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Atlantic American Reports Third Quarter Results

  • 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