Atlantic American Reports Third Quarter Results

Date : 11/12/2019 @ 7:08PM
Source : GlobeNewswire Inc.
Stock : Atlantic American Corporation (AAME)
Quote : 1.9  0.0 (0.00%) @ 10:59PM

Atlantic American Reports Third Quarter Results

Atlantic American (NASDAQ:AAME)
Historical Stock Chart

3 Months : From Oct 2019 to Jan 2020

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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 CorporationFinancial 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      
         

 

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