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Atlantic American Reports Third Quarter Results

ATLANTA, Nov. 12, 2019 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net loss for the three month period ended September 30, 2019 of $1.4 million, or $0.07 per common share, as compared to net income of $0.9 million, or $0.04 per common share, for the comparable period in 2018.  For the nine month period ended September 30, 2019, the Company reported net loss of $1.7 million, or $0.10 per common share, as compared to net loss of $0.9 million, or $0.06 per common share, for the comparable period in 2018.

Premium revenue for the three month period ended September 30, 2019 increased $2.4 million, or 5.8%, to $45.0 million from $42.6 million for the comparable period in 2018.  For the nine month period ended September 30, 2019, premium revenue increased $7.7 million, or 6.0%, to $135.3 million from $127.6 million for the comparable period in 2018.  The increase in premium revenue was primarily attributable to an increase in the Medicare supplement line of business in the Company’s life and health operations, coupled with an increase in the automobile physical damage line of business in the Company’s property and casualty operations.

Excluding the effects of realized or unrealized gains or losses and taxes, operating loss (as defined below) increased to $2.3 million for the three month period ended September 30, 2019, as compared to operating loss of $0.5 million for the comparable period in 2018.  For the nine month period ended September 30, 2019, the Company reported operating loss of $5.7 million, as compared to operating loss of $2.8 million for the comparable period in 2018.  The increase in operating losses for the three and nine month periods ended September 30, 2019 was primarily the result of increased claims in the Medicare supplement line of business in the Company’s life and health operations. 

Commenting on the third quarter, Hilton H. Howell, Jr., chairman, president and chief executive officer, stated, “We are working vigorously to turn our Medicare supplement line of business back to profitability with appropriate rate adjustments coupled with controlled underwriting and distribution.  And sales in the Company’s ancillary lines of business have reached historical highs, primarily as a result of success in the Worksite division.  This is proof positive that our product diversification efforts are bearing fruit.  Additionally, our property and casualty operations continue to steadily grow the business and return profits to the bottom line.”

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)   2019       2018       2019       2018    
Insurance premiums                
Life and health $   30,530     $   29,507     $   92,221     $   88,305    
Property and casualty     14,475         13,050         43,035         39,299    
Insurance premiums, net     45,005         42,557         135,256         127,604    
                 
Net investment income     2,187         2,215         6,834         7,111    
Realized investment gains (losses), net     (430 )       484         1,565         797    
Unrealized gains on equity securities, net     944         1,083         2,096         753    
Other income     39         31         139         88    
                 
Total revenue     47,745         46,370         145,890         136,353    
                 
Insurance benefits and losses incurred                
Life and health     25,279         22,415         75,831         69,934    
Property and casualty     9,440         10,672         28,346         28,544    
Commissions and underwriting expenses     11,471         8,722         33,995         28,456    
Interest expense     533         529         1,624         1,497    
Other expense     2,766         2,960         8,142         9,168    
                 
Total benefits and expenses     49,489         45,298         147,938         137,599    
                 
Income (loss) before income taxes     (1,744 )       1,072         (2,048 )       (1,246 )  
Income tax expense (benefit)     (352 )       138         (392 )       (341 )  
                 
Net income (loss) $   (1,392 )   $   934     $   (1,656 )   $   (905 )  
                 
Earnings (loss) per common share (basic and diluted) $   (0.07 )   $   0.04     $   (0.10 )   $   (0.06 )  
                 
Reconciliation of Non-GAAP Financial Measure                
                 
Net income (loss) $   (1,392 )   $   934     $   (1,656 )   $   (905 )  
Income tax expense (benefit)     (352 )       138         (392 )       (341 )  
Realized investment (gains) losses, net     430         (484 )       (1,565 )       (797 )  
Unrealized gains on equity securities, net     (944 )       (1,083 )       (2,096 )       (753 )  
                 
Non-GAAP Operating gain (loss) $   (2,258 )   $   (495 )   $   (5,709 )   $   (2,796 )  
                 
         
  September 30,    December 31,          
Selected Balance Sheet Data   2019       2018            
                 
Total cash and investments $   283,405     $   254,559            
Insurance subsidiaries     265,289         235,796            
Parent and other     18,116         18,763            
Total assets     383,335         344,274            
Insurance reserves and policyholder funds     198,324         189,048            
Debt     33,738         33,738            
Total shareholders' equity     116,411         101,372            
Book value per common share     5.42         4.75            
Statutory capital and surplus                
Life and health     26,644         34,214            
Property and casualty     45,386         43,467