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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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