EX-99.1 2 brhc10014220_ex99-1.htm EXHIBIT 99.1
Exhibit 99.1

ATLANTIC AMERICAN CORPORATION REPORTS
SECOND QUARTER RESULTS FOR 2020

ATLANTA, Georgia, August 11, 2020 - Atlantic American Corporation (Nasdaq- AAME) today reported net income for the three month period ended June 30, 2020 of $6.5 million, or $0.30 per diluted share, as compared to net loss of $4.4 million, or $0.22 per diluted share, for the comparable period in 2019.  For the six month period ended June 30, 2020, the Company reported net loss of $1.6 million, or $0.09 per diluted share, as compared to net loss of $0.3 million, or $0.02 per diluted share, for the comparable period in 2019.  The increase in net income during the second quarter of 2020 was primarily due to a $7.3 million decrease in total benefits and expenses coupled with an increase in unrealized gains on equity securities of $6.7 million for the second quarter of 2020 as compared to the second quarter of 2019.  The net loss for the six month period ended June 30, 2020 was primarily due to $7.1 million of net unrealized losses on equity securities during the six month period ended June 30, 2020 as compared to $1.2 million of unrealized gains on equity securities during 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 $7.8 million in the three month period ended June 30, 2020 from the three month period ended June 30, 2019.  For the six month period ended June 30, 2020, operating income increased $8.4 million over the comparable period in 2019.  The increase in operating income was primarily due to favorable 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.  This decrease in the 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 quarter of 2020 as a result of COVID-19.

Commenting on the results, Hilton H. Howell, Jr., chairman, president and chief executive officer, stated, “I am delighted with the performance of each of our operating segments and proud to report the return to operating income for the year.  Our BankersWorksite® division is on track for a record year of new sales which will further promote our diversification efforts.  Additionally, our property and casualty operations continue to perform well and had one of the best quarters on record. Our Company remains strong and firmly committed to delivering our superior service to policyholders, employers, and agents in these unprecedented times.”

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 Corporation
Financial Data

   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
(Unaudited; In thousands, except per share data)
  
2020
    
2019
    
2020
    
2019
  
Insurance premiums
                        
Life and health
  
$
30,675
    
$
30,715
    
$
61,303
    
$
61,691
  
Property and casualty
    
15,824
      
14,754
      
30,746
      
28,560
  
Insurance premiums, net
    
46,499
      
45,469
      
92,049
      
90,251
  
                                 
Net investment income
    
1,850
      
2,313
      
3,889
      
4,647
  
Realized investment gains, net
    
-
      
610
      
249
      
1,995
  
Unrealized gains (losses) on equity securities, net
    
1,355
      
(5,337
)
    
(7,100
)
    
1,152
  
Other income
    
33
      
72
      
60
      
100
  
                                 
Total revenue
    
49,737
      
43,127
      
89,147
      
98,145
  
                                 
Insurance benefits and losses incurred
                                
Life and health
    
17,055
      
24,288
      
41,104
      
50,552
  
Property and casualty
    
10,021
      
9,863
      
19,555
      
18,906
  
Commissions and underwriting expenses
    
10,854
      
11,509
      
23,480
      
22,524
  
Interest expense
    
414
      
545
      
890
      
1,091
  
Other expense
    
3,112
      
2,511
      
6,064
      
5,376
  
                                 
Total benefits and expenses
    
41,456
      
48,716
      
91,093
      
98,449
  
                                 
Income (loss) before income taxes
    
8,281
      
(5,589
)
    
(1,946
)
    
(304
)
Income tax expense (benefit)
    
1,749
      
(1,163
)
    
(391
)
    
(40
)
                                 
Net income (loss)
  
$
6,532
    
$
(4,426
)
  
$
(1,555
)
  
$
(264
)
                                 
Earnings (loss) per common share (basic)
  
$
0.31
    
$
(0.22
)
  
$
(0.09
)
  
$
(0.02
)
Earnings (loss) per common share (diluted)
  
$
0.30
    
$
(0.22
)
  
$
(0.09
)
  
$
(0.02
)
                                 
Reconciliation of Non-GAAP Financial Measure
                                
                                 
Net income (loss)
  
$
6,532
    
$
(4,426
)
  
$
(1,555
)
  
$
(264
)
Income tax expense (benefit)
    
1,749
      
(1,163
)
    
(391
)
    
(40
)
Realized investment gains, net
    
-
      
(610
)
    
(249
)
    
(1,995
)
Unrealized (gains) losses on equity securities, net
    
(1,355
)
    
5,337
      
7,100
      
(1,152
)
                                 
Non-GAAP Operating income (loss)
  
$
6,926
    
$
(862
)
  
$
4,905
    
$
(3,451
)

Selected Balance Sheet Data
  
June 30,
2020
    
December 31,
2019
  
             
Total cash and investments
  
$
283,254
    
$
281,530
  
Insurance subsidiaries
    
276,585
      
274,730
  
Parent and other
    
6,669
      
6,800
  
Total assets
    
385,737
      
377,626
  
Insurance reserves and policyholder funds
    
204,711
      
201,906
  
Debt
    
33,738
      
33,738
  
Total shareholders' equity
    
123,894
      
118,394
  
Book value per common share
    
5.79
      
5.51
  
Statutory capital and surplus
                
Life and health
    
34,735
      
35,546
  
Property and casualty
    
45,927
      
45,827