Atlantic American Corporation (Nasdaq- AAME) today reported net income for the three month period ended June 30, 2021 of $3.0 million, or $0.14 per diluted share, as compared to net income of $6.5 million, or $0.30 per diluted share, for the comparable period in 2020. For the six month period ended June 30, 2021, the Company reported net income of $2.5 million, or $0.11 per diluted share, as compared to net loss of $1.6 million, or $0.09 per diluted share, for the comparable period in 2020. The decrease in net income during the second quarter of 2021 was primarily due to a $4.5 million increase in life and health insurance benefits and losses incurred. Such increase was largely the result of higher utilization of policy benefits as compared to the unusually low levels experienced in 2020 during the COVID-19 shelter in place restrictions imposed on our policyholders. The increase in net income for the six month period ended June 30, 2021 was primarily due to $4.7 million of net unrealized gains on equity securities as compared to $7.1 million of unrealized losses on equity securities during the comparable period in 2020. 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) decreased $7.2 million in the three month period ended June 30, 2021 from the three month period ended June 30, 2020. For the six month period ended June 30, 2021, operating income decreased $6.6 million from the comparable period in 2020. The decrease in operating income for the three and six month periods was primarily due to less favorable loss experience in the life and health operations, resulting from a significant increase in the number of incurred claims within the Medicare supplement line of business, as mentioned above.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are extremely pleased with the new premium growth this year in our property and casualty operations. Despite the challenges faced over the most recent year related to the COVID-19 pandemic, that business has prospered exceedingly well. We continue to refine the underwriting on our Medicare supplement business and have made targeted investments in the life and health operations to better serve the needs of our customers. The second half of the year is when the majority of enrollment periods begin in both the individual and group markets, which we believe we are well positioned to serve. We anticipate a strong finish for the balance of this year.”

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   Six Months Ended
  June 30,   June 30,
(Unaudited; In thousands, except per share data)   2021       2020       2021       2020  
Insurance premiums              
    Life and health $ 28,771     $ 30,675     $ 58,246     $ 61,303  
    Property and casualty   16,362       15,824       32,977       30,746  
        Insurance premiums, net   45,133       46,499       91,223       92,049  
               
Net investment income   2,266       1,850       4,379       3,889  
Realized investment gains, net   50       -       171       249  
Unrealized gains (losses) on equity securities, net   4,003       1,355       4,747       (7,100 )
Other income   5       33       12       60  
               
Total revenue   51,457       49,737       100,532       89,147  
               
Insurance benefits and losses incurred              
    Life and health   21,546       17,055       43,069       41,104  
    Property and casualty   10,157       10,021       21,906       19,555  
Commissions and underwriting expenses   12,179       10,854       24,743       23,480  
Interest expense   347       414       693       890  
Other expense   3,474       3,112       6,914       6,064  
               
  Total benefits and expenses   47,703       41,456       97,325       91,093  
               
Income (loss) before income taxes   3,754       8,281       3,207       (1,946 )
Income tax expense (benefit)   792       1,749       676       (391 )
               
Net income (loss) $ 2,962     $ 6,532     $ 2,531     $ (1,555 )
               
Earnings (loss) per common share (basic) $ 0.14     $ 0.31     $ 0.11     $ (0.09 )
Earnings (loss) per common share (diluted) $ 0.14     $ 0.30     $ 0.11     $ (0.09 )
               
Reconciliation of Non-GAAP Financial Measure              
               
Net income (loss) $ 2,962     $ 6,532     $ 2,531     $ (1,555 )
Income tax expense (benefit)   792       1,749       676       (391 )
Realized investment gains, net   (50 )     -       (171 )     (249 )
Unrealized (gains) losses on equity securities, net   (4,003 )     (1,355 )     (4,747 )     7,100  
               
Non-GAAP Operating income (loss) $ (299 )   $ 6,926     $ (1,711 )   $ 4,905  
  June 30,   December 31,
Selected Balance Sheet Data   2021       2020  
       
Total cash and investments $ 295,556     $ 298,630  
    Insurance subsidiaries   290,189       292,478  
    Parent and other   5,367       6,152  
Total assets   404,486       405,187  
Insurance reserves and policyholder funds   205,873       198,676  
Debt   33,738       33,738  
Total shareholders' equity   142,375       145,060  
Book value per common share   6.71       6.84  
Statutory capital and surplus      
    Life and health   41,690       42,326  
    Property and casualty   50,017       50,194  
       
Atlantic American (NASDAQ:AAME)
Historical Stock Chart
From Sep 2021 to Oct 2021 Click Here for more Atlantic American Charts.
Atlantic American (NASDAQ:AAME)
Historical Stock Chart
From Oct 2020 to Oct 2021 Click Here for more Atlantic American Charts.