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Atlantic American Corporation Reports Fourth Quarter and Year End Results for 2020; Declares Annual Dividend

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Atlantic American Corporation
·7 min read
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ATLANTA, March 23, 2021 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net income for the three month period ended December 31, 2020 of $11.8 million, or $0.54 per diluted share, as compared to net income of $1.3 million, or $0.06 per diluted share, for the comparable period in 2019. For the year ended December 31, 2020, the Company reported net income of $12.2 million, or $0.56 per diluted share, as compared to net loss of $0.4 million, or $0.04 per diluted share, for the comparable period in 2019. The increase in net income during the fourth quarter of 2020 was primarily due to a $7.0 million increase in realized gains coupled with a $5.1 million decrease in insurance benefits and losses incurred for the fourth quarter of 2020 as compared to the comparable quarter of 2019. The increase in net income for the year ended December 31, 2020 was primarily due to a $19.3 million decrease in insurance benefits and losses incurred and a $5.8 million increase in realized gains, somewhat offset by a decrease of $8.9 million of net unrealized gains and losses on equity securities during the year ended December 31, 2020 as compared to the comparable period in 2019. 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) increased to $3.6 million in the three month period ended December 31, 2020 as compared to a $1.8 million operating loss for the three month period ended December 31, 2019. For the year ended December 31, 2020, operating income increased to $11.5 million over an operating loss of $7.5 million for the comparable period in 2019. The increase in operating income for the three and twelve month periods was primarily due to improved loss experience in the Company’s life and health operations, resulting from a significant decrease in the number of incurred claims and improved rate adequacy within the Medicare supplement line of business. The decrease in the number of incurred claims was primarily attributable to lower utilization of medical services by our policyholders as a result of the COVID-19 pandemic.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are exceptionally encouraged by the strong operating results reported by our family of insurance companies. Despite the many uncertainties we were faced with in 2020 due to the COVID-19 pandemic and many of our employees shifting to a work-from-home environment, we overcame the challenges and have recently resumed in-person operations for the majority of our staff. Our insurance subsidiaries reported record financial results and we are excited about the prospects for this upcoming year. In recognition of an outstanding earnings report and our commitment to delivering value to our shareholders, we are pleased to announce our Board’s decision to reinstate the Company’s annual dividend in the amount of $0.02 per share, which is payable on April 27, 2021 to shareholders of record on April 13, 2021.”

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

Twelve Months Ended

December 31,

December 31,

(Unaudited; In thousands, except per share data)

2020

2019

2020

2019

Insurance premiums

Life and health

$

29,656

$

31,024

$

121,167

$

123,245

Property and casualty

16,856

15,645

62,372

58,680

Insurance premiums, net

46,512

46,669

183,539

181,925

Net investment income

2,027

2,145

7,744

8,979

Realized investment gains, net

6,988

9

7,420

1,574

Unrealized gains (losses) on equity securities, net

4,400

3,415

(3,431

)

5,511

Other income

5

51

76

190

Total revenue

59,932

52,289

195,348

198,179

Insurance benefits and losses incurred

Life and health

19,345

23,853

80,537

99,684

Property and casualty

10,653

11,195

39,339

39,541

Commissions and underwriting expenses

12,129

11,482

46,811

45,477

Interest expense

357

506

1,610

2,130

Other expense

2,432

3,612

11,548

11,754

Total benefits and expenses

44,916

50,648

179,845

198,586

Income (loss) before income taxes

15,016

1,641

15,503

(407

)

Income tax expense (benefit)

3,168

371

3,334

(21

)

Net income (loss)

$

11,848

$

1,270

$

12,169

$

(386

)

Earnings (loss) per common share (basic)

$

0.58

$

0.06

$

0.58

$

(0.04

)

Earnings (loss) per common share (diluted)

$

0.54

$

0.06

$

0.56

$

(0.04

)

Reconciliation of Non-GAAP Financial Measure

Net income (loss)

$

11,848

$

1,270

$

12,169

$

(386

)

Income tax expense (benefit)

3,168

371

3,334

(21

)

Realized investment gains, net

(6,988

)

(9

)

(7,420

)

(1,574

)

Unrealized (gains) losses on equity securities, net

(4,400

)

(3,415

)

3,431

(5,511

)

Non-GAAP Operating income (loss)

$

3,628

$

(1,783

)

$

11,514

$

(7,492

)

December 31,

December 31,

Selected Balance Sheet Data

2020

2019

Total cash and investments

$

298,630

$

281,530

Insurance subsidiaries

292,478

274,730

Parent and other

6,152

6,800

Total assets

405,187

377,626

Insurance reserves and policyholder funds

198,676

201,906

Debt

33,738

33,738

Total shareholders' equity

145,060

118,394

Book value per common share

6.84

5.51

Statutory capital and surplus

Life and health

42,326

35,546

Property and casualty

50,194

45,827