Atlantic American Corporation Reports Fourth Quarter and Year End Results for 2020; Declares Annual Dividend
March 23 2021 - 12:51PM
Atlantic American Corporation (Nasdaq- AAME) today reported net
income for the three month period ended December 31, 2020 of $11.8
million, or $0.54 per diluted share, as compared to net income of
$1.3 million, or $0.06 per diluted share, for the comparable period
in 2019. For the year ended December 31, 2020, the Company reported
net income of $12.2 million, or $0.56 per diluted share, as
compared to net loss of $0.4 million, or $0.04 per diluted share,
for the comparable period in 2019. The increase in net income
during the fourth quarter of 2020 was primarily due to a $7.0
million increase in realized gains coupled with a $5.1 million
decrease in insurance benefits and losses incurred for the fourth
quarter of 2020 as compared to the comparable quarter of 2019. The
increase in net income for the year ended December 31, 2020 was
primarily due to a $19.3 million decrease in insurance benefits and
losses incurred and a $5.8 million increase in realized gains,
somewhat offset by a decrease of $8.9 million of net unrealized
gains and losses on equity securities during the year ended
December 31, 2020 as compared to the comparable period in 2019.
Changes in unrealized gains and losses on equity securities for the
applicable periods are primarily the result of fluctuations in the
market values of the Company’s equity investments.
Operating income (as defined below) increased to
$3.6 million in the three month period ended December 31, 2020 as
compared to a $1.8 million operating loss for the three month
period ended December 31, 2019. For the year ended December 31,
2020, operating income increased to $11.5 million over an operating
loss of $7.5 million for the comparable period in 2019. The
increase in operating income for the three and twelve month periods
was primarily due to improved loss experience in the Company’s life
and health operations, resulting from a significant decrease in the
number of incurred claims and improved rate adequacy within the
Medicare supplement line of business. The decrease in the number of
incurred claims was primarily attributable to lower utilization of
medical services by our policyholders as a result of the COVID-19
pandemic.
Commenting on the results, Hilton H. Howell,
Jr., Chairman, President and Chief Executive Officer, stated, “We
are exceptionally encouraged by the strong operating results
reported by our family of insurance companies. Despite the many
uncertainties we were faced with in 2020 due to the COVID-19
pandemic and many of our employees shifting to a work-from-home
environment, we overcame the challenges and have recently resumed
in-person operations for the majority of our staff. Our insurance
subsidiaries reported record financial results and we are excited
about the prospects for this upcoming year. In recognition of an
outstanding earnings report and our commitment to delivering value
to our shareholders, we are pleased to announce our Board’s
decision to reinstate the Company’s annual dividend in the amount
of $0.02 per share, which is payable on April 27, 2021 to
shareholders of record on April 13, 2021.” 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 |
|
Twelve Months
Ended |
|
December 31, |
|
December 31, |
(Unaudited; In thousands, except per share data) |
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Insurance
premiums |
|
|
|
|
|
|
|
Life and health |
$ |
29,656 |
|
|
$ |
31,024 |
|
|
$ |
121,167 |
|
|
$ |
123,245 |
|
Property and casualty |
|
16,856 |
|
|
|
15,645 |
|
|
|
62,372 |
|
|
|
58,680 |
|
Insurance premiums,
net |
|
46,512 |
|
|
|
46,669 |
|
|
|
183,539 |
|
|
|
181,925 |
|
|
|
|
|
|
|
|
|
Net
investment income |
|
2,027 |
|
|
|
2,145 |
|
|
|
7,744 |
|
|
|
8,979 |
|
Realized
investment gains, net |
|
6,988 |
|
|
|
9 |
|
|
|
7,420 |
|
|
|
1,574 |
|
Unrealized
gains (losses) on equity securities, net |
|
4,400 |
|
|
|
3,415 |
|
|
|
(3,431 |
) |
|
|
5,511 |
|
Other
income |
|
5 |
|
|
|
51 |
|
|
|
76 |
|
|
|
190 |
|
|
|
|
|
|
|
|
|
Total revenue |
|
59,932 |
|
|
|
52,289 |
|
|
|
195,348 |
|
|
|
198,179 |
|
|
|
|
|
|
|
|
|
Insurance
benefits and losses incurred |
|
|
|
|
|
|
|
Life and health |
|
19,345 |
|
|
|
23,853 |
|
|
|
80,537 |
|
|
|
99,684 |
|
Property and casualty |
|
10,653 |
|
|
|
11,195 |
|
|
|
39,339 |
|
|
|
39,541 |
|
Commissions
and underwriting expenses |
|
12,129 |
|
|
|
11,482 |
|
|
|
46,811 |
|
|
|
45,477 |
|
Interest
expense |
|
357 |
|
|
|
506 |
|
|
|
1,610 |
|
|
|
2,130 |
|
Other
expense |
|
2,432 |
|
|
|
3,612 |
|
|
|
11,548 |
|
|
|
11,754 |
|
|
|
|
|
|
|
|
|
Total benefits and expenses |
|
44,916 |
|
|
|
50,648 |
|
|
|
179,845 |
|
|
|
198,586 |
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes |
|
15,016 |
|
|
|
1,641 |
|
|
|
15,503 |
|
|
|
(407 |
) |
Income tax
expense (benefit) |
|
3,168 |
|
|
|
371 |
|
|
|
3,334 |
|
|
|
(21 |
) |
|
|
|
|
|
|
|
|
Net
income (loss) |
$ |
11,848 |
|
|
$ |
1,270 |
|
|
$ |
12,169 |
|
|
$ |
(386 |
) |
|
|
|
|
|
|
|
|
Earnings (loss) per common share (basic) |
$ |
0.58 |
|
|
$ |
0.06 |
|
|
$ |
0.58 |
|
|
$ |
(0.04 |
) |
Earnings (loss) per common share (diluted) |
$ |
0.54 |
|
|
$ |
0.06 |
|
|
$ |
0.56 |
|
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
11,848 |
|
|
$ |
1,270 |
|
|
$ |
12,169 |
|
|
$ |
(386 |
) |
Income tax
expense (benefit) |
|
3,168 |
|
|
|
371 |
|
|
|
3,334 |
|
|
|
(21 |
) |
Realized
investment gains, net |
|
(6,988 |
) |
|
|
(9 |
) |
|
|
(7,420 |
) |
|
|
(1,574 |
) |
Unrealized
(gains) losses on equity securities, net |
|
(4,400 |
) |
|
|
(3,415 |
) |
|
|
3,431 |
|
|
|
(5,511 |
) |
|
|
|
|
|
|
|
|
Non-GAAP Operating income (loss) |
$ |
3,628 |
|
|
$ |
(1,783 |
) |
|
$ |
11,514 |
|
|
$ |
(7,492 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
Selected Balance Sheet Data |
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash
and investments |
$ |
298,630 |
|
|
$ |
281,530 |
|
|
|
|
|
Insurance subsidiaries |
|
292,478 |
|
|
|
274,730 |
|
|
|
|
|
Parent and other |
|
6,152 |
|
|
|
6,800 |
|
|
|
|
|
Total
assets |
|
405,187 |
|
|
|
377,626 |
|
|
|
|
|
Insurance
reserves and policyholder funds |
|
198,676 |
|
|
|
201,906 |
|
|
|
|
|
Debt |
|
33,738 |
|
|
|
33,738 |
|
|
|
|
|
Total
shareholders' equity |
|
145,060 |
|
|
|
118,394 |
|
|
|
|
|
Book value
per common share |
|
6.84 |
|
|
|
5.51 |
|
|
|
|
|
Statutory
capital and surplus |
|
|
|
|
|
|
|
Life and health |
|
42,326 |
|
|
|
35,546 |
|
|
|
|
|
Property and casualty |
|
50,194 |
|
|
|
45,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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