AMERISAFE, Inc.

based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results may differ materially from the results expressed or implied in these statements if the underlying assumptions prove to be incorrect or as the result of risk, uncertainties, and other factors, including factors discussed in the earnings release, in the comments made during today's call, and in the risk factor section of our Form 10-K, Form 10-Qs, and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement. I will now turn the call over to Janelle Frost, AmeriSafe's President and CEO.

Thank you, Katherine, and good morning, everyone. I am pleased to begin today's call highlighting our continued success in growing premiums by increasing policy count exhibiting pricing discipline, and strong renewal retention. Our risk selection, coupled with working more effectively with our agents, generated 12.8% growth in voluntary premiums for policies written in the quarter. Our enforced policy count grew 3.4% in the quarter, supported by new business growth and 93.8% renewal retention. These accomplishments took place in the competitive market, where workers' compensation remains the most profitable in the property and casualty space. According to NCCI, the industry's combined ratio remained below 100% for 2024. However, it did not improve over 2023, unlike the other P&C lines, which are getting rate increases. Workers' compensation approved loss costs, on average, are down mid-single digits. with California being a significant outlier with an 8.7% increase. While AmeriSafe only has ancillary exposure in California, we cannot ignore the potential for this dramatic increase to signal a shift in the cycle. Another potential sign for a shift was NCCI's reported 6% increase in medical severity for 2024. Regardless if the market remains soft or begins to harden, Amerisafe is well positioned both operationally and with a strong balance sheet to respond and generate consistent underwriting profitability. As for Amerisafe's loss experience, frequency was down compared to second quarter of 2024 and severity trends are within our expectations. Our current accident year loss ratio was 71% as of the end of the second quarter. In addition, we had $8.6 million of favorable development in the quarter as our claims team continues to demonstrate expertise in finding opportunities to close claims effectively and efficiently. This quarter, accident years 2020 and prior drove most of the favorable case development. Further, on July 23, 2025, our Board of Directors approved the reauthorization of a $25 million share repurchase program. replacing the prior program. Since the inception of our initial program in February of 2010, we have repurchased approximately 1.75 million shares at an average cost of $25.69 per share, totaling $44.8 million. In addition, the company's board of directors declared a regular quarterly cash dividend of $0.39 per share, payable on September 26, 2025, to shareholders of record as of September 12, 2025. These ongoing capital management strategies reflect our confidence in the long-term value of our business and our commitment to delivering to shareholder returns. I'll now turn the call over to Andy to discuss financial results surrounding our underwriting profitability and investment.

Thank you, Janelle, and good morning, everyone. For the second quarter of 2025 AmeriSafe reported net income of 14 million or 73 cents per diluted share and operating net income of 10 million or 53 cents per diluted share. During the second quarter of 2024 net income was 11 million or 57 cents per diluted share and operating net income was 11.1 million or 58 cents per diluted share. The higher reported net income was primarily driven by stronger valuations across our equity holdings which resulted in a net unrealized gain on equity securities of $1.8 million during the quarter, in addition to $3.1 million of realized gains also primarily from equity securities. Gross written premiums were $79.7 million in the quarter, compared with $76.4 million in Q2 of 2024, increasing 4.3%. Audit premiums continued to moderate, which increased the top line by $1.5 million compared with $7.3 million in the year-ago period. Despite the audit premium headwinds, voluntary premium growth on policies written in the quarter was 12.8% fueled by new business production and strong retention. Our total underwriting and other expenses were $21.7 million in the quarter compared with $20.4 million recognized in the prior year quarter. This increase resulted in an expense ratio of 31.3% compared with 29.8% in the year-ago quarter. The expense ratio reflects ongoing investment in AmeriSafe's growth. Further, auto premium, which is earned immediately, has declined in comparison to the prior year, but is still a material contributor to net premiums earned, while voluntary premiums are earned over time, creating an expense premium mismatch that elevates the ratio. Lastly, 100 basis points of the current quarter's expense ratio is due to increase in insurance-based assessments. We anticipate the full year expense ratio to be in line with previous years. Our effective tax rate was 20.1% compared to 20% in the prior year quarter. Turning to our investment portfolio. In the second quarter, net investment income decreased 10.2% to $6.7 million. driven by a decrease in investable assets following the payment of the special dividend. At quarter end, we had approximately $807 million in investments, cash and cash equivalents, compared to $884 million at June 30, 2024. On a consecutive quarter basis, net investment income increased by 60 basis points. The reinvestment rate environment remained strong this quarter, with yields on new investments exceeding portfolio roll-off by 230 basis points, contributing to a tax equivalent book yield of 3.85% compared to 3.79% in the second quarter of 2024. Our investment portfolio remains high quality, carrying an average AA minus credit rating with a duration of four and a half years. The composition of the portfolio is 62% in municipal bonds, 21% in corporate bonds, 4% in US treasuries and agencies, 7% in equity securities, and 6% in cash and other investments. Approximately 50% of the portfolio is classified as held to maturity. As a reminder, these securities are carried at amortized cost and therefore unrealized gains and losses are not reflected in our reported book value. Our capital position is strong with a high-quality balance sheet, solid loss reserve position, and conservative investment portfolio. During the second quarter, the company repurchased 63,000 shares at an average cost of $44.55, totaling $2.8 million. And finally, a couple of other topics. Book value per share increased to $13.96, up 3.3% year to date. Statutory surplus was $257 million compared to $235 million at year end 2024. And lastly, we will be filing our 10-Q with the SEC later today after the close of the market. With that, I would like to open the call for the question and answer portion of the call. Operator?