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Amerisafe (AMSF) Earnings, Revenues Miss Estimates in Q2

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Amerisafe Inc.'s (AMSF - Free Report) second-quarter 2016 operating earnings per share of 85 cents missed the Zacks Consensus Estimate by 1.2%. Nonetheless, the bottom line inched up 1.2% year over year on the back of continued focus on disciplined underwriting.

Amerisafe Inc. (AMSF - Free Report) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

Quarter in Detail

Amerisafe’s total revenue declined 0.3% year over year to $97 million but missed the Zacks Consensus Estimate of $100 million. Net premiums written amounted to $100.7 million in the reported quarter, down 2.7% from the year-ago quarter.

Amerisafe’s insurance business reported a 2.6% decline in gross premiums written to $103.2 million. Net premiums earned were down 5.1% year over year to $90.7 million.

Net investment income, which represented nearly 6.3% of the total revenue, decreased 10% year over year to $6.2 million. The downside was attributable to a decline in the value of an investment in a limited partnership hedge fund.

Insurance loss adjustment expenses declined 14.2% year over year to $49 million. This was one of the primary factors behind the 8.6% year-over-year decrease in Amerisafe’s total expense to $72 million.

Underwriting profit jumped 14% year over year to $17.8 million. Also, net combined ratio improved 320 basis points to 80.4%.

Financial Update

Amerisafe exited the quarter with cash and cash equivalents worth $70.2 million, up 1% from year-end 2015. Total shareholders’ equity was $495.9 million as of Jun 30, 2016, up from $454 million at the end of 2015.

Operating return on equity was 13.7% in the quarter, up from 12.3% a year ago. Book value per share came in at $25.83, up 3.9% year over year.

AMERISAFE INC Price, Consensus and EPS Surprise

AMERISAFE INC Price, Consensus and EPS Surprise | AMERISAFE INC Quote

Dividend and Share Repurchase Update

During the quarter, no shares were bought back under the repurchase plan.  The company paid a dividend of 18 cents per share. On Jul 26, the board declared a quarterly dividend of 18 cents to be paid on Sep 23, 2016 to shareholders on record as of Sep 9, 2016.

Zacks Rank & Peer Performance

Currently, Amerisafe carries a Zacks Rank #3 (Hold). Among the other players in the insurance industry that have reported their earnings so far, the bottom line at The Travelers Companies, Inc. (TRV - Free Report) and First American Financial Corporation (FAF - Free Report) beat their respective Zacks Consensus Estimate, while earnings of RLI Corp. (RLI - Free Report) missed the same.

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