GlobeNewswire Inc | Mar 23, 2021 12:52PM EDT

March 23, 2021

ATLANTA, March 23, 2021 (GLOBE NEWSWIRE) -- 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 Companys 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 Companys 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 Boards decision to reinstate the Companys 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 Companys operating results (such as any realized and unrealized investment gains (losses), which are not a part of the Companys 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 Companys 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 & CEOAtlantic American Corporation Atlantic American Corporation404-266-5580 404-266-5505

Atlantic American CorporationFinancial Data

Three Months Ended Twelve Months Ended December 31, December 31,(Unaudited; In thousands, 2020 2019 2020 2019 except per share data)Insurance premiums Life and health $ 29,656 $ 31,024 $ 121,167 $ 123,245 Property and 16,856 15,645 62,372 58,680 casualtyInsurance 46,512 46,669 183,539 181,925 premiums, net Net investment income 2,027 2,145 7,744 8,979 Realized investment 6,988 9 7,420 1,574 gains, netUnrealized gains (losses) 4,400 3,415 (3,431 ) 5,511 on equity securities, netOther income 5 51 76 190 Total revenue 59,932 52,289 195,348 198,179 Insurance benefits and losses incurredLife and health 19,345 23,853 80,537 99,684 Property and 10,653 11,195 39,339 39,541 casualtyCommissions and 12,129 11,482 46,811 45,477 underwriting expensesInterest expense 357 506 1,610 2,130 Other expense 2,432 3,612 11,548 11,754 Total benefits and 44,916 50,648 179,845 198,586 expenses Income (loss) before 15,016 1,641 15,503 (407 )income taxesIncome tax expense 3,168 371 3,334 (21 )(benefit) Net income (loss) $ 11,848 $ 1,270 $ 12,169 $ (386 ) Earnings (loss) per $ 0.58 $ 0.06 $ 0.58 $ (0.04 )common share (basic)Earnings (loss) per $ 0.54 $ 0.06 $ 0.56 $ (0.04 )common share (diluted) Reconciliation ofNon-GAAP Financial Measure Net income (loss) $ 11,848 $ 1,270 $ 12,169 $ (386 )Income tax expense 3,168 371 3,334 (21 )(benefit)Realized investment (6,988 ) (9 ) (7,420 ) (1,574 )gains, netUnrealized (gains) losses (4,400 ) (3,415 ) 3,431 (5,511 )on equity securities, net Non-GAAP Operating income $ 3,628 $ (1,783 ) $ 11,514 $ (7,492 )(loss) December 31, December 31, Selected Balance Sheet 2020 2019 Data Total cash and $ 298,630 $ 281,530 investmentsInsurance 292,478 274,730 subsidiariesParent and other 6,152 6,800 Total assets 405,187 377,626 Insurance reserves and 198,676 201,906 policyholder fundsDebt 33,738 33,738 Total shareholders' 145,060 118,394 equityBook value per common 6.84 5.51 shareStatutory capital and surplusLife and health 42,326 35,546 Property and 50,194 45,827 casualty