Atlantic American Corporation Reports Third Quarter Results for 2022

Atlanta, Georgia, UNITED STATES


ATLANTA, Nov. 08, 2022 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net loss for the three month period ended September 30, 2022 of $0.7 million, or $0.04 per diluted share, as compared to net loss of $0.9 million, or $0.05 per diluted share, for the comparable period in 2021. For the nine month period ended September 30, 2022, the Company reported net income of $0.5 million, or $0.01 per diluted share, as compared to net income of $1.6 million, or $0.06 per diluted share, for the comparable period in 2021.   The decrease in net loss for the three month period ended September 30, 2022 was primarily attributable to more favorable loss experience in the life and health operations, partially offset by a decrease in unrealized gains of $3.5 million, from the comparable period in 2021. The decrease in net income for the nine month period ended September 30, 2022 was primarily attributable to the decrease in unrealized gains of $10.9 million from the comparable period in 2021, partially offset by more favorable loss experience in the life and health operations.

Operating income (as defined below) increased $4.1 million in the three month period ended September 30, 2022 from the three month period ended September 30, 2021. For the nine month period ended September 30, 2022, operating income increased $10.2 million from the comparable period in 2021. The increase in operating income was primarily due to favorable loss experience in the life and health operations, resulting from an increase in earned premium within the group lines of business coupled with a decrease in the number of claims incurred in the Medicare supplement line of business.
   
Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are quite pleased to report an over $10 million improvement in operating income for the first nine months of 2022 as compared to 2021. The life and health operations have done a phenomenal job in diversifying the business through its competitive group products, as well as carefully managing the Medicare supplement line back to profitability. Additionally, our property and casualty operations continue to perform exceptionally well, maintaining profitability coupled with top line growth. Finally, it is with great enthusiasm that we announce our newly formed subsidiary, Atlantic Capital Life Assurance Company, which recently obtained its certificate of authority in our state of domicile.”

Atlantic American Corporation is an insurance holding company involved through its subsidiary companies in specialty markets of the life, health, and property and casualty insurance industries. Its principal insurance subsidiaries are American Southern Insurance Company, American Safety Insurance Company, Bankers Fidelity Life Insurance Company and Bankers Fidelity Assurance Company.

Note regarding non-GAAP financial measure: Atlantic American Corporation presents its consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP). However, from time to time, the Company may present, in its public statements, press releases and filings with the Securities and Exchange Commission, non-GAAP financial measures such as operating income (loss). We define operating income (loss) as net income (loss) excluding: (i) income tax expense (benefit); (ii) realized investment gains, net; and (iii) unrealized (gains) losses on equity securities, net. Management believes operating income (loss) is a useful metric for investors, potential investors, securities analysts and others because it isolates the “core” operating results of the Company before considering certain items that are either beyond the control of management (such as income tax expense (benefit), which is subject to timing, regulatory and rate changes depending on the timing of the associated revenues and expenses) or are not expected to regularly impact the Company’s operating results (such as any realized and unrealized investment gains (losses), which are not a part of the Company’s primary operations and are, to a limited extent, subject to discretion in terms of timing of realization). The financial data attached includes a reconciliation of operating income (loss) to net income (loss), the most comparable GAAP financial measure. The Company’s definition of operating income (loss) may differ from similarly titled financial measures used by others. This non-GAAP financial measure should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.

Note regarding Private Securities Litigation Reform Act: Except for historical information contained herein, this press release contains forward-looking statements that involve a number of risks and uncertainties. Actual results could differ materially from those indicated by such forward-looking statements due to a number of factors and risks, including those detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and subsequent statements and reports that Atlantic American Corporation files from time to time with the Securities and Exchange Commission.

For further information contact:  
J. Ross Franklin Hilton H. Howell, Jr.
Chief Financial Officer Chairman, President & CEO
Atlantic American Corporation Atlantic American Corporation
404-266-5580 404-266-5505

Atlantic American Corporation
Financial Data

 Three Months Ended Nine Months Ended
 September 30, September 30,
(Unaudited; In thousands, except per share data) 2022   2021   2022   2021 
Insurance premiums       
    Life and health$28,739  $28,772  $86,773  $87,018 
    Property and casualty 17,641   17,320   53,753   50,297 
        Insurance premiums, net 46,380   46,092   140,526   137,315 
        
Net investment income 2,641   2,137   7,510   6,516 
Realized investment gains, net 101   349   29   520 
Unrealized gains (losses) on equity securities, net (2,783)  711   (5,456)  5,458 
Other income 4   1   11   13 
        
Total revenue 46,343   49,290   142,620   149,822 
        
Insurance benefits and losses incurred       
    Life and health 18,599   23,394   58,003   66,463 
    Property and casualty 12,031   11,651   36,549   33,557 
Commissions and underwriting expenses 12,843   11,927   35,894   36,670 
Interest expense 523   347   1,291   1,040 
Other expense 3,296   3,264   10,151   10,178 
        
  Total benefits and expenses 47,292   50,583   141,888   147,908 
        
Income (loss) before income taxes (949)  (1,293)  732   1,914 
Income tax expense (benefit) (265)  (378)  253   298 
        
Net income (loss)$ (684) $ (915) $ 479  $ 1,616 
        
Earnings (loss) per common share (basic and diluted)$ (0.04) $ (0.05) $ 0.01  $ 0.06 
        
Reconciliation of Non-GAAP Financial Measure       
        
Net income (loss)$(684) $(915) $479  $1,616 
Income tax expense (benefit) (265)  (378)  253   298 
Realized investment gains, net (101)  (349)  (29)  (520)
Unrealized (gains) losses on equity securities, net 2,783   (711)  5,456   (5,458)
        
Non-GAAP Operating income (loss)$ 1,733  $ (2,353) $ 6,159  $ (4,064)
        
    
 September 30,December 31,    
Selected Balance Sheet Data 2022   2021     
        
Total cash and investments$246,340  $308,195     
    Insurance subsidiaries 240,860   302,302     
    Parent and other 5,480   5,893     
Total assets 360,349   402,286     
Insurance reserves and policyholder funds 204,289   201,797     
Debt 34,738   33,738     
Total shareholders' equity 97,911   141,286     
Book value per common share 4.54   6.66     
Statutory capital and surplus       
    Life and health 35,325   38,625     
    Property and casualty 52,981   52,724