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Atlantic American Corporation Reports Second Quarter Results For 2021

AAME

ATLANTA, Aug. 10, 2021 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net income for the three month period ended June 30, 2021 of $3.0 million, or $0.14 per diluted share, as compared to net income of $6.5 million, or $0.30 per diluted share, for the comparable period in 2020. For the six month period ended June 30, 2021, the Company reported net income of $2.5 million, or $0.11 per diluted share, as compared to net loss of $1.6 million, or $0.09 per diluted share, for the comparable period in 2020. The decrease in net income during the second quarter of 2021 was primarily due to a $4.5 million increase in life and health insurance benefits and losses incurred. Such increase was largely the result of higher utilization of policy benefits as compared to the unusually low levels experienced in 2020 during the COVID-19 shelter in place restrictions imposed on our policyholders. The increase in net income for the six month period ended June 30, 2021 was primarily due to $4.7 million of net unrealized gains on equity securities as compared to $7.1 million of unrealized losses on equity securities during the comparable period in 2020. Changes in unrealized gains and losses on equity securities for the applicable periods are primarily the result of fluctuations in the market values of the Company’s equity investments.

Operating income (as defined below) decreased $7.2 million in the three month period ended June 30, 2021 from the three month period ended June 30, 2020. For the six month period ended June 30, 2021, operating income decreased $6.6 million from the comparable period in 2020. The decrease in operating income for the three and six month periods was primarily due to less favorable loss experience in the life and health operations, resulting from a significant increase in the number of incurred claims within the Medicare supplement line of business, as mentioned above.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are extremely pleased with the new premium growth this year in our property and casualty operations. Despite the challenges faced over the most recent year related to the COVID-19 pandemic, that business has prospered exceedingly well. We continue to refine the underwriting on our Medicare supplement business and have made targeted investments in the life and health operations to better serve the needs of our customers. The second half of the year is when the majority of enrollment periods begin in both the individual and group markets, which we believe we are well positioned to serve. We anticipate a strong finish for the balance of this year.”

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). 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, 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 detailed from time to time in statements and reports that Atlantic American Corporation files 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) 2021 2020 2021 2020
Insurance premiums
Life and health $ 28,771 $ 30,675 $ 58,246 $ 61,303
Property and casualty 16,362 15,824 32,977 30,746
Insurance premiums, net 45,133 46,499 91,223 92,049
Net investment income 2,266 1,850 4,379 3,889
Realized investment gains, net 50 - 171 249
Unrealized gains (losses) on equity securities, net 4,003 1,355 4,747 (7,100 )
Other income 5 33 12 60
Total revenue 51,457 49,737 100,532 89,147
Insurance benefits and losses incurred
Life and health 21,546 17,055 43,069 41,104
Property and casualty 10,157 10,021 21,906 19,555
Commissions and underwriting expenses 12,179 10,854 24,743 23,480
Interest expense 347 414 693 890
Other expense 3,474 3,112 6,914 6,064
Total benefits and expenses 47,703 41,456 97,325 91,093
Income (loss) before income taxes 3,754 8,281 3,207 (1,946 )
Income tax expense (benefit) 792 1,749 676 (391 )
Net income (loss) $ 2,962 $ 6,532 $ 2,531 $ (1,555 )
Earnings (loss) per common share (basic) $ 0.14 $ 0.31 $ 0.11 $ (0.09 )
Earnings (loss) per common share (diluted) $ 0.14 $ 0.30 $ 0.11 $ (0.09 )
Reconciliation of Non-GAAP Financial Measure
Net income (loss) $ 2,962 $ 6,532 $ 2,531 $ (1,555 )
Income tax expense (benefit) 792 1,749 676 (391 )
Realized investment gains, net (50 ) - (171 ) (249 )
Unrealized (gains) losses on equity securities, net (4,003 ) (1,355 ) (4,747 ) 7,100
Non-GAAP Operating income (loss) $ (299 ) $ 6,926 $ (1,711 ) $ 4,905


June 30, December 31,
Selected Balance Sheet Data 2021 2020
Total cash and investments $ 295,556 $ 298,630
Insurance subsidiaries 290,189 292,478
Parent and other 5,367 6,152
Total assets 404,486 405,187
Insurance reserves and policyholder funds 205,873 198,676
Debt 33,738 33,738
Total shareholders' equity 142,375 145,060
Book value per common share 6.71 6.84
Statutory capital and surplus
Life and health 41,690 42,326
Property and casualty 50,017 50,194

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