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Atlantic American Reports Third Quarter Results

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  • Net income for the three month period ended September 30, 2018 increased to $0.9 million as compared to $0.7 million for the comparable period of 2017

  • Life and health insurance premiums increased to $29.5 million, or 5.2%, as compared to $28.0 million for the three month periods ended September 30, 2018 and 2017, respectively

ATLANTA, Nov. 13, 2018 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net income for the three month period ended September 30, 2018 of $0.9 million, or $0.04 per share, as compared to $0.7 million, or $0.03 per share, for the comparable period of 2017. For the nine month period ended September 30, 2018, the company reported a net loss of $0.9 million, or $0.06 per share, as compared to net income of $2.0 million, or $0.08 per share, for the comparable period of 2017. The increase in net income during the third quarter of 2018 was primarily due to $1.1 million of net unrealized gains in equity securities during the third quarter of 2018 compared to nil for the third quarter of 2017. The net loss for the nine month period ended September 30, 2018 was primarily due to an increase in operating losses as a result of higher levels of morbidity experienced in the Medicare supplement line of business during the first half of 2018.

Total revenues for the three month period ended September 30, 2018 were $46.4 million as compared to $44.8 million for the three month period ended September 30, 2017. The above mentioned unrealized gains in equity securities and an increase in insurance premiums were the most significant contributors to the increase in total revenues. Insurance premiums during the three month period ended September 30, 2018 increased $0.5 million or 1.1% from the comparable 2017 period and was primarily the result of an increase in Medicare supplement premiums in the Company’s life and health operations somewhat offset by a decrease in property and casualty premiums. For the nine month period ended September 30, 2018, revenues were $136.4 million, increasing 3.1% from the comparable 2017 period revenues of $132.3 million, primarily as a result of an increase in Medicare supplement premium revenues. Insurance premiums during the nine month period ended September 30, 2018 of $127.6 million increased 3.7% from the comparable 2017 period amount of $123.0 million.

Commenting on the third quarter, Hilton H. Howell, Jr., chairman, president and chief executive officer, stated, “Our senior leadership team at Bankers Fidelity continues to drive efforts focused on improving profitability, enhancing the product portfolio, and delivering superior customer service to our policyholders and agents. Although the year to date Medicare supplement results did not meet expectations, we are encouraged by the continued growth in the life and health operation and are confident strategic rate adjustments implemented throughout the year will result in improved margins. Even though our property and casualty premiums declined slightly, American Southern continues to deliver profitable operating results through prudent underwriting of their programs. While anticipating a good close to the current year, we feel well positioned for a successful 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

Nine Months Ended

September 30,

September 30,

(Unaudited; In thousands, except per share data)

2018

2017

2018

2017

Insurance premiums

Life and health

Gross earned premiums

$

45,568

$

36,671

$

133,158

$

102,502

Ceded premiums

(16,061

)

(8,623

)

(44,853

)

(19,774

)

Net earned premiums

29,507

28,048

88,305

82,728

Property and casualty

Gross earned premiums

14,288

15,284

42,968

43,860

Ceded premiums

(1,238

)

(1,238

)

(3,669

)

(3,592

)

Net earned premiums

13,050

14,046

39,299

40,268

Net investment income

2,215

2,136

7,111

6,380

Realized investment gains, net

484

539

797

2,818

Unrealized gains on equity securities, net

1,083

-

753

-

Other income

31

29

88

95

Total revenue

46,370

44,798

136,353

132,289

Insurance benefits and losses incurred

Life and health

22,415

20,754

69,934

61,567

Property and casualty

10,672

9,663

28,544

25,879

Commissions and underwriting expenses

8,722

10,176

28,456

31,800

Interest expense

529

440

1,497

1,273

Other expense

2,960

3,134

9,168

9,301

Total benefits and expenses

45,298

44,167

137,599

129,820

Income (loss) before income taxes

1,072

631

(1,246

)

2,469

Income tax expense (benefit)

138

(116

)

(341

)

483

Net income (loss)

$

934

$

747

$

(905

)

$

1,986

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

$

0.04

$

0.03

$

(0.06

)

$

0.08

Reconciliation of Non-GAAP Financial Measure

Net income (loss)

$

934

$

747

$

(905

)

$

1,986

Income tax expense (benefit)

138

(116

)

(341

)

483

Realized investment gains, net

(484

)

(539

)

(797

)

(2,818

)

Unrealized gains on equity securities, net

(1,083

)

-

(753

)

-

Operating gain (loss)

$

(495

)

$

92

$

(2,796

)

$

(349

)

September 30,

December 31,

Selected Balance Sheet Data

2018

2017

Total cash and investments

$

255,058

$

272,058

Insurance subsidiaries

234,696

244,754

Parent and other

20,362

27,304

Total assets

339,549

343,239

Insurance reserves and policyholder funds

187,813

173,583

Debt

33,738

33,738

Total shareholders' equity

102,118

112,983

Book value per common share

4.78

5.26

Statutory capital and surplus

Life and health

30,845

34,135

Property and casualty

43,922

43,348