GlobeNewswire Inc | Aug 11, 2020 01:07PM EDT

August 11, 2020

ATLANTA, Aug. 11, 2020 (GLOBE NEWSWIRE) -- 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 Companys 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 Companys 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 Companys 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 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 Six Months Ended June 30, June 30,(Unaudited; Inthousands, 2020 2019 2020 2019 except per sharedata)Insurance premiumsLife and health $ 30,675 $ 30,715 $ 61,303 $ 61,691 Property and 15,824 14,754 30,746 28,560 casualtyInsurance 46,499 45,469 92,049 90,251 premiums, net Net investment 1,850 2,313 3,889 4,647 incomeRealizedinvestment - 610 249 1,995 gains, netUnrealized gains(losses) on 1,355 (5,337 ) (7,100 ) 1,152 equitysecurities, netOther income 33 72 60 100 Total revenue 49,737 43,127 89,147 98,145 Insurancebenefits and losses incurredLife and health 17,055 24,288 41,104 50,552 Property and 10,021 9,863 19,555 18,906 casualtyCommissions andunderwriting 10,854 11,509 23,480 22,524 expensesInterest expense 414 545 890 1,091 Other expense 3,112 2,511 6,064 5,376 Total benefits 41,456 48,716 91,093 98,449 and expenses Income (loss)before income 8,281 (5,589 ) (1,946 ) (304 )taxesIncome taxexpense 1,749 (1,163 ) (391 ) (40 )(benefit) Net income $ 6,532 $ (4,426 ) $ (1,555 ) $ (264 )(loss) Earnings (loss)per common share $ 0.31 $ (0.22 ) $ (0.09 ) $ (0.02 )(basic)Earnings (loss)per common share $ 0.30 $ (0.22 ) $ (0.09 ) $ (0.02 )(diluted) Reconciliationof Non-GAAP FinancialMeasure Net income $ 6,532 $ (4,426 ) $ (1,555 ) $ (264 )(loss)Income taxexpense 1,749 (1,163 ) (391 ) (40 )(benefit)Realizedinvestment - (610 ) (249 ) (1,995 )gains, netUnrealized(gains) losses (1,355 ) 5,337 7,100 (1,152 )on equitysecurities, net Non-GAAPOperating income $ 6,926 $ (862 ) $ 4,905 $ (3,451 )(loss) June 30, December 31, Selected Balance 2020 2019 Sheet Data Total cash and $ 283,254 $ 281,530 investmentsInsurance 276,585 274,730 subsidiariesParent and other 6,669 6,800 Total assets 385,737 377,626 Insurancereserves and 204,711 201,906 policyholderfundsDebt 33,738 33,738 Totalshareholders' 123,894 118,394 equityBook value per 5.79 5.51 common shareStatutorycapital and surplusLife and health 34,735 35,546 Property and 45,927 45,827 casualty