Atlantic American Corporation Reports Second Quarter Results for 2022

Rhea-AI Summary

Atlantic American Corporation (Nasdaq: AAME) reported a net loss of $1.7 million, or $0.09 per diluted share, for the three months ended June 30, 2022, compared to a net income of $3.0 million, or $0.14 per diluted share, in 2021. However, the company achieved a net income of $1.2 million for the six-month period, down from $2.5 million YoY. Operating income increased significantly by $4.4 million for the quarter and $6.1 million for the half-year due to improved loss experience in life and health insurance, as well as a rise in insurance premiums by 9.5% in the property and casualty segment.

Positive

• Operating income increased by $4.4 million (Q2 2022) and $6.1 million (H1 2022) YoY.
• Insurance premiums grew by $3.1 million, or 9.5%, in property and casualty operations.

Negative

• Net loss of $1.7 million for Q2 2022, compared to net income of $3.0 million in Q2 2021.
• Net income for H1 2022 decreased to $1.2 million from $2.5 million in H1 2021.
• Fluctuations in market values led to a decrease in unrealized gains of $8.9 million (Q2) and $7.4 million (H1) YoY.

• Net income of $1.2 million for the six month period ended June 30, 2022
• Operating income of $4.4 million for the six month period ended June 30, 2022
• Insurance premiums increased $3.1 million, or 9.5%, within the property and casualty operations for the six month period ended June 30, 2022
  

ATLANTA, Aug. 12, 2022 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net loss for the three month period ended June 30, 2022 of $1.7 million, or $0.09 per diluted share, as compared to net income of $3.0 million, or $0.14 per diluted share, for the comparable period in 2021. For the six month period ended June 30, 2022, the Company reported net income of $1.2 million, or $0.05 per diluted share, as compared to net income of $2.5 million, or $0.11 per diluted share, for the comparable period in 2021. The decrease in net income for the three month and six month periods ended June 30, 2022 was primarily attributable to fluctuations in market values of equity securities, resulting in a decrease in unrealized gains of $8.9 million and $7.4 million, respectively, over the comparable periods in 2021.

Operating income (as defined below) increased $3.1 million in the three month period ended June 30, 2022 from the three month period ended June 30, 2021. For the six month period ended June 30, 2022, operating income increased $6.1 million from the comparable period in 2021. The increase in operating income was primarily due to favorable loss experience in the life and health operations, resulting from an improvement in rate adequacy in the Medicare supplement line of business coupled with an increase in earned premium within the group lines of business.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are delighted to report the marked improvement in operating income for both the quarter and year to date.   Following a number of strategic rate adjustments within our Medicare supplement business, we are beginning to see meaningful improvements in the profitability of that line. Our voluntary benefits division continues to gain ground in the marketplace and we’ve reached a new record in insurance premiums within our property and casualty operations.”

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). We define operating income (loss) as net income (loss) excluding: (i) income tax expense (benefit); (ii) realized investment (gains) losses, net; and (iii) unrealized (gains) losses on equity securities, net. 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 (benefit), 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, including those detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and subsequent statements and reports that Atlantic American Corporation files from time to time 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)		2022				2021				2022				2021
Insurance premiums
Life and health	$	28,296			$	28,771			$	58,034			$	58,246
Property and casualty		18,769				16,362				36,112				32,977
Insurance premiums, net		47,065				45,133				94,146				91,223
Net investment income		2,529				2,266				4,869				4,379
Realized investment gains (losses), net		(62	)			50				(72	)			171
Unrealized gains (losses) on equity securities, net		(4,866	)			4,003				(2,673	)			4,747
Other income		3				5				7				12
Total revenue		44,669				51,457				96,277				100,532
Insurance benefits and losses incurred
Life and health		18,713				21,546				39,404				43,069
Property and casualty		14,040				10,157				24,518				21,906
Commissions and underwriting expenses		10,215				12,179				23,051				24,743
Interest expense		414				347				768				693
Other expense		3,402				3,474				6,855				6,914
Total benefits and expenses		46,784				47,703				94,596				97,325
Income (loss) before income taxes		(2,115	)			3,754				1,681				3,207
Income tax expense (benefit)		(436	)			792				518				676
Net income (loss)	$	(1,679	)		$	2,962			$	1,163			$	2,531
Earnings (loss) per common share (basic)	$	(0.09	)		$	0.14			$	0.05			$	0.11
Earnings (loss) per common share (diluted)	$	(0.09	)		$	0.14			$	0.05			$	0.11
Reconciliation of Non-GAAP Financial Measure
Net income (loss)	$	(1,679	)		$	2,962			$	1,163			$	2,531
Income tax expense (benefit)		(436	)			792				518				676
Realized investment (gains) losses, net		62				(50	)			72				(171	)
Unrealized (gains) losses on equity securities, net		4,866				(4,003	)			2,673				(4,747	)
Non-GAAP Operating income (loss)	$	2,813			$	(299	)		$	4,426			$	(1,711	)
	June 30,			December 31,
Selected Balance Sheet Data		2022				2021
Total cash and investments	$	259,845			$	308,195
Insurance subsidiaries		254,032				302,302
Parent and other		5,813				5,893
Total assets		379,274				402,286
Insurance reserves and policyholder funds		211,874				201,797
Debt		34,738				33,738
Total shareholders' equity		109,101				141,286
Book value per common share		5.08				6.66
Statutory capital and surplus
Life and health		35,946				38,625
Property and casualty		52,534				52,724

 

FAQ

What is Atlantic American Corporation's net income for the second quarter of 2022?

Atlantic American Corporation reported a net loss of $1.7 million for Q2 2022.

How did Atlantic American Corporation perform in the first half of 2022?

For the first half of 2022, Atlantic American reported a net income of $1.2 million, down from $2.5 million in 2021.

What caused the decline in net income for Atlantic American Corporation?

The decline was primarily due to fluctuations in market values of equity securities, resulting in decreased unrealized gains.

How much did insurance premiums increase for Atlantic American Corporation?

Insurance premiums increased by $3.1 million, or 9.5%, in property and casualty operations.

What was the operating income for Atlantic American Corporation in Q2 2022?

The operating income for Q2 2022 was $4.4 million, reflecting a significant increase compared to the previous year.