Atlantic American Corporation Reports First Quarter Results for 2019
May 13 2019 - 10:02AM
Atlantic American Corporation (Nasdaq- AAME) today reported net
income of $4.2 million in the first quarter of 2019 compared to a
net loss of $5.0 million in the first quarter of 2018. The
increase in net income is primarily the result of unrealized gains
on equity securities of $6.5 million in the current quarter
compared to unrealized losses on equity securities of $4.4 million
in the prior year quarter. Excluding the effects of realized
or unrealized gains or losses and taxes, operating loss (as defined
below) increased to $2.6 million in the current year quarter from
$2.3 million in the prior year quarter, primarily as a result of
unfavorable loss experience in the Medicare supplement line of
business in the Company’s life and health operations. Total
insurance premiums increased 6.1% to $44.8 million in the current
year quarter compared to $42.2 million in the prior year quarter,
with increases in insurance premiums reported in both the Company’s
life and health and property and casualty operations.
Commenting on the quarterly results, Hilton H.
Howell, Jr., chairman, president and chief executive officer,
stated, “Our property and casualty operations continue to perform
exceptionally well and they are on track for another year of
premium growth. While the first quarter is typically the most
challenging in the life and health operations due to early season
Medicare supplement Part B deductible reimbursements, we trust the
performance of that product line will see improvement over the
balance of the year. Additionally, we are delighted to
announce two key hires within our life and health executive sales
team who collectively bring us over four decades of experience in
both the individual and group product portfolio. We remain
optimistic about the future growth and profitability of our
companies.”
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
operational results (such as any realized and unrealized investment
gains, 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 |
|
March 31, |
(Unaudited; In thousands, except per share data) |
|
2019 |
|
|
|
2018 |
|
Insurance premiums |
|
|
|
|
|
|
|
Life and health |
|
|
|
|
|
|
|
Gross earned premiums |
$ |
48,461 |
|
|
$ |
43,311 |
|
Ceded premiums |
|
(17,485 |
) |
|
|
(13,816 |
) |
Net earned premiums |
|
30,976 |
|
|
|
29,495 |
|
Property and casualty |
|
|
|
|
|
|
|
Gross earned premiums |
|
15,181 |
|
|
|
13,910 |
|
Ceded premiums |
|
(1,375 |
) |
|
|
(1,203 |
) |
Net earned premiums |
|
13,806 |
|
|
|
12,707 |
|
|
|
|
|
|
|
|
|
Insurance premiums, net |
|
44,782 |
|
|
|
42,202 |
|
Net investment income |
|
2,334 |
|
|
|
2,359 |
|
Realized investment gains,
net |
|
1,385 |
|
|
|
370 |
|
Unrealized gains (losses) on
equity securities, net |
|
6,489 |
|
|
|
(4,419 |
) |
Other income |
|
28 |
|
|
|
28 |
|
|
|
|
|
|
|
|
|
Total
revenue |
|
55,018 |
|
|
|
40,540 |
|
|
|
|
|
|
|
|
|
Insurance benefits and losses
incurred |
|
|
|
|
|
|
|
Life and health |
|
26,264 |
|
|
|
23,995 |
|
Property and casualty |
|
9,043 |
|
|
|
9,177 |
|
Commissions and underwriting
expenses |
|
11,015 |
|
|
|
10,019 |
|
Interest expense |
|
546 |
|
|
|
462 |
|
Other expense |
|
2,865 |
|
|
|
3,238 |
|
|
|
|
|
|
|
|
|
Total benefits and expenses |
|
49,733 |
|
|
|
46,891 |
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes |
|
5,285 |
|
|
|
(6,351 |
) |
Income tax expense
(benefit) |
|
1,123 |
|
|
|
(1,327 |
) |
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
4,162 |
|
|
$ |
(5,024 |
) |
|
|
|
|
|
|
|
|
Earnings (loss) per
common share (basic) |
$ |
0.20 |
|
|
$ |
(0.25 |
) |
Earnings (loss) per
common share (diluted) |
$ |
0.19 |
|
|
$ |
(0.25 |
) |
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Financial Measure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
4,162 |
|
|
$ |
(5,024 |
) |
Income tax expense
(benefit) |
|
1,123 |
|
|
|
(1,327 |
) |
Realized investment gains,
net |
|
(1,385 |
) |
|
|
(370 |
) |
Unrealized (gains) losses on
equity securities, net |
|
(6,489 |
) |
|
|
4,419 |
|
|
|
|
|
|
|
|
|
Non-GAAP operating
loss |
$ |
(2,589 |
) |
|
$ |
(2,302 |
) |
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
Selected Balance Sheet
Data |
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
Total cash and
investments |
$ |
262,359 |
|
|
$ |
254,559 |
|
Insurance subsidiaries |
|
241,025 |
|
|
|
235,796 |
|
Parent and other |
|
21,334 |
|
|
|
18,763 |
|
Total assets |
|
354,244 |
|
|
|
344,274 |
|
Insurance reserves and
policyholder funds |
|
184,281 |
|
|
|
189,048 |
|
Debt |
|
33,738 |
|
|
|
33,738 |
|
Total shareholders'
equity |
|
111,487 |
|
|
|
101,372 |
|
Book value per common
share |
|
5.26 |
|
|
|
4.75 |
|
Statutory capital and
surplus |
|
|
|
|
|
|
|
Life and health |
|
33,176 |
|
|
|
34,214 |
|
Property and casualty |
|
44,766 |
|
|
|
43,467 |
|
|
|
|
|
|
|
|
|
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