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Atlantic American Corporation Reports Second Quarter Results for 2020

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Atlantic American Corporation
·6 min read
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ATLANTA, Aug. 11, 2020 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net income for the three month period ended June 30, 2020 of $6.5 million, or $0.30 per diluted share, as compared to net loss of $4.4 million, or $0.22 per diluted share, for the comparable period in 2019. For the six month period ended June 30, 2020, the Company reported net loss of $1.6 million, or $0.09 per diluted share, as compared to net loss of $0.3 million, or $0.02 per diluted share, for the comparable period in 2019. The increase in net income during the second quarter of 2020 was primarily due to a $7.3 million decrease in total benefits and expenses coupled with an increase in unrealized gains on equity securities of $6.7 million for the second quarter of 2020 as compared to the second quarter of 2019. The net loss for the six month period ended June 30, 2020 was primarily due to $7.1 million of net unrealized losses on equity securities during the six month period ended June 30, 2020 as compared to $1.2 million of unrealized gains on equity securities during 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.

Excluding the effects of realized or unrealized gains or losses and taxes, operating income (as defined below) increased $7.8 million in the three month period ended June 30, 2020 from the three month period ended June 30, 2019. For the six month period ended June 30, 2020, operating income increased $8.4 million over the comparable period in 2019. The increase in operating income was primarily due to favorable loss experience in the Company’s life and health operations, resulting from a significant decrease in the number of incurred claims within the Medicare supplement line of business. This decrease in the number of incurred claims was primarily attributable to the Company’s individual policy holders being subject to varying degrees of shelter in place orders instituted throughout the United States during the second quarter of 2020 as a result of COVID-19.

Commenting on the results, Hilton H. Howell, Jr., chairman, president and chief executive officer, stated, “I am delighted with the performance of each of our operating segments and proud to report the return to operating income for the year. Our BankersWorksite® division is on track for a record year of new sales which will further promote our diversification efforts. Additionally, our property and casualty operations continue to perform well and had one of the best quarters on record. Our Company remains strong and firmly committed to delivering our superior service to policyholders, employers, and agents in these unprecedented times.”

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)

2020

2019

2020

2019

Insurance premiums

Life and health

$

30,675

$

30,715

$

61,303

$

61,691

Property and casualty

15,824

14,754

30,746

28,560

Insurance premiums, net

46,499

45,469

92,049

90,251

Net investment income

1,850

2,313

3,889

4,647

Realized investment gains, net

-

610

249

1,995

Unrealized gains (losses) on equity securities, net

1,355

(5,337

)

(7,100

)

1,152

Other income

33

72

60

100

Total revenue

49,737

43,127

89,147

98,145

Insurance benefits and losses incurred

Life and health

17,055

24,288

41,104

50,552

Property and casualty

10,021

9,863

19,555

18,906

Commissions and underwriting expenses

10,854

11,509

23,480

22,524

Interest expense

414

545

890

1,091

Other expense

3,112

2,511

6,064

5,376

Total benefits and expenses

41,456

48,716

91,093

98,449

Income (loss) before income taxes

8,281

(5,589

)

(1,946

)

(304

)

Income tax expense (benefit)

1,749

(1,163

)

(391

)

(40

)

Net income (loss)

$

6,532

$

(4,426

)

$

(1,555

)

$

(264

)

Earnings (loss) per common share (basic)

$

0.31

$

(0.22

)

$

(0.09

)

$

(0.02

)

Earnings (loss) per common share (diluted)

$

0.30

$

(0.22

)

$

(0.09

)

$

(0.02

)

Reconciliation of Non-GAAP Financial Measure

Net income (loss)

$

6,532

$

(4,426

)

$

(1,555

)

$

(264

)

Income tax expense (benefit)

1,749

(1,163

)

(391

)

(40

)

Realized investment gains, net

-

(610

)

(249

)

(1,995

)

Unrealized (gains) losses on equity securities, net

(1,355

)

5,337

7,100

(1,152

)

Non-GAAP Operating income (loss)

$

6,926

$

(862

)

$

4,905

$

(3,451

)

June 30,

December 31,

Selected Balance Sheet Data

2020

2019

Total cash and investments

$

283,254

$

281,530

Insurance subsidiaries

276,585

274,730

Parent and other

6,669

6,800

Total assets

385,737

377,626

Insurance reserves and policyholder funds

204,711

201,906

Debt

33,738

33,738

Total shareholders' equity

123,894

118,394

Book value per common share

5.79

5.51

Statutory capital and surplus

Life and health

34,735

35,546

Property and casualty

45,927

45,827