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, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

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 21, 2023, there were 19,180,014 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 5	Other Information	28
Item 6	Exhibits	29

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;

•changes in relationships with independent agencies (including retail and wholesale brokers and agents);

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

•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 service 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;

•the impact of pandemics on the business operations of our insurance subsidiaries and policyholders, the value of our investments, and our revenues, results of operations and cash flows;

•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, 2022. 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, 2023			December 31, 2022
	(unaudited)
Assets
Investments:
Fixed maturity securities—held-to-maturity, at amortized cost net of allowance    for credit losses of $204 and $239 in 2023 and 2022, respectively,    (fair value $455,613 and $468,144 in 2023 and 2022, respectively)	$	476,401		$	491,688
Fixed maturity securities—available-for-sale, at fair value    (amortized cost $355,670, allowance for credit losses of $0 in 2023    and amortized cost $338,593, allowance for credit losses of $0 in 2022)		340,384			321,121
Equity securities, at fair value    (cost $50,115 and $50,185 in 2023 and 2022, respectively)		65,405			62,058
Short-term investments		46,540			14,120
Total investments		928,730			888,987
Cash and cash equivalents		33,922			61,469
Amounts recoverable from reinsurers    (net of allowance for credit losses of $338 and $372 in 2023 and 2022, respectively)		122,721			125,677
Premiums receivable    (net of allowance for credit losses of $4,787 and $4,852 in 2023 and 2022, respectively)		141,943			121,713
Deferred income taxes		23,437			22,794
Accrued interest receivable		8,387			8,428
Property and equipment, net		6,561			7,225
Deferred policy acquisition costs		18,927			17,401
Federal income tax recoverable		—			1,453
Other assets		14,287			14,132
Total assets	$	1,298,915		$	1,269,279
Liabilities and shareholders’ equity
Liabilities:
Reserves for loss and loss adjustment expenses	$	684,613		$	696,037
Unearned premiums		126,244			114,976
Amounts held for others		52,916			48,811
Policyholder deposits		34,957			36,312
Insurance-related assessments		18,015			17,653
Federal income tax payable		2,301			—
Accounts payable and other liabilities		37,967			38,058
Payable for investments purchased		1,335			—
Total liabilities		958,348			951,847
Shareholders’ equity:
Common stock: voting—$0.01 par value authorized shares—50,000,000    in 2023 and 2022; 20,702,713 and 20,678,572 shares issued; and 19,180,014    and 19,155,873 shares outstanding in 2023 and 2022, respectively		207			207
Additional paid-in capital		221,759			220,299
Treasury stock, at cost (1,522,699 shares in 2023 and 2022)		(34,758	)		(34,758	)
Accumulated earnings		165,459			145,512
Accumulated other comprehensive loss, net		(12,100	)		(13,828	)
Total shareholders’ equity		340,567			317,432
Total liabilities and shareholders’ equity	$	1,298,915		$	1,269,279

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,
	2023			2022			2023			2022
Revenues
Gross premiums written	$	71,704		$	74,460		$	154,191		$	152,251
Ceded premiums written		(3,965	)		(2,725	)		(8,144	)		(5,284	)
Net premiums written	$	67,739		$	71,735		$	146,047		$	146,967
Net premiums earned	$	65,598		$	70,279		$	134,779		$	137,835
Net investment income		7,724			6,485			15,157			12,598
Net realized gains on investments		75			1,079			333			1,817
Net unrealized gains (losses) on equity securities		2,048			(9,942	)		3,417			(8,902	)
Fee and other income		214			135			411			248
Total revenues		75,659			68,036			154,097			143,596
Expenses
Loss and loss adjustment expenses incurred		35,645			40,326			74,654			78,067
Underwriting and certain other operating costs		7,427			7,684			12,583			11,674
Commissions		5,845			5,453			11,648			10,661
Salaries and benefits		6,700			6,776			12,723			12,691
Policyholder dividends		490			688			1,421			1,877
Provision for investment related credit loss expense (benefit)		(16	)		(14	)		(35	)		81
Total expenses		56,091			60,913			112,994			115,051
Income before income taxes		19,568			7,123			41,103			28,545
Income tax expense		3,941			991			8,137			5,082
Net income	$	15,627		$	6,132		$	32,966		$	23,463
Earnings per share
Basic	$	0.82		$	0.32		$	1.72		$	1.22
Diluted	$	0.81		$	0.32		$	1.72		$	1.21
Shares used in computing earnings per share
Basic		19,139,735			19,273,934			19,135,564			19,302,805
Diluted		19,196,755			19,332,168			19,200,377			19,367,085
Cash dividends declared per common share	$	0.34		$	0.31		$	0.68		$	0.62

See accompanying notes.

5

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023		2022
Net income	$	15,627		$	6,132		$	32,966	$	23,463
Other comprehensive income (loss):
Unrealized gain (loss) on debt securities, net of tax		(2,616	)		(8,931	)		1,728		(22,411	)
Comprehensive income (loss)	$	13,011		$	(2,799	)	$	34,694	$	1,052

See accompanying notes.

6

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Three Months Ended June 30, 2023 and 2022

(in thousands, except share data)

(unaudited)

	Common Stock				Additional Paid-In		Treasury Stock						Accumulated			Accumulated Other Comprehensive
	Shares		Amounts		Capital		Shares			Amounts			Earnings			Loss			Total
Balance at March 31, 2023		20,677,086	$	207	$	220,556		(1,522,699	)	$	(34,758	)	$	156,334		$	(9,484	)	$	332,855
Comprehensive income:
Net income		—		—		—		—			—			15,627			—			15,627
Other comprehensive    income:
Change in unrealized    losses on debt    securities, net of tax		—		—		—		—			—			—			(2,616	)		(2,616	)
Comprehensive income:																				13,011
Common stock issued		25,627		—		944		—			—			—			—			944
Share-based compensation		—		—		259		—			—			—			—			259
Tax benefit from share-based      payments		—		—		—		—			—			—			—			—
Dividends to shareholders		—		—		—		—			—			(6,502	)		—			(6,502	)
Balance at June 30, 2023		20,702,713	$	207	$	221,759		(1,522,699	)	$	(34,758	)	$	165,459		$	(12,100	)	$	340,567
	Common Stock				Additional Paid-In		Treasury Stock						Accumulated			Accumulated Other Comprehensive
	Shares		Amounts		Capital		Shares			Amounts			Earnings			Income (Loss)			Total
Balance at March 31, 2022		20,622,565	$	206	$	217,605		(1,302,143	)	$	(24,429	)	$	201,834		$	57		$	395,273
Comprehensive loss:
Net income		—		—		—		—			—			6,132			—			6,132
Other comprehensive    loss:
Change in unrealized    gains on debt    securities, net of tax		—		—		—		—			—			—			(8,931	)		(8,931	)
Comprehensive loss:																				(2,799	)
Common stock issued		53,909		1		1,969		—			—			—			—			1,970
Purchase of treasury stock		—		—		—		(77,699	)		(3,642	)		—			—			(3,642	)
Share-based compensation		—		—		170		—			—			—			—			170
Dividends to shareholders		—		—		—		—			—			(5,983	)		—			(5,983	)
Balance at June 30, 2022		20,676,474	$	207	$	219,744		(1,379,842	)	$	(28,071	)	$	201,983		$	(8,874	)	$	384,989

See accompanying notes.

7

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Six Months Ended June 30, 2023 and 2022

(in thousands, except share data)

(unaudited)

Common Stock		Additional Paid-In	Treasury Stock	Accumulated	Accumulated Other Comprehensive
Shares	Amounts