Atlantic American Corporation Reports Second Quarter Results For 2021

Rhea-AI Summary

Atlantic American Corporation (Nasdaq- AAME) announced a net income of $3.0 million, or $0.14 per diluted share, for Q2 2021, down from $6.5 million, or $0.30 per share in Q2 2020. For the first half of 2021, net income reached $2.5 million, a turnaround from a net loss of $1.6 million in 2020. The decrease in Q2 net income was attributed to a $4.5 million rise in life and health insurance claims. Conversely, the six-month period benefitted from $4.7 million in unrealized gains on equity securities, highlighting market fluctuations. CEO Hilton H. Howell, Jr. expressed optimism about premium growth and positioning for upcoming enrollment periods.

Positive

• Net income for H1 2021 increased to $2.5 million from a loss of $1.6 million in 2020.
• Reported $4.7 million in unrealized gains on equity securities for the first half of 2021.

Negative

• Q2 2021 net income decreased to $3.0 million from $6.5 million in Q2 2020.
• Operating income fell by $7.2 million in Q2 2021 compared to Q2 2020.

ATLANTA, Aug. 10, 2021 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net income for the three month period ended June 30, 2021 of $3.0 million, or $0.14 per diluted share, as compared to net income of $6.5 million, or $0.30 per diluted share, for the comparable period in 2020. For the six month period ended June 30, 2021, the Company reported net income of $2.5 million, or $0.11 per diluted share, as compared to net loss of $1.6 million, or $0.09 per diluted share, for the comparable period in 2020. The decrease in net income during the second quarter of 2021 was primarily due to a $4.5 million increase in life and health insurance benefits and losses incurred. Such increase was largely the result of higher utilization of policy benefits as compared to the unusually low levels experienced in 2020 during the COVID-19 shelter in place restrictions imposed on our policyholders. The increase in net income for the six month period ended June 30, 2021 was primarily due to $4.7 million of net unrealized gains on equity securities as compared to $7.1 million of unrealized losses on equity securities during the comparable period in 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 Company’s equity investments.

Operating income (as defined below) decreased $7.2 million in the three month period ended June 30, 2021 from the three month period ended June 30, 2020. For the six month period ended June 30, 2021, operating income decreased $6.6 million from the comparable period in 2020. The decrease in operating income for the three and six month periods was primarily due to less favorable loss experience in the life and health operations, resulting from a significant increase in the number of incurred claims within the Medicare supplement line of business, as mentioned above.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are extremely pleased with the new premium growth this year in our property and casualty operations. Despite the challenges faced over the most recent year related to the COVID-19 pandemic, that business has prospered exceedingly well. We continue to refine the underwriting on our Medicare supplement business and have made targeted investments in the life and health operations to better serve the needs of our customers. The second half of the year is when the majority of enrollment periods begin in both the individual and group markets, which we believe we are well positioned to serve. We anticipate a strong finish for the balance of this 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 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								Six Months Ended
	June 30,								June 30,
(Unaudited; In thousands, except per share data)		2021				2020				2021				2020
Insurance premiums
Life and health	$	28,771			$	30,675			$	58,246			$	61,303
Property and casualty		16,362				15,824				32,977				30,746
Insurance premiums, net		45,133				46,499				91,223				92,049
Net investment income		2,266				1,850				4,379				3,889
Realized investment gains, net		50				-				171				249
Unrealized gains (losses) on equity securities, net		4,003				1,355				4,747				(7,100	)
Other income		5				33				12				60
Total revenue		51,457				49,737				100,532				89,147
Insurance benefits and losses incurred
Life and health		21,546				17,055				43,069				41,104
Property and casualty		10,157				10,021				21,906				19,555
Commissions and underwriting expenses		12,179				10,854				24,743				23,480
Interest expense		347				414				693				890
Other expense		3,474				3,112				6,914				6,064
Total benefits and expenses		47,703				41,456				97,325				91,093
Income (loss) before income taxes		3,754				8,281				3,207				(1,946	)
Income tax expense (benefit)		792				1,749				676				(391	)
Net income (loss)	$	2,962			$	6,532			$	2,531			$	(1,555	)
Earnings (loss) per common share (basic)	$	0.14			$	0.31			$	0.11			$	(0.09	)
Earnings (loss) per common share (diluted)	$	0.14			$	0.30			$	0.11			$	(0.09	)
Reconciliation of Non-GAAP Financial Measure
Net income (loss)	$	2,962			$	6,532			$	2,531			$	(1,555	)
Income tax expense (benefit)		792				1,749				676				(391	)
Realized investment gains, net		(50	)			-				(171	)			(249	)
Unrealized (gains) losses on equity securities, net		(4,003	)			(1,355	)			(4,747	)			7,100
Non-GAAP Operating income (loss)	$	(299	)		$	6,926			$	(1,711	)		$	4,905

	June 30,				December 31,
Selected Balance Sheet Data		2021				2020
Total cash and investments	$	295,556			$	298,630
Insurance subsidiaries		290,189				292,478
Parent and other		5,367				6,152
Total assets		404,486				405,187
Insurance reserves and policyholder funds		205,873				198,676
Debt		33,738				33,738
Total shareholders' equity		142,375				145,060
Book value per common share		6.71				6.84
Statutory capital and surplus
Life and health		41,690				42,326
Property and casualty		50,017				50,194

FAQ

What were Atlantic American Corporation's earnings for Q2 2021?

Atlantic American Corporation reported a net income of $3.0 million, or $0.14 per diluted share, for Q2 2021.

How did Atlantic American Corporation's H1 2021 performance compare to 2020?

For H1 2021, Atlantic American Corporation posted a net income of $2.5 million, a significant improvement over a net loss of $1.6 million in H1 2020.

What caused the decrease in net income for Q2 2021 for Atlantic American Corporation?

The decrease in net income during Q2 2021 was primarily due to a $4.5 million increase in life and health insurance claims.

What were the unrealized gains on equity securities for Atlantic American Corporation in H1 2021?

Atlantic American Corporation reported $4.7 million in unrealized gains on equity securities for H1 2021.

What did the CEO of Atlantic American Corporation say about future prospects?

CEO Hilton H. Howell, Jr. expressed optimism about premium growth and the company's positioning for upcoming enrollment periods.