AMERISAFE INC Income Taxes Disclosure
The Company’s deferred income tax assets and liabilities are as follows:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Deferred income tax assets: |
|
|
|
|
|
|
||
Discounting of net unpaid loss and loss adjustment expenses |
|
$ |
13,744 |
|
|
$ |
14,552 |
|
Unearned premiums |
|
|
6,794 |
|
|
|
6,257 |
|
Accrued expenses and other |
|
|
2,057 |
|
|
|
2,145 |
|
State income tax |
|
|
2,373 |
|
|
|
2,501 |
|
Accrued policyholder dividends |
|
|
1,294 |
|
|
|
1,408 |
|
Accrued insurance-related assessments |
|
|
1,598 |
|
|
|
1,557 |
|
Total deferred tax assets |
|
|
27,860 |
|
|
|
28,420 |
|
|
|
|
|
|
|
|
||
Deferred income tax liabilities: |
|
|
|
|
|
|
||
Deferred policy acquisition costs |
|
|
(5,167 |
) |
|
|
(4,737 |
) |
Net unrealized gain on securities available-for-sale |
|
|
(4,674 |
) |
|
|
(2,389 |
) |
Property and equipment and other |
|
|
(171 |
) |
|
|
(130 |
) |
Salvage and subrogation |
|
|
(276 |
) |
|
|
(302 |
) |
Loss reserves adjustment |
|
|
— |
|
|
|
(1,414 |
) |
Total deferred income tax liabilities |
|
|
(10,288 |
) |
|
|
(8,972 |
) |
Net deferred income taxes |
|
$ |
17,572 |
|
|
$ |
19,448 |
|
The components of consolidated income tax expense (benefit) are as follows:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(in thousands) |
|
|||||||||
Current: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
10,341 |
|
|
$ |
11,351 |
|
|
$ |
13,621 |
|
State |
|
|
993 |
|
|
|
867 |
|
|
|
1,020 |
|
|
|
|
11,334 |
|
|
|
12,218 |
|
|
|
14,641 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
244 |
|
|
|
1,408 |
|
|
|
655 |
|
State |
|
|
128 |
|
|
|
(6 |
) |
|
|
(27 |
) |
|
|
|
372 |
|
|
|
1,402 |
|
|
|
628 |
|
Total |
|
$ |
11,706 |
|
|
$ |
13,620 |
|
|
$ |
15,269 |
|
As of December 31, 2025, 2024 and 2023, the Company had no valuation allowance against its deferred income tax assets and liabilities. The realization of this asset is dependent upon the Company's ability to generate sufficient taxable income in future periods. Based on historical results and the prospects for future operations, management anticipates that it is more likely than not that future taxable income will be sufficient for the realization of this asset.
Income tax expense from operations is different from the amount computed by applying the U.S. federal income tax statutory rate of 21% to income before income taxes as follows:
|
|
Year Ended December 31, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||||||||||||||
|
|
Amount ($) |
|
|
Percentage |
|
|
Amount ($) |
|
|
Percentage |
|
|
Amount ($) |
|
|
Percentage |
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||||||
|
|
(in thousands) |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
(in thousands) |
|
|
|
|
||||||
tax computed at federal statutory tax rate |
|
$ |
12,359 |
|
|
|
21.0 |
% |
|
$ |
14,502 |
|
|
|
21.0 |
% |
|
|
16,249 |
|
|
|
21.0 |
% |
State income tax (1) |
|
|
912 |
|
|
|
1.5 |
% |
|
|
679 |
|
|
|
1.0 |
% |
|
|
779 |
|
|
|
1.0 |
% |
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tax-exempt interest, net |
|
|
(1,908 |
) |
|
|
-3.2 |
% |
|
|
(1,945 |
) |
|
|
-2.8 |
% |
|
|
(1,997 |
) |
|
|
-2.6 |
% |
All other |
|
|
351 |
|
|
|
0.6 |
% |
|
|
376 |
|
|
|
0.5 |
% |
|
|
225 |
|
|
|
0.3 |
% |
Other |
|
|
(8 |
) |
|
|
0.0 |
% |
|
|
8 |
|
|
|
0.0 |
% |
|
|
13 |
|
|
|
0.0 |
% |
|
|
$ |
11,706 |
|
|
|
19.9 |
% |
|
$ |
13,620 |
|
|
|
19.7 |
% |
|
$ |
15,269 |
|
|
|
19.7 |
% |
The Company has no foreign operations. Federal and state income tax payments, net of refunds, are as follows:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(in thousands) |
|
|||||||||
Income taxes paid, net of refunds received |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
11,250 |
|
|
$ |
11,750 |
|
|
$ |
13,950 |
|
State (1) |
|
|
1,200 |
|
|
|
1,099 |
|
|
|
962 |
|
Total |
|
$ |
12,450 |
|
|
$ |
12,849 |
|
|
$ |
14,912 |
|
|
|
|
|
|
|
|
|
|
|
|||
Income from continuing operations before income taxes |
|
|
|
|
|
|
|
|
|
|||
Domestic |
|
$ |
58,851 |
|
|
$ |
69,056 |
|
|
$ |
77,377 |
|
|
|
|
|
|
|
|
|
|
|
|||
Income tax expense from continuing operations |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
10,585 |
|
|
$ |
12,759 |
|
|
$ |
14,276 |
|
State |
|
|
1,121 |
|
|
|
861 |
|
|
|
993 |
|
Total |
|
$ |
11,706 |
|
|
$ |
13,620 |
|
|
$ |
15,269 |
|
(1) Payments to Florida and Illinois make up greater than 50% of the total state income taxes paid, net of refunds received.
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There were no uncertain tax positions as of December 31, 2025, 2024 and 2023.
The Inflation Reduction Act was enacted on August 16, 2022, and included a new Corporate Alternative Minimum Tax (CAMT). The Company has determined they do not expect to be liable for CAMT in 2025.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted, introducing multiple changes to the U.S. tax code. The OBBBA contains several changes impacting corporate taxpayers, including modifications to the limitations on deductions for charitable contributions and the re-establishment of accelerated depreciation on certain qualified depreciable assets. The new tax regulation set forth by the OBBBA did not have a significant impact on the Company’s financial statements.
Tax years 2022 through 2025 are subject to examination by the federal and state taxing authorities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.