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AMERISAFE Announces 2012 Fourth Quarter and Year-End Results



AMERISAFE Announces 2012 Fourth Quarter and Year-End Results

Initiates Quarterly Cash Dividend

DERIDDER, La., Feb. 27, 2013 (GLOBE NEWSWIRE) -- AMERISAFE, Inc.
(Nasdaq:AMSF), a specialty provider of hazardous workers' compensation
insurance, today announced results for the fourth quarter and year ended
December 31, 2012.

                       Three Months Ended         Twelve Months Ended
                       December 31,               December 31,
                       2012     2011     % Change 2012      2011      % Change
                       (in thousands, except per share data)
Net premiums earned    $ 78,741 $ 66,211  18.9%   $ 290,689 $ 251,015  15.8%
Net investment income   6,698    6,702    (0.1)%   27,018    26,340    2.6%
Net realized gains on   66       1,468    (95.5)%  2,979     2,228     33.7%
investments (pre-tax)
Net income              9,226    8,073    14.3%    29,353    24,181    21.4%
Diluted earnings per   $ 0.50   $ 0.44    13.6%   $ 1.58    $ 1.29     22.5%
share
Operating net income    9,183    5,943    54.5%    27,417    21,291    28.8%
Operating earnings per $ 0.49   $ 0.32    53.1%   $ 1.48    $ 1.14     29.8%
share
Book value per share   $ 20.88  $ 19.25   8.5%    $ 20.88   $ 19.25    8.5%
Net combined ratio      92.6%    98.4%             97.5%     100.4%    
Return on average       9.8%     9.4%              8.0%      7.1%      
equity

Commenting on these results, Allen Bradley, AMERISAFE's Chairman and Chief
Executive Officer, stated, "The workers' compensation marketplace continues to
harden. Loss costs and rate increases, coupled with a lessened underwriting
appetite for workers' compensation accounts by many carriers, continues to
provide AMERISAFE with the opportunity to increase premium volume with higher
pricing and better expected margins."

Quarterly Cash Dividend

The Company's Board of Directors declared its first quarterly cash dividend of
$0.08 per share, payable on March 28, 2013 to shareholders of record as of
March 14, 2013. The Board intends to consider the payment of a regular cash
dividend each calendar quarter.   On an annualized basis, the cash dividend is
currently expected to be $0.32 per share.

Insurance Results

                         Three Months Ended        Twelve Months Ended
                          December 31,              December 31,
                         2012     2011     %       2012      2011      %
                                           Change                      Change
                         (in thousands)
                                                                        
Gross premiums written   $ 81,140 $ 62,128  30.6%   $328,823  $272,101 20.8%
Net premiums earned       78,741   66,211   18.9%   290,689   251,015  15.8%
Loss and loss adjustment  57,489   49,627  15.8%    219,903  189,706   15.9%
expenses incurred
Underwriting and certain
other operating costs,    14,876   15,017   (0.9)%  61,433    60,825    1.0%
commissions and salaries
and benefits
Policyholder dividends   544       474      14.8%   2,203     1,464     50.5%
Underwriting profit      5,832    1,093     433.6% 7,150      (980)     829.6%
(loss) (pre-tax)
                                                                        
Insurance Ratios:                                                       
Current accident year     76.5%    78.2%            76.5%     78.2%     
loss ratio
Prior accident year loss  (3.5)%   (3.2)%           (0.9)%    (2.6)%    
ratio
Net loss ratio            73.0%    75.0%            75.6%     75.6%     
Net underwriting expense 18.9%    22.7%            21.1%     24.2%      
ratio
Net dividend ratio       0.7%     0.7%             0.8%      0.6%       
Net combined ratio       92.6%    98.4%            97.5%     100.4%     

  * Voluntary premiums written increased 25.0% in the quarter and 14.9% for
    the year ended December 31, 2012 compared to the same periods in 2011.
    Additionally, payroll audits and related premium adjustments for policies
    written in previous periods increased premiums $7.9 million in the fourth
    quarter and $20.9 million in the year ended December 31, 2012. In 2011,
    these premium adjustments increased premium $3.8 million in the fourth
    quarter and $5.9 million for the year ended December 31.
     
  * The current accident year loss ratio for the fourth quarter was 76.5%.
    During the quarter the Company experienced $2.7 million of favorable prior
    year development, primarily attributable to accident year 2008. In total,
    prior accident year development for year ended December 31, 2012 was a
    favorable $2.5 million, compared to a favorable $6.6 million for the same
    period in 2011.
     
  * For the year ended December 31, 2012, the underwriting expense ratio was
    3.1 percentage points lower than the prior year. The primary contributors
    to the decrease were efficiencies gained by maintaining general operating
    costs at a level equivalent to the prior year as earned premium increased
    and recognition of higher experience rated commissions. Level general
    operating costs resulted in a 1.6 percentage point decrease in the
    underwriting expense ratio in 2012. Our experience rated commissions
    offset the expense ratio by 3.8 percentage points in the year ended
    December 31, 2012 compared to 2.3 percentage points in 2011.
     
  * The effective tax rate for the year ended December 31, 2012 was 21.0%
    compared to 11.6% in the same period in 2011. The increase was driven by
    tax‑exempt investment income reflecting a smaller percentage of pre-tax
    income in the year ended December 31, 2012 compared to the same period in
    2011. Also in 2011, there was a decrease in the effective rate from a
    change in the valuation allowance related to capital loss carry forwards.

Geoff Banta, President and Chief Operating Officer, noted, "We experienced
another quarter of premium growth with stronger pricing, while maintaining our
healthy policy retention levels. Additionally, our claims frequency for the
2012 accident year continued its downward trend and prior accident years
developed favorably. Overall, we are pleased with our fourth quarter
underwriting results."

Investment Results

                                 Three Months Ended  Twelve Months Ended
                                  December 31,        December 31,
                                 2012  2011  %       2012   2011   %
                                             Change                Change
                                 (in thousands)
Net investment income            $     $     (0.1)%  $      $       2.6%
                                 6,698 6,702         27,018 26,340
Net realized gains on            66    1,468 (95.5)% 2,979  2,228  33.7%
investments (pre-tax)
Pre-tax investment yield         3.0%  3.2%          3.1%   3.1%    
Tax equivalent yield (1)         4.3%  4.6%          4.3%   4.6%    
________________________________                                    
(1) The tax equivalent yield is calculated using the effective interest              
rate and a 35% marginal tax rate.

  * As of December 31, 2012, the carrying value of AMERISAFE's investment
    portfolio, including cash and cash equivalents, was $900.8 million and the
    fair value of the portfolio was $944.9 million.

Supplemental Information

During the quarter, no shares were repurchased under the share repurchase
plan. Since the beginning 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. On October 30, 2012, the Board of Directors extended
the share repurchase program through December 31, 2013.

                     Three Months Ended        Twelve Months Ended
                      December 31,              December 31,
                     2012         2011         2012        2011
                     (in thousands, except share and per share data)
Net income           $ 9,226      $ 8,073      $ 29,353    $ 24,181
Less: Net realized   66           1,468        2,979       2,228
capital gains
Tax effect of gains   (23)         (514)        (1,043)     (780)
(1)
Valuation allowance   —            1,176        —           1,442
(1)
Operating net income  9,183        5,943        27,417      21,291
(2)
                                                            
Average
shareholders' equity $ 376,681    $ 344,820    $ 365,330   $ 339,079
(3)
Less: Average other
comprehensive         3,547        2,229        2,597       1,240
income.
Adjusted average     373,134      342,591       362,733     337,839
shareholders' equity
Diluted weighted
average common       18,602,759   18,492,088   18,575,133  18,700,982
shares
                                                            
Return on average     9.8%         9.4%         8.0%        7.1%
equity (4)
Operating return on   9.8%         6.9%         7.6%        6.3%
average equity (2)
Diluted earnings per  $ 0.50       $ 0.44      $ 1.58      $ 1.29
common share
Operating earnings    $ 0.49       $ 0.32      $ 1.48      $ 1.14
per common share (2)
                                                            
(1) The tax effect
of net realized
capital gains is
calculated assuming
an annual tax rate                                          
of 35% plus the
change in valuation
allowance for
deferred taxes.
(2) Operating net income, operating return on average adjusted 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 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 February 28, 2013, at 10:30 a.m.
Eastern Time, to discuss the fourth quarter results 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 March 7, 2013. To access the
replay, dial 855-859-2056 or 404-537-3406 and use the pass code 94677394#.

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, trucking and agriculture. AMERISAFE actively markets
workers' compensation insurance in 35 states and the District of Columbia.

The AMERISAFE, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=9767

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, 2011. 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 Ended  Twelve Months Ended
                                     December 31,         December 31,
                                     2012      2011      2012       2011
                                     (unaudited)
Revenues:                                                            
Gross premiums written                $ 81,140  $ 62,128  $ 328,823  $ 272,101
Ceded premiums written                (4,398)   (3,394)    (16,305)   (13,881)
 Net premiums written                 $ 76,742  $ 58,734  $312,518   $258,220
                                                                     
Net premiums earned                   $ 78,741  $ 66,211  $ 290,689  $ 251,015
Net investment income                 6,698     6,702     27,018     26,340
Net realized gains on investments     66        1,468     2,979      2,228
Fee and other income                  78        529       562        1,080
 Total revenues                       85,583    74,910    321,248    280,663
                                                                     
Expenses:                                                            
Loss and loss adjustment expenses     57,489    49,627    219,903    189,706
incurred
Underwriting and other operating      14,876    15,017    61,433     60,825
costs
Interest expense                      —         275       566        1,311
Policyholder dividends                544       474       2,203      1,464
 Total expenses                       72,909    65,393    284,105    253,306
                                                                     
Income before taxes                   12,674    9,517     37,143     27,357
Income tax expense                    3,448     1,444     7,790      3,176
 Net income                           $ 9,226   $ 8,073   $ 29,353   $ 24,181

                                                                         
                                                                         
AMERISAFE, INC. AND SUBSIDIARIES
Consolidated Statements of Income (cont.)                                     
(in thousands, except share and per share amounts)
                                                                         
                           Three Months Ended    Twelve Months Ended     
                           December 31,          December 31,
                           2012       2011       2012       2011
                           (unaudited)                                   
Basic EPS:                                                              
Net income                 $ 9,226    $ 8,073    $  29,353  $  24,181   
                                                                        
Basic weighted average     18,200,394 18,082,974 18,166,175 18,250,173  
common shares
Basic earnings per share    $ 0.51     $ 0.45     $ 1.62     $ 1.32     
                                                                        
Diluted EPS:                                                            
Net income                  $ 9,226    $ 8,073   $ 29,353   $ 24,181    
                                                                        
Diluted weighted average                                                
common shares:
 Weighted average common   18,200,394 18,082,974 18,166,175 18,250,173  
shares
 Stock options             392,724    405,120     390,829    439,737    
 Restricted stock           3,995      3,994      11,895     11,072     
 Long-term incentive stock  5,646      —          6,234      —          
 Diluted weighted average  18,602,759 18,492,088 18,575,133 18,700,982  
common shares
                                                                        
Diluted earnings per       $ 0.50      $   0.44   $ 1.58    $ 1.29      
common share
                                                                        
                                                                        

AMERISAFE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets                                                 
(in thousands)
                                                             
                                               December 31, December 31,
                                               2012         2011
                                               (unaudited)   
Assets                                                       
Investments                                     $ 808,116    $ 805,974
Cash and cash equivalents                       92,676       45,536
Amounts recoverable from reinsurers              101,352      96,212
Premiums receivable, net                        141,950      121,223
Deferred income taxes                           29,521       30,048
Deferred policy acquisition costs               18,419       16,578
Other assets                                    28,912       28,402
                                                $ 1,220,946  $ 1,143,973
                                                             
Liabilities and shareholders' equity                         
Liabilities:                                                 
Reserves for loss and loss adjustment expenses  $ 570,450    $ 538,214
Unearned premiums                               140,528      118,699
Insurance-related assessments                   22,244       19,071
Subordinated debt securities                    —            25,780
Other liabilities                               106,502      92,772
                                                             
Total shareholders' equity                      381,222      349,437
Total liabilities and shareholders' equity      $ 1,220,946  $ 1,143,973

CONTACT: G. Janelle Frost, EVP & CFO
         AMERISAFE, Inc.
         337-463-9052

AMERISAFE, Inc. Logo
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