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AMERISAFE (AMSF) Shares Jump 4.8% Since Q1 Earnings Beat
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AMERISAFE, Inc. (AMSF - Free Report) shares have gained 4.8% since it reported first-quarter 2023 results on Apr 26. The quarterly results gained momentum due to a significant increase in premiums, fees and other income and net investment income. However, the positives were partially offset by deteriorating underwriting results and an elevated expense level.
AMSF reported first-quarter 2023 adjusted earnings of 83 cents per share, which outpaced the Zacks Consensus Estimate by 25.8% and our estimate of 56 cents per share. The bottom line improved 1.2% year over year.
Operating revenues improved 4.1% year over year to $76.8 million. The top line beat the consensus mark by 3.2% and was higher than our estimate of $71.4 million.
Net premiums earned by AMERISAFE amounted to $69.2 million, which increased 2.4% year over year in the first quarter. The growth was aided by positive audit premiums, despite rate declines. The figure beat the Zacks Consensus Estimate by 4.6% and our estimate of $64.7 million.
Net investment income of $7.4 million increased 21.6% year over year due to growing yields on fixed-income and cash securities. The figure beat the consensus mark by 2.6% and our estimate of $6.6 million.
Fees and other income climbed 74.3% year over year to $0.2 million in the quarter under review, beating the Zacks Consensus Estimate by 55.5% and our estimate of $0.1 million.
AMERISAFE’s pre-tax underwriting profit of $12.3 million declined 9.3% year over year.
Total expenses increased 5.1% year over year to $56.9 million in the first quarter, attributable to higher loss and loss adjustment expenses incurred and underwriting and other operating costs. However, the figure was lower than our estimate of $58.1 million.
The net combined ratio of 82.2% deteriorated 210 basis points (bps) year over year. The figure was lower than the consensus mark of 89% and our estimate of 89.8%.
Financial Update (as of Mar 31, 2023)
AMERISAFE exited the first quarter with cash and cash equivalents of $41.2 million, which decreased from $61.5 million at 2022-end.
Total assets of $1,288.3 million increased from $1,269.3 million at 2022-end.
Shareholders' equity rose 4.9% from 2022-end to $332.9 million.
Book value per share tumbled 15.1% year over year to $17.38 in the first quarter.
Return on average equity improved 390 bps year over year to 21.3% in the quarter under review.
Dividend Update
On Apr 25, 2023, its board of directors declared a quarterly cash dividend of 34 cents per share. The dividend will be paid out on Jun 23, 2023, to its shareholders of record as of Jun 16, 2023.
The Travelers Companies, Inc. (TRV - Free Report) reported first-quarter 2023 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41.
However, the bottom line decreased 2.6% year over year. The year-over-year decline reflects higher catastrophe losses and lower net favorable prior-year reserve developments. However, a higher underlying underwriting gain and higher net investment income partially offset the same.
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 and our estimate of $1.50. The bottom line declined 20.7% year over year.
Net premiums written were $16.1 billion in the quarter, rising 22% from $13.2 billion a year ago and beating our estimate of $14.6 billion. Net premiums earned grew 15% to $13.5 billion, beating our estimate of $12.6 billion.
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2023 operating income of $1 per share missed the Zacks Consensus Estimate by about 16%. The bottom line declined 9.1% year over year and missed our estimate of $1.19.
The insurer benefited from higher premiums, driven by strong rate increases in nearly all lines of business, exposure growth fueling continued strong underwriting performance, and a surge in investment income.
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AMERISAFE (AMSF) Shares Jump 4.8% Since Q1 Earnings Beat
AMERISAFE, Inc. (AMSF - Free Report) shares have gained 4.8% since it reported first-quarter 2023 results on Apr 26. The quarterly results gained momentum due to a significant increase in premiums, fees and other income and net investment income. However, the positives were partially offset by deteriorating underwriting results and an elevated expense level.
AMSF reported first-quarter 2023 adjusted earnings of 83 cents per share, which outpaced the Zacks Consensus Estimate by 25.8% and our estimate of 56 cents per share. The bottom line improved 1.2% year over year.
Operating revenues improved 4.1% year over year to $76.8 million. The top line beat the consensus mark by 3.2% and was higher than our estimate of $71.4 million.
AMERISAFE, Inc. Price, Consensus and EPS Surprise
AMERISAFE, Inc. price-consensus-eps-surprise-chart | AMERISAFE, Inc. Quote
Q1 Performance
Net premiums earned by AMERISAFE amounted to $69.2 million, which increased 2.4% year over year in the first quarter. The growth was aided by positive audit premiums, despite rate declines. The figure beat the Zacks Consensus Estimate by 4.6% and our estimate of $64.7 million.
Net investment income of $7.4 million increased 21.6% year over year due to growing yields on fixed-income and cash securities. The figure beat the consensus mark by 2.6% and our estimate of $6.6 million.
Fees and other income climbed 74.3% year over year to $0.2 million in the quarter under review, beating the Zacks Consensus Estimate by 55.5% and our estimate of $0.1 million.
AMERISAFE’s pre-tax underwriting profit of $12.3 million declined 9.3% year over year.
Total expenses increased 5.1% year over year to $56.9 million in the first quarter, attributable to higher loss and loss adjustment expenses incurred and underwriting and other operating costs. However, the figure was lower than our estimate of $58.1 million.
The net combined ratio of 82.2% deteriorated 210 basis points (bps) year over year. The figure was lower than the consensus mark of 89% and our estimate of 89.8%.
Financial Update (as of Mar 31, 2023)
AMERISAFE exited the first quarter with cash and cash equivalents of $41.2 million, which decreased from $61.5 million at 2022-end.
Total assets of $1,288.3 million increased from $1,269.3 million at 2022-end.
Shareholders' equity rose 4.9% from 2022-end to $332.9 million.
Book value per share tumbled 15.1% year over year to $17.38 in the first quarter.
Return on average equity improved 390 bps year over year to 21.3% in the quarter under review.
Dividend Update
On Apr 25, 2023, its board of directors declared a quarterly cash dividend of 34 cents per share. The dividend will be paid out on Jun 23, 2023, to its shareholders of record as of Jun 16, 2023.
Zacks Rank
AMERISAFE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Other Finance Sector Release
The Travelers Companies, Inc. (TRV - Free Report) reported first-quarter 2023 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41.
However, the bottom line decreased 2.6% year over year. The year-over-year decline reflects higher catastrophe losses and lower net favorable prior-year reserve developments. However, a higher underlying underwriting gain and higher net investment income partially offset the same.
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 and our estimate of $1.50. The bottom line declined 20.7% year over year.
Net premiums written were $16.1 billion in the quarter, rising 22% from $13.2 billion a year ago and beating our estimate of $14.6 billion. Net premiums earned grew 15% to $13.5 billion, beating our estimate of $12.6 billion.
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2023 operating income of $1 per share missed the Zacks Consensus Estimate by about 16%. The bottom line declined 9.1% year over year and missed our estimate of $1.19.
The insurer benefited from higher premiums, driven by strong rate increases in nearly all lines of business, exposure growth fueling continued strong underwriting performance, and a surge in investment income.