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Atlantic American Reports Third Quarter Results For 2021

ATLANTA, Nov. 10, 2021 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net loss for the three month period ended September 30, 2021 of $0.9 million, or $0.05 per diluted share, as compared to net income of $1.9 million, or $0.09 per diluted share, for the comparable period in 2020. For the nine month period ended September 30, 2021, the Company reported net income of $1.6 million, or $0.06 per diluted share, as compared to net income of $0.3 million, or nil per diluted share, for the comparable period in 2020. The decrease in net income during the third quarter of 2021 was primarily due to a $5.8 million increase in insurance benefits and losses incurred, somewhat offset by an increase in unrealized gains on equity securities of $1.4 million for the third quarter of 2021 as compared to the third quarter of 2020. The increase in net income for the nine month period ended September 30, 2021 was primarily due to an increase of $13.3 million in net unrealized gains on equity securities largely offset by an increase in insurance benefits and losses incurred of $10.1 million during the nine month period ended September 30, 2021 as compared to the third quarter of 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.

Excluding the effects of realized or unrealized gains or losses and taxes, the Company reported operating loss (as defined below) of $2.4 million for the three month period ended September 30, 2021 as compared to $3.0 million operating income for the three month period ended September 30, 2020. For the nine month period ended September 30, 2021, the Company reported operating loss of $4.1 million as compared to operating income of $7.9 million in the comparable period in 2020. The decrease in operating income for the three and nine month periods was primarily due to an increase in insurance benefits and losses in the Company’s life and health operations, predominantly as a result of claims within the Medicare supplement line of business. During 2021, utilization of Medicare supplement insurance benefits has increased, returning to historical averages relative to the exceptionally low utilization experienced after the onset of the COVID-19 pandemic when many policyholders were sheltered in place.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are pleased to report the premium growth in our property and casualty operation has continued, with a historic high reached for the third quarter. As a result of their selective underwriting, our property and casualty operation continues to perform quite well. While our life and health operation faced a challenging quarter due to increasing demand for health care services, a series of strategic pricing adjustments in our Medicare supplement product is expected to improve profit margins on that business.”

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

Nine Months Ended

September 30,

September 30,

(Unaudited; In thousands, except per share data)

2021

2020

2021

2020

Insurance premiums

Life and health

$

28,772

$

30,208

$

87,018

$

91,511

Property and casualty

17,320

14,770

50,297

45,516

Insurance premiums, net

46,092

44,978

137,315

137,027

Net investment income

2,137

1,828

6,516

5,717

Realized investment gains, net

349

183

520

432

Unrealized gains (losses) on equity securities, net

711

(731

)

5,458

(7,831

)

Other income

1

11

13

71

Total revenue

49,290

46,269

149,822

135,416

Insurance benefits and losses incurred

Life and health

23,394

20,088

66,463

61,192

Property and casualty

11,651

9,131

33,557

28,686

Commissions and underwriting expenses

11,927

11,202

36,670

34,682

Interest expense

347

363

1,040

1,253

Other expense

3,264

3,052

10,178

9,116

Total benefits and expenses

50,583

43,836

147,908

134,929

Income (loss) before income taxes

(1,293

)

2,433

1,914

487

Income tax expense (benefit)

(378

)

557

298

166

Net income (loss)

$

(915

)

$

1,876

$

1,616

$

321

Earnings (loss) per common share (basic and diluted)

$

(0.05

)

$

0.09

$

0.06

$

-

Reconciliation of Non-GAAP Financial Measure

Net income (loss)

$

(915

)

$

1,876

$

1,616

$

321

Income tax expense (benefit)

(378

)

557

298

166

Realized investment gains, net

(349

)

(183

)

(520

)

(432

)

Unrealized (gains) losses on equity securities, net

(711

)

731

(5,458

)

7,831

Non-GAAP Operating income (loss)

$

(2,353

)

$

2,981

$

(4,064

)

$

7,886

September 30,

December 31,

Selected Balance Sheet Data

2021

2020

Total cash and investments

$

300,297

$

298,630

Insurance subsidiaries

295,191

292,478

Parent and other

5,106

6,152

Total assets

404,077

405,187

Insurance reserves and policyholder funds

205,757

198,676

Debt

33,738

33,738

Total shareholders' equity

139,995

145,060

Book value per common share

6.60

6.84

Statutory capital and surplus

Life and health

38,503

42,326

Property and casualty

50,394

50,194