10-Q 1 amsf-20240331.htm 10-Q 10-Q
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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 MARCH 31, 2024

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 April 19, 2024, there were 19,135,008 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

20

 

Item 3

Quantitative and Qualitative Disclosures About Market Risk

24

 

Item 4

Controls and Procedures

25

PART II - OTHER INFORMATION

 

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

26

 

 

 

 

Item 5

Other Information

26

 

 

 

 

Item 6

Exhibits

27

 

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, fluctuating asset values and global health pandemics;
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;
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, 2023. 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)

 

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

Fixed maturity securities—held-to-maturity, at amortized cost net of allowance
   for credit losses of $
165 and $182 in 2024 and 2023, respectively,
   (fair value $
461,681 and $473,092 in 2024 and 2023, respectively)

 

$

475,322

 

 

$

483,575

 

Fixed maturity securities—available-for-sale, at fair value
   (amortized cost $
301,691, allowance for credit losses of $0 in 2024
   and amortized cost $
326,171, allowance for credit losses of $0 in 2023)

 

 

290,673

 

 

 

317,064

 

Equity securities, at fair value
   (cost $
44,045 and $44,046 in 2024 and 2023, respectively)

 

 

61,923

 

 

 

57,147

 

Short-term investments

 

 

38,641

 

 

 

 

Total investments

 

 

866,559

 

 

 

857,786

 

Cash and cash equivalents

 

 

33,375

 

 

 

38,682

 

Amounts recoverable from reinsurers
   (net of allowance for credit losses of $
309 and $360 in 2024 and 2023, respectively)

 

 

127,503

 

 

 

129,963

 

Premiums receivable
   (net of allowance for credit losses of $
4,535 and $4,674 in 2024 and 2023, respectively)

 

 

143,987

 

 

 

132,861

 

Deferred income taxes

 

 

21,183

 

 

 

20,403

 

Accrued interest receivable

 

 

8,250

 

 

 

8,274

 

Property and equipment, net

 

 

6,767

 

 

 

6,349

 

Deferred policy acquisition costs

 

 

18,994

 

 

 

17,975

 

Federal income tax recoverable

 

 

 

 

 

1,781

 

Other assets

 

 

16,525

 

 

 

15,088

 

Total assets

 

$

1,243,143

 

 

$

1,229,162

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Reserves for loss and loss adjustment expenses

 

$

668,059

 

 

$

673,994

 

Unearned premiums

 

 

124,288

 

 

 

116,585

 

Amounts held for others

 

 

55,387

 

 

 

53,694

 

Policyholder deposits

 

 

34,311

 

 

 

34,522

 

Insurance-related assessments

 

 

15,624

 

 

 

16,896

 

Federal income tax payable

 

 

2,360

 

 

 

 

Accounts payable and other liabilities

 

 

39,875

 

 

 

41,020

 

Payable for investments purchased

 

 

2,145

 

 

 

 

Total liabilities

 

 

942,049

 

 

 

936,711

 

Shareholders’ equity:

 

 

 

 

 

 

Common stock: voting—$0.01 par value authorized shares—50,000,000
   in 2024 and 2023;
20,704,448 shares issued in 2024 and 2023;
   and
19,135,008 shares outstanding in 2024 and 2023

 

 

207

 

 

 

207

 

Additional paid-in capital

 

 

222,443

 

 

 

222,078

 

Treasury stock, at cost (1,569,440 shares in 2024 and 2023)

 

 

(36,929

)

 

 

(36,929

)

Accumulated earnings

 

 

124,113

 

 

 

114,289

 

Accumulated other comprehensive loss, net

 

 

(8,740

)

 

 

(7,194

)

Total shareholders’ equity

 

 

301,094

 

 

 

292,451

 

Total liabilities and shareholders’ equity

 

$

1,243,143

 

 

$

1,229,162

 

 

See accompanying notes.

4


 

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

Revenues

 

 

 

 

 

 

Gross premiums written

 

$

80,074

 

 

$

82,487

 

Ceded premiums written

 

 

(3,926

)

 

 

(4,179

)

Net premiums written

 

$

76,148

 

 

$

78,308

 

Net premiums earned

 

$

68,446

 

 

$

69,181

 

Net investment income

 

 

7,366

 

 

 

7,433

 

Net realized gains (losses) on investments

 

 

(222

)

 

 

258

 

Net unrealized gains on equity securities

 

 

4,776

 

 

 

1,369

 

Fee and other income

 

 

123

 

 

 

197

 

Total revenues

 

 

80,489

 

 

 

78,438

 

Expenses

 

 

 

 

 

 

Loss and loss adjustment expenses incurred

 

 

39,991

 

 

 

39,009

 

Underwriting and certain other operating costs

 

 

5,311

 

 

 

5,156

 

Commissions

 

 

5,882

 

 

 

5,803

 

Salaries and benefits

 

 

7,505

 

 

 

6,023

 

Policyholder dividends

 

 

1,072

 

 

 

931

 

Provision for investment related credit loss benefit

 

 

(17

)

 

 

(19

)

Total expenses

 

 

59,744

 

 

 

56,903

 

Income before income taxes

 

 

20,745

 

 

 

21,535

 

Income tax expense

 

 

3,820

 

 

 

4,196

 

Net income

 

$

16,925

 

 

$

17,339

 

Earnings per share

 

 

 

 

 

 

Basic

 

$

0.89

 

 

$

0.91

 

Diluted

 

$

0.88

 

 

$

0.90

 

Shares used in computing earnings per share

 

 

 

 

 

 

Basic

 

 

19,122,168

 

 

 

19,131,356

 

Diluted

 

 

19,211,282

 

 

 

19,235,411

 

Cash dividends declared per common share

 

$

0.37

 

 

$

0.34

 

 

See accompanying notes.

5


 

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

Net income

 

$

16,925

 

 

$

17,339

 

Other comprehensive income:

 

 

 

 

 

 

Unrealized gain (loss) on debt securities, net of tax

 

 

(1,546

)

 

 

4,344

 

Comprehensive income

 

$

15,379

 

 

$

21,683

 

 

See accompanying notes.

6


 

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Three Months Ended March 31, 2024 and 2023

(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, 2023

 

 

20,704,448

 

 

$

207

 

 

$

222,078

 

 

 

(1,569,440

)

 

$

(36,929

)

 

$

114,289

 

 

$

(7,194

)

 

$

292,451

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,925

 

 

 

 

 

 

16,925

 

Other comprehensive
   income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized
   losses on debt
   securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,546

)

 

 

(1,546

)

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,379

 

Share-based compensation

 

 

 

 

 

 

 

 

365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

365

 

Dividends to shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,101

)

 

 

 

 

 

(7,101

)

Balance at March 31, 2024

 

 

20,704,448

 

 

$

207

 

 

$

222,443

 

 

 

(1,569,440

)

 

$

(36,929

)

 

$

124,113

 

 

$

(8,740

)

 

$

301,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17,339

 

 

 

 

 

 

17,339

 

Other comprehensive
   income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized
   losses on debt
   securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,344

 

 

 

4,344

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,683

 

Common stock issued

 

 

(1,486

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

257

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

257

 

Dividends to shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,517

)

 

 

 

 

 

(6,517

)

Balance at March 31, 2023

 

 

20,677,086

 

 

$

207

 

 

$

220,556

 

 

 

(1,522,699

)

 

$

(34,758

)

 

$

156,334

 

 

$

(9,484

)

 

$

332,855

 

 

See accompanying notes.

 

7


 

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Operating activities

 

 

 

 

 

 

Net income

 

$

16,925

 

 

$

17,339

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation

 

 

328

 

 

 

350

 

Net amortization of investments

 

 

519

 

 

 

1,091

 

Change in investment related allowance for credit losses

 

 

(17

)

 

 

(19

)

Deferred income taxes

 

 

(369

)

 

 

(19

)

Net realized (gains) losses on investments

 

 

222

 

 

 

(258

)

Net unrealized gains on equity securities

 

 

(4,776

)

 

 

(1,369

)

Share-based compensation

 

 

688

 

 

 

216

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Premiums receivable, net

 

 

(13,314

)

 

 

(15,338

)

Accrued interest receivable

 

 

24

 

 

 

(210

)

Deferred policy acquisition costs

 

 

(1,019

)

 

 

(1,228

)

Other assets

 

 

(724

)

 

 

320

 

Reserves for loss and loss adjustment expenses

 

 

(5,935

)

 

 

(9,385

)

Unearned premiums

 

 

7,703

 

 

 

9,127

 

Reinsurance balances

 

 

2,496

 

 

 

7,249

 

Amounts held for others and policyholder deposits

 

 

1,482

 

 

 

759

 

Federal income taxes payable/recoverable

 

 

4,141

 

 

 

3,987

 

Accounts payable and other liabilities

 

 

(868

)

 

 

854

 

Net cash provided by operating activities

 

 

7,506

 

 

 

13,466

 

Investing activities

 

 

 

 

 

 

Purchases of investments held-to-maturity

 

 

(3,320

)

 

 

(2,638

)

Purchases of investments available-for-sale

 

 

 

 

 

(27,243

)

Purchases of short-term investments

 

 

(38,559

)

 

 

(21,358

)

Proceeds from maturities of investments held-to-maturity

 

 

12,692

 

 

 

10,932

 

Proceeds from sales and maturities of investments available-for-sale

 

 

24,216

 

 

 

8,705

 

Proceeds from sales of equity securities

 

 

 

 

 

262

 

Proceeds from sales and maturities of short-term investments

 

 

 

 

 

4,175

 

Purchases of property and equipment

 

 

(746

)

 

 

(32

)

Net cash used in investing activities

 

 

(5,717

)

 

 

(27,197

)

Financing activities

 

 

 

 

 

 

Finance lease purchases

 

 

(21

)

 

 

(23

)

Dividends to shareholders

 

 

(7,075

)

 

 

(6,505

)

Net cash used in financing activities

 

 

(7,096

)

 

 

(6,528

)

Change in cash and cash equivalents

 

 

(5,307

)

 

 

(20,259

)

Cash and cash equivalents at beginning of period

 

 

38,682

 

 

 

61,469

 

Cash and cash equivalents at end of period

 

$

33,375

 

 

$

41,210

 

 

See accompanying notes.

8


 

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 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, agriculture, manufacturing, telecommunications, and maritime. Assets and revenues of AIIC and its subsidiaries represent at least 95% of comparable consolidated amounts of the Company for each of the three months ended March 31, 2024 and 2023.

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, 2023.

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

The Company has not adopted any new accounting guidance in 2024.

Prospective Accounting Guidance

All issued but not yet effective accounting and reporting standards as of March 31, 2024 are either not applicable to the Company or are not expected to have a material impact on the Company.

 

Note 2. Restricted Stock, Restricted Stock Units, and Stock Options

As of March 31, 2024, the Company has three equity incentive plans: the AMERISAFE Non-Employee Director Restricted Stock Plan (the Restricted Stock Plan), the AMERISAFE 2012 Equity and Incentive Compensation Plan (the 2012 Incentive Plan) and the 2022 Equity and Incentive Compensation Plan (the 2022 Incentive Plan). In connection with the approval of the 2022 Incentive Plan by the Company’s shareholders at the annual meeting of shareholders in June 2022, no further grants will be made under the 2012 Incentive Plan. All grants made under the 2012 Incentive Plan will continue in effect, subject to the terms and conditions of the 2012 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, 2023 for additional information regarding the Company’s incentive plans.

9


 

During the three months ended March 31, 2024, the Company awarded 10,384 restricted stock units to officers. The market value of these shares totaled $0.5 million. During the three months ended March 31, 2023, the Company awarded 9,064 restricted stock units to officers. The market value of these shares totaled $0.5 million.

The Company had no stock options outstanding as of March 31, 2024.

The Company recognized share-based compensation expense of $0.7 million in the quarter ended March 31, 2024 and $0.2 million in the same period in 2023.

 

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 restricted stock or RSUs become vested.

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

 

 

(in thousands, except share and per share
amounts)

 

Basic EPS:

 

 

 

 

 

 

Net income

 

$

16,925

 

 

$

17,339

 

Basic weighted average common shares

 

 

19,122,168

 

 

 

19,131,356

 

Basic earnings per common share

 

$

0.89

 

 

$

0.91

 

Diluted EPS:

 

 

 

 

 

 

Net income

 

$

16,925

 

 

$

17,339

 

Diluted weighted average common shares:

 

 

 

 

 

 

Weighted average common shares

 

 

19,122,168

 

 

 

19,131,356

 

Restricted stock and RSUs

 

 

89,114

 

 

 

104,055

 

Diluted weighted average common shares

 

 

19,211,282

 

 

 

19,235,411

 

Diluted earnings per common share

 

$

0.88

 

 

$

0.90

 

 

Note 4. Investments

The amortized cost, allowance for credit losses, carrying amount, gross unrecognized gains and losses, and the fair value of those investments classified as held-to-maturity at March 31, 2024 are summarized as follows:

 

 

 

Amortized
Cost

 

 

Allowance for Credit Losses

 

 

Carrying
Amount

 

 

Gross
Unrecognized
Gains

 

 

Gross
Unrecognized
Losses

 

 

Fair
Value

 

 

 

(in thousands)

 

States and political subdivisions

 

$

412,900

 

 

$

(37

)

 

$

412,863

 

 

$

2,804

 

 

$

(13,871

)

 

$

401,796

 

Corporate bonds

 

 

48,164

 

 

 

(126

)

 

 

48,038

 

 

 

 

 

 

(2,078

)

 

 

45,960

 

U.S. agency-based mortgage-backed securities

 

 

3,183

 

 

 

 

 

 

3,183

 

 

 

19

 

 

 

(150

)

 

 

3,052

 

U.S. Treasury securities and obligations
   of U.S. government agencies

 

 

11,209

 

 

 

 

 

 

11,209

 

 

 

14

 

 

 

(379

)

 

 

10,844

 

Asset-backed securities

 

 

31

 

 

 

(2

)

 

 

29

 

 

 

 

 

 

 

 

 

29

 

Totals

 

$

475,487

 

 

$

(165

)

 

$

475,322

 

 

$

2,837

 

 

$

(16,478

)

 

$

461,681

 

 

10


 

The amortized cost, gross unrealized gains and losses, fair value, and the allowance for credit losses of those investments classified as available-for-sale at March 31, 2024 are summarized as follows:

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Allowance for
Credit Losses

 

 

 

(in thousands)

 

States and political subdivisions

 

$

122,545

 

 

$

260

 

 

$

(7,013

)

 

$

115,792

 

 

$

 

Corporate bonds

 

 

159,284

 

 

 

1,509

 

 

 

(4,042

)

 

 

156,751

 

 

 

 

U.S. agency-based mortgage-backed securities

 

 

5,032

 

 

 

 

 

 

(502

)

 

 

4,530

 

 

 

 

U.S. Treasury securities and obligations
   of U.S. government agencies

 

 

14,830

 

 

 

 

 

 

(1,230

)

 

 

13,600

 

 

 

 

Totals

 

$

301,691

 

 

$

1,769

 

 

$

(12,787

)

 

$

290,673

 

 

$

 

 

The cost, gross unrealized gains and losses, and the fair value of equity securities at March 31, 2024 are summarized as follows:

 

 

 

Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

 

(in thousands)

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic common stock

 

$

44,045

 

 

$

17,878

 

 

$

 

 

$

61,923

 

Total equity securities

 

$

44,045

 

 

$

17,878

 

 

$

 

 

$

61,923

 

 

The amortized cost, allowance for credit losses, carrying amount, gross unrecognized gains and losses, and the fair value of those investments classified as held-to-maturity at December 31, 2023 are summarized as follows:

 

 

 

Amortized
Cost

 

 

Allowance for Credit Losses

 

 

Carrying
Amount

 

 

Gross
Unrecognized
Gains

 

 

Gross
Unrecognized
Losses

 

 

Fair
Value

 

 

 

(in thousands)

 

States and political subdivisions

 

$

416,916

 

 

$

(38

)

 

$

416,878

 

 

$

4,166

 

 

$

(12,074

)

 

$

408,970

 

Corporate bonds

 

 

52,321

 

 

 

(142

)

 

 

52,179

 

 

 

 

 

 

(2,231

)

 

 

49,948

 

U.S. agency-based mortgage-backed securities

 

 

3,297

 

 

 

 

 

 

3,297

 

 

 

25

 

 

 

(123

)

 

 

3,199

 

U.S. Treasury securities and obligations
   of U.S. government agencies

 

 

11,186

 

 

 

 

 

 

11,186

 

 

 

26

 

 

 

(273

)

 

 

10,939

 

Asset-backed securities

 

 

37

 

 

 

(2

)

 

 

35

 

 

 

1

 

 

 

 

 

 

36

 

Totals

 

$

483,757

 

 

$

(182

)

 

$

483,575

 

 

$

4,218

 

 

$

(14,701

)

 

$

473,092

 

 

The amortized cost, gross unrealized gains and losses, fair value, and the allowance for credit losses of those investments classified as available-for-sale at December 31, 2023 are summarized as follows:

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Allowance for
Credit Losses

 

 

 

(in thousands)

 

States and political subdivisions

 

$

138,031

 

 

$

583

 

 

$

(6,719

)

 

$

131,895

 

 

$

 

Corporate bonds

 

 

168,134

 

 

 

2,105

 

 

 

(3,486

)

 

 

166,753

 

 

 

 

U.S. agency-based mortgage-backed securities

 

 

5,190

 

 

 

 

 

 

(445

)

 

 

4,745

 

 

 

 

U.S. Treasury securities and obligations
   of U.S. government agencies

 

 

14,816

 

 

 

 

 

 

(1,145

)

 

 

13,671

 

 

 

 

Totals

 

$

326,171

 

 

$

2,688

 

 

$

(11,795

)

 

$

317,064

 

 

$

 

 

11


 

The cost, gross unrealized gains and losses, and the fair value of equity securities at December 31, 2023 are summarized as follows:

 

 

 

Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

 

(in thousands)

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic common stock

 

$

44,046

 

 

$

13,101

 

 

$

 

 

$

57,147

 

Total equity securities

 

$

44,046

 

 

$

13,101

 

 

$

 

 

$

57,147

 

 

A summary of the carrying amounts and fair value of investments in fixed maturity securities classified as held-to-maturity, by contractual maturity, is as follows:

 

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

Carrying
Amount

 

 

Fair
Value

 

 

Carrying
Amount

 

 

Fair
Value

 

 

 

(in thousands)

 

Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

Within one year

 

$

64,898

 

 

$

64,232

 

 

$

64,129

 

 

$

63,703

 

After one year through five years

 

 

126,220

 

 

 

120,555

 

 

 

136,854

 

 

 

131,396

 

After five years through ten years

 

 

116,791

 

 

 

111,569

 

 

 

114,990

 

 

 

110,814

 

After ten years

 

 

164,201

 

 

 

162,244

 

 

 

164,270

 

 

 

163,944

 

U.S. agency-based mortgage-backed securities

 

 

3,183

 

 

 

3,052

 

 

 

3,297

 

 

 

3,199

 

Asset-backed securities

 

 

29

 

 

 

29

 

 

 

35

 

 

 

36

 

Totals

 

$

475,322

 

 

$

461,681

 

 

$

483,575

 

 

$

473,092

 

 

 

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

 

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

Amortized
Cost

 

 

Fair
Value

 

 

Amortized
Cost

 

 

Fair
Value

 

 

 

(in thousands)