Market Overview

Atlantic American Reports Second Quarter Results

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  • Net income for the three month period ended June 30, 2018 increased to $3.2 million as compared to $1.5 million in the comparable period in 2017
  • Insurance premiums increased to $42.8 million, or 6.8%, compared to $40.1 million for the three month periods ended June 30, 2018 and 2017, respectively

ATLANTA, Aug. 14, 2018 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net income for the three month period ended June 30, 2018 of $3.2 million, or $0.15 per share, as compared to $1.5 million, or $0.07 per share, for the comparable period of 2017.  For the six month period ended June 30, 2018 the company reported a net loss of $1.8 million, or $0.10 per share, compared to net income of $1.2 million, or $0.05 per share, in the comparable period of 2017.  The increase in net income during the second quarter of 2018 was primarily due to the impact of an accounting standard adopted January 1, 2018.  This accounting standard requires changes in the fair value of investments in equity securities to be reported in net income on the statement of operations, which resulted in a $4.1 million impact in the 2018 period.  Under previous accounting guidelines, and as reported for the 2017 periods, such changes were recognized in other comprehensive income on the balance sheet.  The net loss for the six month period ended June 30, 2018 was primarily a result of operating losses in the life and health operation.

Total revenues for the three month period ended June 30, 2018 were $49.4 million as compared to $43.6 million for the three month period ended June 30, 2017.  Unrealized gains on equity securities and an increase in insurance premiums were the most significant contributors to the increase in total revenues.  Insurance premiums during the three month period ended June 30, 2018 increased $2.7 million, or 6.8%, from the comparable 2017 period, primarily the result of an increase in Medicare supplement premium in the Company's life and health operation.  For the six month period ended June 30, 2018, revenues were $90.0 million, increasing 2.8% from the comparable 2017 period revenues of $87.5 million, also primarily as a result of an increase in Medicare supplement premium revenues.  Insurance premiums during the six month period ended June 30, 2018 of $85.0 million increased 5.1% from the comparable 2017 period amount of $80.9 million.

Commenting on the quarter, Hilton H. Howell, Jr., chairman, president and chief executive officer, stated, "Bankers Fidelity's continued growth not only demonstrates elevated sales activity but serves as testament to the vital relationships and brand loyalty we have cultivated with our insurance producers.  While we continue to enjoy net premium growth in the life and health operation our focus remains on judicious management of the quality of our business, further diversifying our product portfolio and improving operating results.  The property and casualty operation continues to perform exceptionally well and we are pleased to report American Southern ended the first six months of 2018 with an increase in premium income over the comparable period of 2017."

Atlantic American 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 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   Six Months Ended
  June 30,   June 30,
(Unaudited; In thousands, except per share data) 2018
  2017
  2018
  2017
Insurance premiums              
Life and health $ 29,303     $ 26,989     $ 58,798     $ 54,680  
Property and casualty   13,542       13,131       26,249       26,222  
Investment income   2,537       2,085       4,896       4,244  
Realized investment gains (losses), net   (57 )     1,396       313       2,279  
Unrealized gains (losses) on equity securities, net   4,089       -       (330 )     -  
Other income   29       31       57       66  
               
Total revenue     49,443         43,632         89,983         87,491  
               
Insurance benefits and losses incurred              
Life and health   23,524       19,100       47,519       40,813  
Property and casualty   8,695       7,932       17,872       16,216  
Commissions and underwriting expenses   9,715       11,010       19,734       21,624  
Interest expense   506       424       968       833  
Other expense   2,970       2,981       6,208       6,167  
               
Total benefits and expenses   45,410       41,447       92,301       85,653  
               
Income (loss) before income taxes   4,033       2,185       (2,318 )     1,838  
Income tax expense (benefit)   848       725       (479 )     599  
               
Net income (loss) $    3,185     $    1,460     $    (1,839 )   $    1,239  
               
Earnings (loss) per common share (basic and diluted) $    0.15     $    0.07     $    (0.10 )   $    0.05  
               
Reconciliation of Non-GAAP Financial Measure              
               
Net income (loss) $ 3,185     $ 1,460     $ (1,839 )   $ 1,239  
Income tax expense (benefit)   848       725       (479 )     599  
Realized investment gains (losses), net   57       (1,396 )     (313 )     (2,279 )
Unrealized gains (losses) on equity securities, net   (4,089 )     -       330       -  
               
Operating income (loss) $    1     $    789     $    (2,301 )   $    (441 )
         
 
  June 30,   December 31,  
Selected Balance Sheet Data 2018
  2017
 
         
Total cash and investments $ 254,201     $ 272,058    
Insurance subsidiaries   235,055       244,754    
Parent and other   19,146       27,304    
Total assets   341,655       343,239    
Insurance reserves and policyholder funds   191,420       173,583    
Debt   33,738       33,738    
Total shareholders' equity   101,667       112,983    
Book value per common share   4.75       5.26    
Statutory capital and surplus        
Life and health   31,688       34,135    
Property and casualty   43,878       43,348    
     

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