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Atlantic American Corporation Reports Second Quarter Results for 2022

  • Net income of $1.2 million for the six month period ended June 30, 2022
  • Operating income of $4.4 million for the six month period ended June 30, 2022
  • Insurance premiums increased $3.1 million, or 9.5%, within the property and casualty operations for the six month period ended June 30, 2022

ATLANTA, Aug. 12, 2022 (GLOBE NEWSWIRE) — Atlantic American Corporation (Nasdaq- AAME) today reported net loss for the three month period ended June 30, 2022 of $1.7 million, or $0.09 per diluted share, as compared to net income of $3.0 million, or $0.14 per diluted share, for the comparable period in 2021. For the six month period ended June 30, 2022, the Company reported net income of $1.2 million, or $0.05 per diluted share, as compared to net income of $2.5 million, or $0.11 per diluted share, for the comparable period in 2021. The decrease in net income for the three month and six month periods ended June 30, 2022 was primarily attributable to fluctuations in market values of equity securities, resulting in a decrease in unrealized gains of $8.9 million and $7.4 million, respectively, over the comparable periods in 2021.

Operating income (as defined below) increased $3.1 million in the three month period ended June 30, 2022 from the three month period ended June 30, 2021. For the six month period ended June 30, 2022, operating income increased $6.1 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 improvement in rate adequacy in the Medicare supplement line of business coupled with an increase in earned premium within the group lines of business.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are delighted to report the marked improvement in operating income for both the quarter and year to date.   Following a number of strategic rate adjustments within our Medicare supplement business, we are beginning to see meaningful improvements in the profitability of that line. Our voluntary benefits division continues to gain ground in the marketplace and we’ve reached a new record in insurance premiums within our property and casualty operations.”

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) losses, 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   Six Months Ended
  June 30,   June 30,
(Unaudited; In thousands, except per share data)   2022       2021       2022       2021  
Insurance premiums              
Life and health $ 28,296     $ 28,771     $ 58,034     $ 58,246  
Property and casualty   18,769       16,362       36,112       32,977  
Insurance premiums, net   47,065       45,133       94,146       91,223  
               
Net investment income   2,529       2,266       4,869       4,379  
Realized investment gains (losses), net   (62 )     50       (72 )     171  
Unrealized gains (losses) on equity securities, net   (4,866 )     4,003       (2,673 )     4,747  
Other income   3       5       7       12  
               
Total revenue   44,669       51,457       96,277       100,532  
               
Insurance benefits and losses incurred              
Life and health   18,713       21,546       39,404       43,069  
Property and casualty   14,040       10,157       24,518       21,906  
Commissions and underwriting expenses   10,215       12,179       23,051       24,743  
Interest expense   414       347       768       693  
Other expense   3,402       3,474       6,855       6,914  
               
Total benefits and expenses   46,784       47,703       94,596       97,325  
               
Income (loss) before income taxes   (2,115 )     3,754       1,681       3,207  
Income tax expense (benefit)   (436 )     792       518       676  
               
Net income (loss) $ (1,679 )   $ 2,962     $ 1,163     $ 2,531  
               
Earnings (loss) per common share (basic) $ (0.09 )   $ 0.14     $ 0.05     $ 0.11  
Earnings (loss) per common share (diluted) $ (0.09 )   $ 0.14     $ 0.05     $ 0.11  
               
Reconciliation of Non-GAAP Financial Measure              
               
Net income (loss) $ (1,679 )   $ 2,962     $ 1,163     $ 2,531  
Income tax expense (benefit)   (436 )     792       518       676  
Realized investment (gains) losses, net   62       (50 )     72       (171 )
Unrealized (gains) losses on equity securities, net   4,866       (4,003 )     2,673       (4,747 )
               
Non-GAAP Operating income (loss) $ 2,813     $ (299 )   $ 4,426     $ (1,711 )
               
       
  June 30,  December 31,       
Selected Balance Sheet Data   2022       2021          
               
Total cash and investments $ 259,845     $ 308,195          
Insurance subsidiaries   254,032       302,302          
Parent and other   5,813       5,893          
Total assets   379,274       402,286          
Insurance reserves and policyholder funds   211,874       201,797          
Debt   34,738       33,738          
Total shareholders’ equity   109,101       141,286          
Book value per common share   5.08       6.66          
Statutory capital and surplus              
Life and health   35,946       38,625          
Property and casualty   52,534       52,724          

 

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