DERIDDER, La., July 31, 2013 (GLOBE NEWSWIRE) -- AMERISAFE, Inc. (Nasdaq: AMSF ), a specialty provider of hazardous workers' compensation insurance, today announced results for the second quarter ended June 30, 2013.
| Summary of Results | ||||||||||||
| (in 000's, except per share data) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2013 | 2012 | % Change | 2013 | 2012 | % Change | |||||||
| Net premiums earned | $ 81,983 | $ 69,733 | 17.6% | $161,692 | $139,523 | 15.9% | ||||||
| Net investment income | 6,649 | 6,605 | 0.7% | 13,319 | 13,519 | (1.5%) | ||||||
| Net realized gains (losses) on investments (pre-tax) | (1,291) | 137 | NM | (1,267) | 1,928 | NM | ||||||
| Net income | 7,644 | 3,445 | 121.9% | 16,495 | 13,006 | 26.8% | ||||||
| Diluted earnings per share | $ 0.41 | $ 0.19 | 115.8% | $ 0.88 | $ 0.70 | 25.7% | ||||||
| Operating net income | 8,483 | 3,356 | 152.8% | 17,319 | 11,753 | 47.4% | ||||||
| Operating earnings per share | $ 0.45 | $ 0.18 | 150.0% | $ 0.93 | $ 0.63 | 47.6% | ||||||
| Book value per share | $ 21.29 | $ 19.98 | 6.5% | $ 21.29 | $ 19.98 | 6.5% | ||||||
| Net combined ratio | 93.8% | 103.8% | 94.2% | 99.8% | ||||||||
| Return on average equity | 7.8% | 3.8% | 8.5% | 7.3% | ||||||||
Commenting on these results, Allen Bradley, AMERISAFE's Chairman and Chief Executive Officer, stated, "The workers' compensation market remains attractive with strong pricing and stable frequency trends. Investment yields, however, continue to create headwinds causing many carriers to reassess their underwriting approach and remain disciplined. The combination of a disciplined marketplace and expanding residual market provides Amerisafe with an attractive underwriting environment. Our continued focus on risk selection and pricing, positions Amerisafe for profitable growth. As such, we remain upbeat in our outlook for the workers' compensation market as well as the prospects for Amerisafe."
| Insurance Results | ||||||||||||
| (in 000's) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | % | June 30, | % | |||||||||
| 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||
| Gross Premiums Written | $ 95,815 | $ 85,476 | 12.1% | $194,938 | $ 170,400 | 14.4% | ||||||
| Net Premiums Earned | 81,983 | 69,733 | 17.6% | 161,692 | 139,523 | 15.9% | ||||||
| Loss & LAE | 56,813 | 56,720 | 0.2% | 112,814 | 108,563 | 3.9% | ||||||
| Underwriting & Other | 19,663 | 15,347 | 28.1% | 38,540 | 30,062 | 28.2% | ||||||
| Policyholder dividends | 388 | 330 | 17.6% | 942 | 714 | 31.9% | ||||||
| Underwriting profit (loss) (pre-tax) | 5,119 | (2,664) | NM | 9,396 | 184 | NM | ||||||
| Insurance Ratios: | ||||||||||||
| Current A/Y loss ratio | 73.2% | 76.5% | 73.2% | 76.5% | ||||||||
| Prior A/Y loss ratio | (3.9%) | 4.8% | (3.4%) | 1.3% | ||||||||
| Net loss ratio | 69.3% | 81.3% | 69.8% | 77.8% | ||||||||
| Net expense ratio | 24.0% | 22.0% | 23.8% | 21.5% | ||||||||
| Net dividend ratio | 0.5% | 0.5% | 0.6% | 0.5% | ||||||||
| Net combined ratio | 93.8% | 103.8% | 94.2% | 99.8% | ||||||||
- Gross premiums written continued to grow in the second quarter. Voluntary premiums written increased 12.8% in the quarter and 14.4% for the six months ended June 30, 2013 compared to the same periods in 2012. Additionally, payroll audits and related premium adjustments for policies written in previous periods increased premiums $3.7 million in the second quarter and $9.7 million in the six months ended June 30, 2013. In 2012, these premium adjustments grew premium $4.5 million in the second quarter and $9.9 million for the six months ended June 30.
- The current accident year loss ratio for the second quarter remained at 73.2%. During the quarter, the Company experienced favorable loss development, which reduced loss and loss adjustment expenses by $3.2 million, primarily attributable to accident years 2008 and prior.
- For the second quarter, the underwriting expense ratio rose to 24.0% from 22.0% a year ago primarily driven by a reduced profit commission resulting from high severity losses; a timing difference on premium taxes; and an increase in assessment expenses. For the first six months, the increase in the underwriting expense ratio resulted from these same items.
- The effective tax rate for the three and six months ended June 30, 2013 was 28.2% and 24.1% compared to 14.6% and 15.9%, respectively, for the prior year periods. The increase was driven by the lower ratio of tax-exempt investment income to pre-tax income in 2013 compared to 2012.
Chief Operating Officer, Janelle Frost noted, "We are pleased with another quarter of increased pricing, coupled with higher policy retention. Our results from premium growth, a decline in claim frequency and favorable prior year loss development reflect in a 10 percentage point decline in our quarterly combined ratio."
| Investment Results | ||||||||||||
| (in 000's) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2013 | 2012 | % Change | 2013 | 2012 | % Change | |||||||
| Net investment income | $ 6,649 | $ 6,605 | 0.7% | $ 13,319 | $ 13,519 | (1.5%) | ||||||
| Net realized gains (losses) on investments (pre-tax) | (1,291) | 137 | N/M | (1,267) | 1,928 | N/M | ||||||
| Pre-tax investment yield | 2.9% | 3.0% | 2.9% | 3.1% | ||||||||
| Tax equivalent yield (1) | 4.1% | 4.5% | 4.1% | 4.5% | ||||||||
| ________________________________ | ||||||||||||
| (1) The tax equivalent yield is calculated using the effective interest rate and a 35% marginal tax rate. | ||||||||||||
- As of June 30, 2013, the carrying value of AMERISAFE's investment portfolio, including cash and cash equivalents, was $944.1 million and the fair value of the portfolio was $972.8 million.
Capital Management
- The Company paid its second consecutive quarterly dividend of $0.08 on June 26, 2013. On July 30, 2013, the Company's Board of Directors declared a quarterly cash dividend of $0.08 per share, payable on September 27, 2013 to shareholders of record as of September 13, 2013.
- During the quarter, no shares were repurchased under the share repurchase plan. Since inception of this plan, the Company has repurchased a total of 1,258,250 shares for $22.4 million, or an average per share price of $17.78, including commissions.
| Supplemental Information | ||||||||
| (in 000's except share and per share data) | ||||||||
| Three Months Ended | Six Months Ended | |||||||
| June 30, | June 30, | |||||||
| 2013 | 2012 | 2013 | 2012 | |||||
| Net income | $7,644 | $3,445 | $16,495 | $13,006 | ||||
| Less: Net realized capital gains (losses) | (1,291) | 137 | (1,267) | 1,928 | ||||
| Tax effect (1) | 452 | (48) | 443 | (675) | ||||
| Operating net income (2) | 8,483 | 3,356 | 17,319 | 11,753 | ||||
| Avg shareholders' equity (3) | $391,107 | $361,251 | $386,869 | $356,443 | ||||
| Less: Average Other Comprehensive Income | 404 | 2,414 | 677 | 2,440 | ||||
| Adjusted average shareholders' equity | 390,703 | 358,837 | 386,192 | 354,003 | ||||
| Diluted weighted average common shares | 18,712,299 | 18,588,495 | 18,713,776 | 18,586,156 | ||||
| Diluted earnings per common share | $0.41 | $0.19 | $0.88 | $0.70 | ||||
| Operating earnings per common share (2) | $0.45 | $0.18 | $0.93 | $0.63 | ||||
| Return on average equity (4) | 7.8% | 3.8% | 8.5% | 7.3% | ||||
| Operating return on average equity (2) | 8.7% | 3.7% | 9.0% | 6.6% | ||||
| (1) The tax effect of net realized capital gains is calculated assuming an annual tax rate of 35%. | ||||||||
| (2) Operating net income, operating return on average equity and operating earnings per share are non-GAAP financial measures, and management believes that investor's understanding of core operating performance is enhanced by AMERISAFE's disclosure of these financial measures. | ||||||||
| (3) Average shareholders' equity is calculated by taking the average of the beginning and ending adjusted shareholders' equity. | ||||||||
| (4) Return on average equity is calculated by dividing the annualized net income by the average shareholders' equity. | ||||||||
Conference Call Information
AMERISAFE has scheduled a conference call for August 1, 2013, at 10:30 a.m. Eastern Time to discuss the results for the quarter and the outlook for future periods. To participate in the conference call dial 720-545-0027 at least 10 minutes before the call begins and ask for the AMERISAFE conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible through August 8, 2013. To access the replay, dial 855-859-2056 or 404-537-3406 and use the pass 14777304#.
Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting http://www.amerisafe.com. To listen to the live call on the web, please visit the website at least fifteen minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call and will remain available for approximately 60 days at http://www.amerisafe.com .
About AMERISAFE
AMERISAFE, Inc. is a specialty provider of workers' compensation insurance focused on small to mid-sized employers engaged in hazardous industries, principally construction, manufacturing, trucking and agriculture. AMERISAFE actively markets workers' compensation insurance in 30 states and the District of Columbia.
Forward Looking Statements
Statements made in this press release that are not historical facts, including statements accompanied by words such as "will," "believe," "anticipate," "expect," "estimate," or similar words are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding AMERISAFE's plans and performance. These statements are based on management's estimates, assumptions and projections as of the date of this release and are not guarantees of future performance and include statements regarding management's views and expectations of the workers' compensation market, the Company's growth opportunities, underwriting margins and actions by competitors. Actual results may differ materially from the results expressed or implied in these statements as the results of risks, uncertainties and other factors including the factors set forth in the Company's filings with the Securities and Exchange Commission, including AMERISAFE's Annual Report on Form 10-K for the year ended December 31, 2012. AMERISAFE cautions you not to place undue reliance on the forward-looking statements contained in this release. AMERISAFE does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.
- Tables to follow -
| AMERISAFE, INC. AND SUBSIDIARIES | ||||
| Consolidated Statements of Income | ||||
| (in 000's) | ||||
| (unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Revenues: | ||||
| Gross premiums written | $95,815 | $85,476 | $194,938 | $170,400 |
| Ceded premiums written | (4,576) | (3,971) | (9,057) | (7,875) |
| Net premiums written | $91,239 | $81,505 | $185,881 | $162,525 |
| Net premiums earned | $81,983 | $69,733 | $161,692 | $139,523 |
| Net investment income | 6,649 | 6,605 | 13,319 | 13,519 |
| Net realized gains (losses) on investments | (1,291) | 137 | (1,267) | 1,928 |
| Fee and other income | 170 | 162 | 279 | 321 |
| Total revenues | $87,511 | $76,637 | $174,023 | $155,291 |
| Expenses: | ||||
| Loss and LAE | $56,813 | $56,720 | $112,814 | $108,563 |
| Underwriting & Other | 19,663 | 15,347 | 38,540 | 30,062 |
| Interest expense | -- | 207 | -- | 486 |
| Policyholder dividends | 388 | 330 | 942 | 714 |
| Total expenses | $76,864 | $72,604 | $152,296 | $139,825 |
| Income before taxes | $10,647 | $4,033 | $21,727 | $15,466 |
| Income tax expense | 3,003 | 588 | 5,232 | 2,460 |
| Net income | $7,644 | $3,445 | $16,495 | $13,006 |
| AMERISAFE, INC. AND SUBSIDIARIES | ||||
| Consolidated Statements of Income (cont.) | ||||
| (in 000's, except share and per share amounts) | ||||
| (unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Basic EPS: | ||||
| Net income | $7,644 | $3,445 | $16,495 | $13,006 |
| Less: Portion allocable to unvested shares | 26 | 2 | 41 | 5 |
| Net Income available to common shareholders | 7,618 | 3,443 | 16,454 | 13,001 |
| Basic weighted average common shares | 18,353,174 | 18,150,306 | 18,317,452 | 18,145,525 |
| Basic earnings per share | $0.42 | $0.19 | $0.90 | $0.72 |
| Diluted EPS: | ||||
| Net income available to common shareholders -diluted | 7,619 | 3,443 | 16,455 | 13,002 |
| Diluted weighted average common shares: | ||||
| Weighted average common shares | 18,353,174 | 18,150,306 | 18,317,452 | 18,145,525 |
| Stock options & Performance shares | 359,125 | 438,189 | 396,324 | 440,631 |
| Diluted weighted average common shares | 18,712,299 | 18,588,495 | 18,713,776 | 18,586,156 |
| Diluted Earnings Per Share | $0.41 | $0.19 | $0.88 | $0.70 |
| AMERISAFE, INC. AND SUBSIDIARIES | ||
| Consolidated Balance Sheet | ||
| (in 000's) | ||
| June 30, | December 31, | |
| 2013 | 2012 | |
| (unaudited) | ||
| Assets | ||
| Investments | $860,681 | $808,116 |
| Cash and cash equivalents | 83,424 | 92,676 |
| Amounts recoverable from reinsurers | 103,254 | 101,352 |
| Premiums receivable, net | 180,245 | 141,950 |
| Deferred income taxes | 33,773 | 29,521 |
| Deferred policy acquisition costs | 20,959 | 18,419 |
| Other assets | 31,537 | 28,912 |
| Total Assets | $1,313,873 | $1,220,946 |
| Liabilities and Shareholders' Equity | ||
| Liabilities: | ||
| Reserves for loss and loss adjustment expenses | $593,470 | $570,450 |
| Unearned premiums | 164,716 | 140,528 |
| Insurance-related assessments | 28,533 | 22,244 |
| Other liabilities | 134,639 | 106,502 |
| Total shareholders' equity | 392,515 | 381,222 |
| Total liabilities and shareholders' equity | $1,313,873 | $1,220,946 |
Michael Grasher, EVP & CFO AMERISAFE, Inc. 337-463-9052
