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Atlantic American Corporation Reports Second Quarter Results for 2022

·4-min read
Atlantic American Corporation
Atlantic American Corporation
  • Net income of $1.2 million for the six month period ended June 30, 2022

  • Operating income of $4.4 million for the six month period ended June 30, 2022

  • Insurance premiums increased $3.1 million, or 9.5%, within the property and casualty operations for the six month period ended June 30, 2022

ATLANTA, Aug. 12, 2022 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net loss for the three month period ended June 30, 2022 of $1.7 million, or $0.09 per diluted share, as compared to net income of $3.0 million, or $0.14 per diluted share, for the comparable period in 2021. For the six month period ended June 30, 2022, the Company reported net income of $1.2 million, or $0.05 per diluted share, as compared to net income of $2.5 million, or $0.11 per diluted share, for the comparable period in 2021. The decrease in net income for the three month and six month periods ended June 30, 2022 was primarily attributable to fluctuations in market values of equity securities, resulting in a decrease in unrealized gains of $8.9 million and $7.4 million, respectively, over the comparable periods in 2021.

Operating income (as defined below) increased $3.1 million in the three month period ended June 30, 2022 from the three month period ended June 30, 2021. For the six month period ended June 30, 2022, operating income increased $6.1 million from the comparable period in 2021. The increase in operating income was primarily due to favorable loss experience in the life and health operations, resulting from an improvement in rate adequacy in the Medicare supplement line of business coupled with an increase in earned premium within the group lines of business.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are delighted to report the marked improvement in operating income for both the quarter and year to date.   Following a number of strategic rate adjustments within our Medicare supplement business, we are beginning to see meaningful improvements in the profitability of that line. Our voluntary benefits division continues to gain ground in the marketplace and we’ve reached a new record in insurance premiums within our property and casualty operations.”

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). We define operating income (loss) as net income (loss) excluding: (i) income tax expense (benefit); (ii) realized investment (gains) losses, net; and (iii) unrealized (gains) losses on equity securities, net. 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 (benefit), 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, including those detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and subsequent statements and reports that Atlantic American Corporation files from time to time 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)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Insurance premiums

 

 

 

 

 

 

 

Life and health

$

28,296

 

 

$

28,771

 

 

$

58,034

 

 

$

58,246

 

Property and casualty

 

18,769

 

 

 

16,362

 

 

 

36,112

 

 

 

32,977

 

Insurance premiums, net

 

47,065

 

 

 

45,133

 

 

 

94,146

 

 

 

91,223

 

 

 

 

 

 

 

 

 

Net investment income

 

2,529

 

 

 

2,266

 

 

 

4,869

 

 

 

4,379

 

Realized investment gains (losses), net

 

(62

)

 

 

50

 

 

 

(72

)

 

 

171

 

Unrealized gains (losses) on equity securities, net

 

(4,866

)

 

 

4,003

 

 

 

(2,673

)

 

 

4,747

 

Other income

 

3

 

 

 

5

 

 

 

7

 

 

 

12

 

 

 

 

 

 

 

 

 

Total revenue

 

44,669

 

 

 

51,457

 

 

 

96,277

 

 

 

100,532

 

 

 

 

 

 

 

 

 

Insurance benefits and losses incurred

 

 

 

 

 

 

 

Life and health

 

18,713

 

 

 

21,546

 

 

 

39,404

 

 

 

43,069

 

Property and casualty

 

14,040

 

 

 

10,157

 

 

 

24,518

 

 

 

21,906

 

Commissions and underwriting expenses

 

10,215

 

 

 

12,179

 

 

 

23,051

 

 

 

24,743

 

Interest expense

 

414

 

 

 

347

 

 

 

768

 

 

 

693

 

Other expense

 

3,402

 

 

 

3,474

 

 

 

6,855

 

 

 

6,914

 

 

 

 

 

 

 

 

 

Total benefits and expenses

 

46,784

 

 

 

47,703

 

 

 

94,596

 

 

 

97,325

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(2,115

)

 

 

3,754

 

 

 

1,681

 

 

 

3,207

 

Income tax expense (benefit)

 

(436

)

 

 

792

 

 

 

518

 

 

 

676

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(1,679

)

 

$

2,962

 

 

$

1,163

 

 

$

2,531

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share (basic)

$

(0.09

)

 

$

0.14

 

 

$

0.05

 

 

$

0.11

 

Earnings (loss) per common share (diluted)

$

(0.09

)

 

$

0.14

 

 

$

0.05

 

 

$

0.11

 

 

 

 

 

 

 

 

 

Reconciliation of Non-GAAP Financial Measure

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(1,679

)

 

$

2,962

 

 

$

1,163

 

 

$

2,531

 

Income tax expense (benefit)

 

(436

)

 

 

792

 

 

 

518

 

 

 

676

 

Realized investment (gains) losses, net

 

62

 

 

 

(50

)

 

 

72

 

 

 

(171

)

Unrealized (gains) losses on equity securities, net

 

4,866

 

 

 

(4,003

)

 

 

2,673

 

 

 

(4,747

)

 

 

 

 

 

 

 

 

Non-GAAP Operating income (loss)

$

2,813

 

 

$

(299

)

 

$

4,426

 

 

$

(1,711

)

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

December 31,

 

 

 

Selected Balance Sheet Data

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash and investments

$

259,845

 

 

$

308,195

 

 

 

 

 

Insurance subsidiaries

 

254,032

 

 

 

302,302

 

 

 

 

 

Parent and other

 

5,813

 

 

 

5,893

 

 

 

 

 

Total assets

 

379,274

 

 

 

402,286

 

 

 

 

 

Insurance reserves and policyholder funds

 

211,874

 

 

 

201,797

 

 

 

 

 

Debt

 

34,738

 

 

 

33,738

 

 

 

 

 

Total shareholders' equity

 

109,101

 

 

 

141,286

 

 

 

 

 

Book value per common share

 

5.08

 

 

 

6.66

 

 

 

 

 

Statutory capital and surplus

 

 

 

 

 

 

 

Life and health

 

35,946

 

 

 

38,625

 

 

 

 

 

Property and casualty

 

52,534

 

 

 

52,724