Atlantic American Reports Third Quarter Results
November 10 2020 - 12:42PM
Atlantic American Corporation (Nasdaq- AAME) today reported net
income for the three month period ended September 30, 2020 of $1.9
million, or $0.09 per diluted share, as compared to net loss of
$1.4 million, or $0.07 per diluted share, for the comparable period
in 2019. For the nine month period ended September 30, 2020, the
Company reported net income of $0.3 million, or nil per diluted
share, as compared to net loss of $1.7 million, or $0.10 per
diluted share, for the comparable period in 2019. The increase in
net income during the third quarter of 2020 was primarily due to a
$5.5 million decrease in insurance benefits and losses incurred
somewhat offset by a decrease in unrealized gains on equity
securities of $1.7 million for the third quarter of 2020 as
compared to the third quarter of 2019. The increase in net income
for the nine month period ended September 30, 2020 was primarily
due to a $14.3 million decrease in insurance benefits and losses
incurred mostly offset by a decrease of $9.9 million of net
unrealized gains on equity securities during the nine month period
ended September 30, 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.
Excluding the effects of realized or unrealized
gains or losses and taxes, operating income (as defined below)
increased $5.2 million in the three month period ended September
30, 2020 from the three month period ended September 30, 2019. For
the nine month period ended September 30, 2020, operating income
increased $13.6 million over the comparable period in 2019. The
increase in operating income for the three and nine 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 within the Medicare supplement line of
business. The decrease in number of incurred claims was primarily
attributable to the Company’s individual policy holders being
subject to varying degrees of shelter in place orders instituted
throughout the United States during the second and third quarters
of 2020 as a result of COVID-19.
Commenting on the results, Hilton H. Howell,
Jr., chairman, president and chief executive officer, stated, “I’m
proud to announce we are celebrating 65 years in business for our
Bankers Fidelity Life Insurance subsidiary and have reached nearly
$200 million in annualized gross premium. Rate adequacy in the
Medicare supplement block continues to improve, while expansion of
our ancillary product lines has promoted further diversification of
premium revenue. Our property and casualty operations continue to
do extremely well and we anticipate a good close to the current
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 |
|
Nine Months
Ended |
|
September 30, |
|
September 30, |
(Unaudited; In thousands, except per share data) |
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Insurance
premiums |
|
|
|
|
|
|
|
Life and health |
$ |
30,208 |
|
|
$ |
30,530 |
|
|
$ |
91,511 |
|
|
$ |
92,221 |
|
Property and casualty |
|
14,770 |
|
|
|
14,475 |
|
|
|
45,516 |
|
|
|
43,035 |
|
Insurance premiums,
net |
|
44,978 |
|
|
|
45,005 |
|
|
|
137,027 |
|
|
|
135,256 |
|
|
|
|
|
|
|
|
|
Net
investment income |
|
1,828 |
|
|
|
2,187 |
|
|
|
5,717 |
|
|
|
6,834 |
|
Realized
investment gains (losses), net |
|
183 |
|
|
|
(430 |
) |
|
|
432 |
|
|
|
1,565 |
|
Unrealized
gains (losses) on equity securities, net |
|
(731 |
) |
|
|
944 |
|
|
|
(7,831 |
) |
|
|
2,096 |
|
Other
income |
|
11 |
|
|
|
39 |
|
|
|
71 |
|
|
|
139 |
|
|
|
|
|
|
|
|
|
Total revenue |
|
46,269 |
|
|
|
47,745 |
|
|
|
135,416 |
|
|
|
145,890 |
|
|
|
|
|
|
|
|
|
Insurance
benefits and losses incurred |
|
|
|
|
|
|
|
Life and health |
|
20,088 |
|
|
|
25,279 |
|
|
|
61,192 |
|
|
|
75,831 |
|
Property and casualty |
|
9,131 |
|
|
|
9,440 |
|
|
|
28,686 |
|
|
|
28,346 |
|
Commissions
and underwriting expenses |
|
11,202 |
|
|
|
11,471 |
|
|
|
34,682 |
|
|
|
33,995 |
|
Interest
expense |
|
363 |
|
|
|
533 |
|
|
|
1,253 |
|
|
|
1,624 |
|
Other
expense |
|
3,052 |
|
|
|
2,766 |
|
|
|
9,116 |
|
|
|
8,142 |
|
|
|
|
|
|
|
|
|
Total benefits and expenses |
|
43,836 |
|
|
|
49,489 |
|
|
|
134,929 |
|
|
|
147,938 |
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes |
|
2,433 |
|
|
|
(1,744 |
) |
|
|
487 |
|
|
|
(2,048 |
) |
Income tax
expense (benefit) |
|
557 |
|
|
|
(352 |
) |
|
|
166 |
|
|
|
(392 |
) |
|
|
|
|
|
|
|
|
Net
income (loss) |
$ |
1,876 |
|
|
$ |
(1,392 |
) |
|
$ |
321 |
|
|
$ |
(1,656 |
) |
|
|
|
|
|
|
|
|
Earnings (loss) per common share (basic and
diluted) |
$ |
0.09 |
|
|
$ |
(0.07 |
) |
|
$ |
- |
|
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
1,876 |
|
|
$ |
(1,392 |
) |
|
$ |
321 |
|
|
$ |
(1,656 |
) |
Income tax
expense (benefit) |
|
557 |
|
|
|
(352 |
) |
|
|
166 |
|
|
|
(392 |
) |
Realized
investment (gains) losses, net |
|
(183 |
) |
|
|
430 |
|
|
|
(432 |
) |
|
|
(1,565 |
) |
Unrealized
(gains) losses on equity securities, net |
|
731 |
|
|
|
(944 |
) |
|
|
7,831 |
|
|
|
(2,096 |
) |
|
|
|
|
|
|
|
|
Non-GAAP Operating income (loss) |
$ |
2,981 |
|
|
$ |
(2,258 |
) |
|
$ |
7,886 |
|
|
$ |
(5,709 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
December 31, |
|
|
|
|
Selected Balance Sheet Data |
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash
and investments |
$ |
283,597 |
|
|
$ |
281,530 |
|
|
|
|
|
Insurance subsidiaries |
|
277,516 |
|
|
|
274,730 |
|
|
|
|
|
Parent and other |
|
6,081 |
|
|
|
6,800 |
|
|
|
|
|
Total
assets |
|
384,952 |
|
|
|
377,626 |
|
|
|
|
|
Insurance
reserves and policyholder funds |
|
201,064 |
|
|
|
201,906 |
|
|
|
|
|
Debt |
|
33,738 |
|
|
|
33,738 |
|
|
|
|
|
Total
shareholders' equity |
|
128,015 |
|
|
|
118,394 |
|
|
|
|
|
Book value
per common share |
|
6.00 |
|
|
|
5.51 |
|
|
|
|
|
Statutory
capital and surplus |
|
|
|
|
|
|
|
Life and health |
|
35,725 |
|
|
|
35,546 |
|
|
|
|
|
Property and casualty |
|
46,397 |
|
|
|
45,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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