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 SEPTEMBER 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 October 20, 2023, there were 19,181,749 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	27
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)

	September 30, 2023			December 31, 2022
	(unaudited)
Assets
Investments:
Fixed maturity securities—held-to-maturity, at amortized cost net of allowance    for credit losses of $188 and $239 in 2023 and 2022, respectively,    (fair value $452,019 and $468,144 in 2023 and 2022, respectively)	$	487,166		$	491,688
Fixed maturity securities—available-for-sale, at fair value    (amortized cost $331,798, allowance for credit losses of $0 in 2023    and amortized cost $338,593, allowance for credit losses of $0 in 2022)		306,040			321,121
Equity securities, at fair value    (cost $46,944 and $50,185 in 2023 and 2022, respectively)		54,926			62,058
Short-term investments		40,887			14,120
Total investments		889,019			888,987
Cash and cash equivalents		59,249			61,469
Amounts recoverable from reinsurers    (net of allowance for credit losses of $343 and $372 in 2023 and 2022, respectively)		127,687			125,677
Premiums receivable    (net of allowance for credit losses of $4,643 and $4,852 in 2023 and 2022, respectively)		144,445			121,713
Deferred income taxes		25,683			22,794
Accrued interest receivable		8,548			8,428
Property and equipment, net		6,678			7,225
Deferred policy acquisition costs		18,796			17,401
Federal income tax recoverable		546			1,453
Other assets		15,985			14,132
Total assets	$	1,296,636		$	1,269,279
Liabilities and shareholders’ equity
Liabilities:
Reserves for loss and loss adjustment expenses	$	684,348		$	696,037
Unearned premiums		126,338			114,976
Amounts held for others		52,013			48,811
Policyholder deposits		34,431			36,312
Insurance-related assessments		18,295			17,653
Accounts payable and other liabilities		41,579			38,058
Payable for investments purchased		3,749			—
Total liabilities		960,753			951,847
Shareholders’ equity:
Common stock: voting—$0.01 par value authorized shares—50,000,000    in 2023 and 2022; 20,707,148 and 20,678,572 shares issued; and 19,184,449    and 19,155,873 shares outstanding in 2023 and 2022, respectively		207			207
Additional paid-in capital		221,905			220,299
Treasury stock, at cost (1,522,699 shares in 2023 and 2022)		(34,758	)		(34,758	)
Accumulated earnings		168,892			145,512
Accumulated other comprehensive loss, net		(20,363	)		(13,828	)
Total shareholders’ equity		335,883			317,432
Total liabilities and shareholders’ equity	$	1,296,636		$	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						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Revenues
Gross premiums written	$	70,840		$	68,212		$	225,031		$	220,463
Ceded premiums written		(4,112	)		(2,553	)		(12,256	)		(7,837	)
Net premiums written	$	66,728		$	65,659		$	212,775		$	212,626
Net premiums earned	$	66,634		$	67,790		$	201,413		$	205,625
Net investment income		8,105			6,983			23,262			19,581
Net realized gains on investments		5,133			585			5,466			2,402
Net unrealized losses on equity securities		(7,309	)		(4,082	)		(3,892	)		(12,984	)
Fee and other income		77			104			488			352
Total revenues		72,640			71,380			226,737			214,976
Expenses
Loss and loss adjustment expenses incurred		37,154			37,725			111,808			115,792
Underwriting and certain other operating costs		9,494			7,426			22,077			19,100
Commissions		5,975			5,422			17,623			16,083
Salaries and benefits		6,902			6,737			19,625			19,428
Policyholder dividends		804			640			2,225			2,517
Provision for investment related credit loss expense (benefit)		(16	)		(21	)		(51	)		60
Total expenses		60,313			57,929			173,307			172,980
Income before income taxes		12,327			13,451			53,430			41,996
Income tax expense		2,366			2,090			10,503			7,172
Net income	$	9,961		$	11,361		$	42,927		$	34,824
Earnings per share
Basic	$	0.52		$	0.59		$	2.24		$	1.81
Diluted	$	0.52		$	0.59		$	2.23		$	1.80
Shares used in computing earnings per share
Basic		19,164,854			19,198,320			19,145,432			19,267,602
Diluted		19,223,588			19,269,346			19,217,606			19,340,898
Cash dividends declared per common share	$	0.34		$	0.31		$	1.02		$	0.93

See accompanying notes.

5

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Net income	$	9,961		$	11,361		$	42,927		$	34,824
Other comprehensive income:
Unrealized loss on debt securities, net of tax		(8,263	)		(11,090	)		(6,535	)		(33,501	)
Comprehensive income	$	1,698		$	271		$	36,392		$	1,323

See accompanying notes.

6

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Three Months Ended September 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 June 30, 2023		20,702,713	$	207	$	221,759			(1,522,699	)	$	(34,758	)	$	165,459		$	(12,100	)	$	340,567
Comprehensive income:
Net income		—		—		—			—			—			9,961			—			9,961
Other comprehensive    income:
Change in unrealized    losses on debt    securities, net of tax		—		—		—			—			—			—			(8,263	)		(8,263	)
Comprehensive income:																					1,698
Common stock issued		4,435		—		(165	)		—			—			—			—			(165	)
Share-based compensation		—		—		311			—			—			—			—			311
Dividends to shareholders		—		—		—			—			—			(6,528	)		—			(6,528	)
Balance at September 30, 2023		20,707,148	$	207	$	221,905			(1,522,699	)	$	(34,758	)	$	168,892		$	(20,363	)	$	335,883
	Common Stock				Additional Paid-In			Treasury Stock						Accumulated			Accumulated Other Comprehensive
	Shares		Amounts		Capital			Shares			Amounts			Earnings			Loss			Total
Balance at June 30, 2022		20,676,474	$	207	$	219,744			(1,379,842	)	$	(28,071	)	$	201,983		$	(8,874	)	$	384,989
Comprehensive income:
Net income		—		—		—			—			—			11,361			—			11,361
Other comprehensive    income:
Change in unrealized    losses on debt    securities, net of tax		—		—		—			—			—			—			(11,090	)		(11,090	)
Comprehensive income:																					271
Common stock issued		2,098		—		—			—			—			—			—			—
Purchase of treasury stock		—		—		—			(139,559	)		(6,535	)		—			—			(6,535	)
Share-based compensation		—		—		244			—			—			—			—			244
Dividends to shareholders		—		—		—			—			—			(5,950	)		—			(5,950	)
Balance at September 30, 2022		20,678,572	$	207	$	219,988			(1,519,401	)	$	(34,606	)	$	207,394		$	(19,964	)	$	373,019

See accompanying notes.

7

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Nine Months Ended September 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 December 31, 2022		20,678,572	$	207	$	220,299		(1,522,699	)	$	(34,758	)	$	145,512		$	(13,828	)	$	317,432
Comprehensive income:
Net income		—		—		—		—			—			42,927			—			42,927
Other comprehensive    income:
Change in unrealized    losses on debt    securities, net of tax		—		—		—		—			—			—			(6,535	)		(6,535	)
Comprehensive income:																				36,392
Common stock issued		28,576		—		779		—			—			—			—			779
Share-based compensation		—		—		827		—			—			—			—			827
Dividends to shareholders		—		—		—		—			—			(19,547	)		—			(19,547	)
Balance at September 30, 2023		20,707,148	$	207	$	221,905		(1,522,699	)	$	(34,758	)	$	168,892		$	(20,363	)	$	335,883
	Common Stock				Additional Paid-In		Treasury Stock						Accumulated			Accumulated Other Comprehensive
	Shares