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Atlantic American Corporation Reports Fourth Quarter and Year End Results for 2018; Declares Annual Dividend

ATLANTA, April 01, 2019 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported its results for the fourth quarter and year ended December 31, 2018.  For the fourth quarter ended December 31, 2018, the Company reported net income of $0.2 million, or $0.01 per diluted share, down from $2.5 million, or $0.12 per diluted share, in the fourth quarter of 2017.  The decrease in net income was primarily attributable to an increase in unrealized losses on equity securities recognized in net income of $2.9 million and a decrease in realized investment gains of $2.0 million, partially offset by improvements in underwriting results.  Premiums for the fourth quarter of 2018 increased 12.4% to $45.3 million compared to $40.3 million for the fourth quarter of 2017, as premiums in the life and health operations and property and casualty operations increased 14.4% and 8.3%, respectively, as compared to 2017.

For the year ended December 31, 2018, the Company reported a net loss of $0.7 million, or $0.05 per diluted share, as compared to net income of $4.5 million, or $0.20 per diluted share, for the year ended December 31, 2017.  The decrease was primarily attributable to a decline in realized investment gains of $4.0 million coupled with $2.2 million in unrealized losses on equity securities recognized in net income.  Total premiums during 2018 increased 5.9% to $172.9 million from $163.3 million in 2017, as premiums in the life and health operations increased 8.6% in 2018 as compared to 2017.

Commenting on the results, Hilton H. Howell, Jr., chairman, president and chief executive officer, stated, “We are pleased with the year over year growth in premium revenues in each of our insurance subsidiaries and remain focused on refining processes and improving profitability.  Rate increases implemented in our life and health operations are beginning to take hold and we are pleased to report the renewal of a significant multi-year state contract with our property and casualty operations, which also included a rate increase.  While prudent pricing practices are key to profitability, the Company has embarked on a number of initiatives to enhance underwriting, better educate our agents, and improve the policyholder experience.  We remain confident in the long-term viability of our strategy and in our commitment to deliver value to our shareholders.  Accordingly, the Board of Directors recently approved the Company’s 8th annual dividend, which is payable on April 24, 2019 to shareholders of record on April 10, 2019.”

Atlantic American 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 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   Year ended
  December 31,   December 31,
(Unaudited; In thousands, except per share data) 2018   2017   2018   2017
Insurance premiums              
Life and health              
Gross earned premiums $ 47,425     $ 39,749     $ 180,583     $ 142,251  
Ceded premiums   (16,606 )     (12,811 )     (61,459 )     (32,585 )
Net earned premiums   30,819       26,938       119,124       109,666  
Property and casualty              
Gross earned premiums   15,914       14,589       58,882       58,449  
Ceded premiums   (1,406 )     (1,196 )     (5,075 )     (4,788 )
Net earned premiums   14,508       13,393       53,807       53,661  
               
Insurance premiums, net   45,327       40,331       172,931       163,327  
Net investment income   2,438       2,116       9,549       8,496  
Realized investment gains, net   4,357       6,350       5,154       9,168  
Unrealized losses on equity securities, net   (2,947 )     -       (2,194 )     -  
Other income   25       28       113       123  
               
Total revenue     49,200         48,825         185,553         181,114  
               
Insurance benefits and losses incurred              
Life and health   23,887       21,462       93,821       83,029  
Property and casualty   10,285       8,607       38,829       34,486  
Commissions and underwriting expenses   10,586       11,646       39,042       43,446  
Interest expense   540       450       2,037       1,723  
Other expense   3,627       3,773       12,795       13,074  
               
Total benefits and expenses   48,925       45,938       186,524       175,758  
               
Income (loss) before income taxes   275       2,887       (971 )     5,356  
Income tax expense (benefit)   74       345       (267 )     828  
               
Net income (loss) $    201     $    2,542     $    (704 )   $    4,528  
               
Earnings (loss) per common share (basic and diluted) $    0.01     $    0.12     $    (0.05 )   $    0.20  
               
Reconciliation of Non-GAAP Financial Measure              
               
Net income (loss) $ 201     $ 2,542     $ (704 )   $ 4,528  
Income tax expense (benefit)   74       345       (267 )     828  
Realized investment gains, net   (4,357 )     (6,350 )     (5,154 )     (9,168 )
Unrealized losses on equity securities, net   2,947       -       2,194       -  
               
Non-GAAP operating loss $    (1,135 )   $    (3,463 )   $    (3,931 )   $    (3,812 )
         
  December 31,   December 31,  
Selected Balance Sheet Data 2018   2017  
         
Total cash and investments $ 254,559     $ 272,058    
Insurance subsidiaries   235,796       244,754    
Parent and other   18,763       27,304    
Total assets   344,274       343,239    
Insurance reserves and policyholder funds   189,048       173,583    
Debt   33,738       33,738    
Total shareholders' equity   101,372       112,983    
Book value per common share   4.75       5.26    
Statutory capital and surplus        
Life and health   34,214       34,135    
Property and casualty   43,467       43,348