GlobeNewswire Inc | Nov 10, 2021 10:18AM EST

November 10, 2021

ATLANTA, Nov. 10, 2021 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net loss for the three month period ended September 30, 2021 of $0.9 million, or $0.05 per diluted share, as compared to net income of $1.9 million, or $0.09 per diluted share, for the comparable period in 2020. For the nine month period ended September 30, 2021, the Company reported net income of $1.6 million, or $0.06 per diluted share, as compared to net income of $0.3 million, or nil per diluted share, for the comparable period in 2020. The decrease in net income during the third quarter of 2021 was primarily due to a $5.8 million increase in insurance benefits and losses incurred, somewhat offset by an increase in unrealized gains on equity securities of $1.4 million for the third quarter of 2021 as compared to the third quarter of 2020. The increase in net income for the nine month period ended September 30, 2021 was primarily due to an increase of $13.3 million in net unrealized gains on equity securities largely offset by an increase in insurance benefits and losses incurred of $10.1 million during the nine month period ended September 30, 2021 as compared to the third quarter of 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 Companys equity investments.

Excluding the effects of realized or unrealized gains or losses and taxes, the Company reported operating loss (as defined below) of $2.4 million for the three month period ended September 30, 2021 as compared to $3.0 million operating income for the three month period ended September 30, 2020. For the nine month period ended September 30, 2021, the Company reported operating loss of $4.1 million as compared to operating income of $7.9 million in the comparable period in 2020. The decrease in operating income for the three and nine month periods was primarily due to an increase in insurance benefits and losses in the Companys life and health operations, predominantly as a result of claims within the Medicare supplement line of business. During 2021, utilization of Medicare supplement insurance benefits has increased, returning to historical averages relative to the exceptionally low utilization experienced after the onset of the COVID-19 pandemic when many policyholders were sheltered in place.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, We are pleased to report the premium growth in our property and casualty operation has continued, with a historic high reached for the third quarter. As a result of their selective underwriting, our property and casualty operation continues to perform quite well. While our life and health operation faced a challenging quarter due to increasing demand for health care services, a series of strategic pricing adjustments in our Medicare supplement product is expected to improve profit margins on that business. 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 Nine Months Ended September 30, September 30,(Unaudited; Inthousands, 2021 2020 2021 2020 except pershare data)Insurance premiumsLife and $ 28,772 $ 30,208 $ 87,018 $ 91,511 healthProperty and 17,320 14,770 50,297 45,516 casualtyInsurance 46,092 44,978 137,315 137,027 premiums, net Net investment 2,137 1,828 6,516 5,717 incomeRealizedinvestment 349 183 520 432 gains, netUnrealizedgains (losses)on equity 711 (731 ) 5,458 (7,831 )securities,netOther income 1 11 13 71 Total revenue 49,290 46,269 149,822 135,416 Insurancebenefits and lossesincurredLife and 23,394 20,088 66,463 61,192 healthProperty and 11,651 9,131 33,557 28,686 casualtyCommissionsand 11,927 11,202 36,670 34,682 underwritingexpensesInterest 347 363 1,040 1,253 expenseOther expense 3,264 3,052 10,178 9,116 Total benefits 50,583 43,836 147,908 134,929 and expenses Income (loss)before income (1,293 ) 2,433 1,914 487 taxesIncome taxexpense (378 ) 557 298 166 (benefit) Net income $ (915 ) $ 1,876 $ 1,616 $ 321 (loss) Earnings(loss) percommon share $ (0.05 ) $ 0.09 $ 0.06 $ - (basic anddiluted) Reconciliationof Non-GAAP FinancialMeasure Net income $ (915 ) $ 1,876 $ 1,616 $ 321 (loss)Income taxexpense (378 ) 557 298 166 (benefit)Realizedinvestment (349 ) (183 ) (520 ) (432 )gains, netUnrealized(gains) losseson equity (711 ) 731 (5,458 ) 7,831 securities,net Non-GAAPOperating $ (2,353 ) $ 2,981 $ (4,064 ) $ 7,886 income (loss) September 30, December 31, SelectedBalance Sheet 2021 2020 Data Total cash and $ 300,297 $ 298,630 investmentsInsurance 295,191 292,478 subsidiariesParent and 5,106 6,152 otherTotal assets 404,077 405,187 Insurancereserves and 205,757 198,676 policyholderfundsDebt 33,738 33,738 Totalshareholders' 139,995 145,060 equityBook value per 6.60 6.84 common shareStatutorycapital and surplusLife and 38,503 42,326 healthProperty and 50,394 50,194 casualty