GlobeNewswire Inc | Nov 10, 2020 12:43PM EST

November 10, 2020

ATLANTA, Nov. 10, 2020 (GLOBE NEWSWIRE) -- 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 Companys 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 Companys 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 Companys 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, Im 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 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; In thousands, 2020 2019 2020 2019 except per share data)Insurance premiums Life and health $ 30,208 $ 30,530 $ 91,511 $ 92,221 Property and 14,770 14,475 45,516 43,035 casualtyInsurance 44,978 45,005 137,027 135,256 premiums, net Net investment income 1,828 2,187 5,717 6,834 Realized investment gains 183 (430 ) 432 1,565 (losses), netUnrealized gains (losses) (731 ) 944 (7,831 ) 2,096 on equity securities, netOther income 11 39 71 139 Total revenue 46,269 47,745 135,416 145,890 Insurance benefits and losses incurredLife and health 20,088 25,279 61,192 75,831 Property and 9,131 9,440 28,686 28,346 casualtyCommissions and 11,202 11,471 34,682 33,995 underwriting expensesInterest expense 363 533 1,253 1,624 Other expense 3,052 2,766 9,116 8,142 Total benefits and 43,836 49,489 134,929 147,938 expenses Income (loss) before 2,433 (1,744 ) 487 (2,048 )income taxesIncome tax expense 557 (352 ) 166 (392 )(benefit) Net income (loss) $ 1,876 $ (1,392 ) $ 321 $ (1,656 ) Earnings (loss) percommon share (basic and $ 0.09 $ (0.07 ) $ - $ (0.10 )diluted) Reconciliation ofNon-GAAP Financial Measure Net income (loss) $ 1,876 $ (1,392 ) $ 321 $ (1,656 )Income tax expense 557 (352 ) 166 (392 )(benefit)Realized investment (183 ) 430 (432 ) (1,565 )(gains) losses, netUnrealized (gains) losses 731 (944 ) 7,831 (2,096 )on equity securities, net Non-GAAP Operating income $ 2,981 $ (2,258 ) $ 7,886 $ (5,709 )(loss) September 30, December 31, Selected Balance Sheet 2020 2019 Data Total cash and $ 283,597 $ 281,530 investmentsInsurance 277,516 274,730 subsidiariesParent and other 6,081 6,800 Total assets 384,952 377,626 Insurance reserves and 201,064 201,906 policyholder fundsDebt 33,738 33,738 Total shareholders' 128,015 118,394 equityBook value per common 6.00 5.51 shareStatutory capital and surplusLife and health 35,725 35,546 Property and 46,397 45,827 casualty