• AMERISAFE Announces 2017 Third Quarter Results

    Источник: Nasdaq GlobeNewswire / 25 окт 2017 16:30:08   America/New_York

    DERIDDER, La., Oct. 25, 2017 (GLOBE NEWSWIRE) -- AMERISAFE, Inc. (Nasdaq:AMSF), a specialty provider of hazardous workers’ compensation insurance, today announced results for the third quarter ended September 30, 2017.

              
     Three Months Ended  Nine Months Ended   
     September 30,  September 30,   
      2017  2016 % Change 2017  2016 % Change 
     (in thousands, except per share data)  (in thousands, except per share data)   
    Net premiums earned$85,118 $89,918 -5.3% $258,779 $276,607 -6.4%  
    Net investment income 7,788  8,006 -2.7%  21,969  20,251 8.5%  
    Net realized gains (losses) on         
    investments (pre-tax) (192) 181 NM  (761) 974 NM  
    Net income 16,577  17,896 -7.4%  45,582  58,792 -22.5%  
    Diluted earnings per share$0.86 $0.93 -7.5% $2.37 $3.06 -22.5%  
    Operating net income 16,702  17,778 -6.1%  46,077  58,159 -20.8%  
    Operating earnings per share$0.87 $0.93 -6.5% $2.40 $3.03 -20.8%  
    Book value per share$25.72 $26.51 -3.0% $25.72 $26.51 -3.0%  
    Net combined ratio 81.4% 80.3%   83.5% 77.0%   
    Return on average equity 13.6% 14.2%   12.8% 16.3%   
              

    G. Janelle Frost, President and Chief Executive Officer, said, “Capital strength and continued profitable underwriting led to this quarter’s declaration of an extraordinary dividend.  AMERISAFE is well positioned for the future and remains committed to the underwriting discipline and claims management that provides protection to our policyholders and returns to our shareholders.”

    Insurance Results

             
     Three Months Ended  Nine Months Ended  
     September 30,  September 30,  
      2017   2016 % Change  2017   2016 % Change 
     (in thousands)  (in thousands)  
             
    Gross premiums written$87,035  $88,837 -2.0% $269,152  $292,443 -8.0% 
    Net premiums earned 85,118   89,918 -5.3%  258,779   276,607 -6.4% 
    Loss and loss adjustment expenses incurred 48,394   50,526 -4.2%  151,038   146,413 3.2% 
    Underwriting and certain other operating costs,       
    commissions, salaries and benefits 19,281   20,764 -7.1%  60,686   63,459 -4.4% 
    Policyholder dividends 1,573   889 76.9%  4,107   3,195 28.5% 
    Underwriting profit (pre-tax)$15,870  $17,739 -10.5% $42,948  $63,540 -32.4% 
             
    Insurance Ratios:        
    Current accident year loss ratio 69.0%  67.9%   69.0%  67.9%  
    Prior accident year loss ratio -12.1%  -11.7%   -10.6%  -15.0%  
    Net loss ratio 56.9%  56.2%   58.4%  52.9%  
    Net underwriting expense ratio 22.7%  23.1%   23.5%  22.9%  
    Net dividend ratio 1.8%  1.0%   1.6%  1.2%  
    Net combined ratio 81.4%  80.3%   83.5%  77.0%  
             
    • Gross premiums written in the quarter decreased by $1.8 million, or 2.0%, primarily due to lower voluntary premiums written.  Voluntary premium for policies written during the quarter ended September 30, 2017 declined by 1.9% compared with the third quarter of 2016.
    • Payroll audits and related premium adjustments decreased premiums written by $1.1 million in the third quarter of 2017, compared to a decrease of $1.2 million in the third quarter of 2016.
    • The current accident year loss ratio for the third quarter was 69.0%, an increase of 1.1 percentage points from 67.9% in 2016.  During the quarter, the Company experienced favorable loss development for prior accident years which reduced loss and loss adjustment expenses by $10.3 million, primarily attributable to accident years 2015, 2014 and 2013.  The favorable reserve development reflects improved trends for closing claims and by favorable case reserve development on claims during the quarter.
    • For the quarter ended September 30, 2017, the underwriting expense ratio was 22.7% compared to 23.1% in the same quarter in 2016.  The decrease in the quarter was due to lower assessments and commission expense compared with last year’s third quarter. 
    • The effective tax rate for the quarter ended September 30, 2017 was 29.6% compared with 31.2% for the third quarter of 2016.  The decrease in the tax rate resulted from a higher proportion of tax-exempt income to underwriting income relative to the third quarter of 2016.

    Investment Results

             
     Three Months Ended  Nine Months Ended  
     September 30,  September 30,  
      2017  2016 % Change  2017  2016 % Change 
     (in thousands)  (in thousands)  
    Net investment income$7,788 $8,006 -2.7% $21,969 $20,251 8.5% 
    Net realized gains (losses) on        
    investments (pre-tax) (192) 181 NM  (761) 974 NM 
    Pre-tax investment yield 2.6% 2.7%   2.5% 2.4%  
    Tax-equivalent yield (1) 3.2% 3.2%   3.2% 3.2%  
    ________________________________       
             

    (1) The tax equivalent yield is calculated using the effective interest rate and the appropriate marginal tax rate. 

    • Net investment income for the quarter ending September 30, 2017, decreased 2.7% to $7.8 million from $8.0 million in the third quarter of 2016.  In last year’s third quarter, there was a significant gain in value of an investment in a limited partnership hedge fund.  The change in value of this investment is recorded in investment income each quarter. 
    • As of September 30, 2017, the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $1.2 billion.  

    Capital Management and Extraordinary Dividend

    The company paid a regular quarterly cash dividend of $0.20 per share on September 22, 2017.  On October 23, 2017 the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share, payable on December 28, 2017 to shareholders of record as of December 14, 2017.

    In addition, on October 23, 2017 the Company’s Board of Directors declared an extraordinary dividend of $3.50 per share, payable on December 28, 2017 to shareholders of record as of December 14, 2017.

    Book value per share at September 30, 2017 was $25.72, an increase of 8.4% from $23.72 as of December 31, 2016.  During the quarter, no shares were repurchased under the Company’s share repurchase plan. 

    Supplemental Information

         
     Three Months EndedNine Months Ended
     September 30,September 30,
      2017   2016  2017   2016 
     (in thousands, except share and per share data)
         
    Net income$16,577  $17,896 $45,582  $58,792 
    Less: Net realized gains (losses) on investments (192)  181  (761)  974 
    Tax effect (1) 67   (63) 266   (341)
    Operating net income (2)$16,702  $17,778 $46,077  $58,159 
         
    Average shareholders’ equity (3)$488,169  $502,845 $475,548  $481,862 
    Less: Average accumulated other comprehensive income 2,725   7,453  1,271   4,592 
    Average adjusted shareholders’ equity$485,444  $495,392 $474,277  $477,270 
         
    Diluted weighted average common shares 19,236,114   19,190,191  19,235,955   19,186,398 
         
    Return on average equity (4) 13.6%  14.2% 12.8%  16.3%
    Operating return on average adjusted equity (2) 13.8%  14.4% 13.0%  16.2%
    Diluted earnings per share$0.86  $0.93 $2.37  $3.06 
    Operating earnings per share (2)$0.87  $0.93 $2.40  $3.03 
    ________________________________    

    (1) The tax effect of net realized capital gains is calculated assuming an annual tax rate of 35%.

    (2) Operating net income, operating earnings per share, and operating return on average adjusted equity are non-GAAP financial measures.  Management believes that investors’ understanding of core operating performance is enhanced by AMERISAFE’s disclosure of these financial measures.

    (3) Average shareholders’ equity is calculated by taking the average of the beginning and ending shareholders’ equity.

    (4) Return on average equity is calculated by dividing the annualized net income by the average shareholders’ equity.

    Conference Call Information
    AMERISAFE has scheduled a conference call for October 26, 2017, at 10:30 a.m. Eastern Time to discuss the results for the quarter, as well as the outlook for future periods.  To participate in the conference call dial 877-225-7695 (Domestic) or 720-545-0027 (International) at least ten 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 November 3, 2017.  To access the replay, dial 855-859-2056 or 404-537-3406 and use the pass code 88043900#.

    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 at http://www.amerisafe.com.

    About AMERISAFE
    AMERISAFE, Inc. is a specialty provider of workers’ compensation insurance focused on small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, manufacturing, and agriculture.  AMERISAFE actively markets workers’ compensation insurance in 27 states. 

    Forward Looking Statements
    Statements made in this press release that are not historical facts, including statements accompanied by words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” or similar words are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding AMERISAFE’s plans and performance.  These statements are based on management’s estimates, assumptions and projections as of the date of this release and are not guarantees of future performance and include statements regarding management’s views and expectations of the workers’ compensation market, the Company’s growth opportunities, underwriting margins and actions by competitors.  Actual results may differ materially from the results expressed or implied in these statements if the underlying assumptions prove to be incorrect or as the results of risks, uncertainties and other factors including the factors set forth in the Company’s filings with the Securities and Exchange Commission, including AMERISAFE’s Annual Report on Form 10-K for the year ended December 31, 2016.  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 thousands)
          
     Three Months EndedNine Months Ended 
     September 30,September 30, 
      2017   2016   2017   2016  
     (unaudited)(unaudited) 
    Revenues:     
    Gross premiums written$87,035  $88,837  $269,152  $292,443  
    Ceded premiums written (1,992)  (2,945)  (6,581)  (8,046) 
    Net premiums written$85,043  $85,892  $262,571  $284,397  
          
    Net premiums earned$85,118  $89,918  $258,779  $276,607  
    Net investment income 7,788   8,006   21,969   20,251  
    Net realized gains (losses) on investments (192)  181   (761)  974  
    Fee and other income 90   101   284   272  
    Total revenues 92,804   98,206   280,271   298,104  
          
    Expenses:     
    Loss and loss adjustment expenses incurred 48,394   50,526   151,038   146,413  
    Underwriting and other operating costs 19,281   20,764   60,686   63,459  
    Policyholder dividends 1,573   889   4,107   3,195  
    Total expenses 69,248   72,179   215,831   213,067  
          
    Income before taxes 23,556   26,027   64,440   85,037  
    Income tax expense 6,979   8,131   18,858   26,245  
    Net income$16,577  $17,896  $45,582  $58,792  
          
          
    AMERISAFE, INC. AND SUBSIDIARIES
    Consolidated Statements of Income (cont.)
    (in thousands, except share and per share data)
          
     Three Months EndedNine Months Ended 
     September 30,September 30, 
      2017   2016   2017   2016  
     (unaudited)(unaudited) 
    Basic EPS:     
    Net income$16,577  $17,896  $45,582  $58,792  
          
    Basic weighted average common shares 19,171,912   19,121,947   19,161,529   19,092,298  
    Basic earnings per share$0.86  $0.94  $2.38  $3.08  
          
    Diluted EPS:     
    Net income$16,577  $17,896  $45,582  $58,792  
          
    Diluted weighted average common shares:     
    Weighted average common shares 19,171,912   19,121,947   19,161,529   19,092,298  
    Stock options and performance shares 64,202   68,244   74,426   94,100  
    Diluted weighted average common shares 19,236,114   19,190,191   19,235,955   19,186,398  
          
    Diluted earnings per share$0.86  $0.93  $2.37  $3.06  
          

     

    AMERISAFE, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets
    (in thousands)
       
     September 30,December 31,
      2017  2016
     (unaudited) 
    Assets  
    Investments$1,144,521 $1,084,474
    Cash and cash equivalents 80,378  58,936
    Amounts recoverable from reinsurers 84,958  83,666
    Premiums receivable, net 185,497  183,005
    Deferred income taxes 31,572  33,811
    Deferred policy acquisition costs 20,906  19,300
    Other assets 35,416  55,664
     $1,583,248 $1,518,856
       
    Liabilities and Shareholders’ Equity  
    Liabilities:  
    Reserves for loss and loss adjustment expenses$755,026 $742,776
    Unearned premiums 165,820  162,028
    Insurance-related assessments 30,293  31,742
    Other liabilities 137,164  126,160
       
    Shareholders’ equity 494,945  456,150
    Total liabilities and shareholders’ equity$1,583,248 $1,518,856
       

     

    Contact: 
    Neal A Fuller, EVP & CFO
    AMERISAFE, Inc.
    337-463-9052

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