,231
Cash and cash equivalents	51,246	40,344
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities—available-for-sale	457,893	478,730
Equity securities	24,070	18,651
Short-term investments	70,146	14,231
Cash and cash equivalents	$ 51,246	$ 40,344

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Treasury Stock - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Oct. 31, 2016
Equity [Abstract]
Share repurchase program, new limit amount			$ 25,000,000.0
Shares repurchased under the program	0	0

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Leases - Additional Information (Detail)	6 Months Ended
	Jun. 30, 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	2 months
Finance lease, remaining lease term	2 months
Maximum [Member]
Lessee Lease Description [Line Items]
Operating lease, remaining lease term	55 months
Finance lease, remaining lease term	55 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	Jun. 30, 2019 USD ($)
Leases [Abstract]
Operating lease right-of-use assets	$ 501
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets
Operating lease liabilities	$ 501
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	(149)
Property and equipment, net	$ 36
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:PropertyPlantAndEquipmentNet
Finance lease liabilities	$ 78
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]	Jul. 30, 2019 $ / shares
Subsequent Event [Line Items]
Cash dividend per share	$ 0.25
Date of payment for dividend	Sep. 20, 2019
Date of record for dividend payment	Sep. 06, 2019