Atlantic American Corporation Reports Third Quarter Results for 2022

Rhea-AI Summary

Atlantic American Corporation (Nasdaq: AAME) reported a net loss of $0.7 million, or $0.04 per diluted share, for Q3 2022, an improvement from a net loss of $0.9 million in Q3 2021. For the first nine months of 2022, net income dropped to $0.5 million, or $0.01 per diluted share, down from $1.6 million in 2021. This dip is attributed to a decline of $10.9 million in unrealized gains, offset by increased operating income of $10.2 million, due to better performance in life and health operations. The company announced the formation of Atlantic Capital Life Assurance Company, now authorized to operate.

Positive

• Operating income increased by $10.2 million for the nine-month period ended September 30, 2022.
• Life and health operations improved with increased earned premium and fewer claims in the Medicare supplement line.

Negative

• Net income decreased by $1.1 million for Q3 and by $1.1 million for the nine-month period compared to 2021.
• Unrealized gains dropped by $10.9 million for the nine-month period ended September 30, 2022.

ATLANTA, Nov. 08, 2022 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net loss for the three month period ended September 30, 2022 of $0.7 million, or $0.04 per diluted share, as compared to net loss of $0.9 million, or $0.05 per diluted share, for the comparable period in 2021. For the nine month period ended September 30, 2022, the Company reported net income of $0.5 million, or $0.01 per diluted share, as compared to net income of $1.6 million, or $0.06 per diluted share, for the comparable period in 2021.   The decrease in net loss for the three month period ended September 30, 2022 was primarily attributable to more favorable loss experience in the life and health operations, partially offset by a decrease in unrealized gains of $3.5 million, from the comparable period in 2021. The decrease in net income for the nine month period ended September 30, 2022 was primarily attributable to the decrease in unrealized gains of $10.9 million from the comparable period in 2021, partially offset by more favorable loss experience in the life and health operations.

Operating income (as defined below) increased $4.1 million in the three month period ended September 30, 2022 from the three month period ended September 30, 2021. For the nine month period ended September 30, 2022, operating income increased $10.2 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 increase in earned premium within the group lines of business coupled with a decrease in the number of claims incurred in the Medicare supplement line of business.
   
Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are quite pleased to report an over $10 million improvement in operating income for the first nine months of 2022 as compared to 2021. The life and health operations have done a phenomenal job in diversifying the business through its competitive group products, as well as carefully managing the Medicare supplement line back to profitability. Additionally, our property and casualty operations continue to perform exceptionally well, maintaining profitability coupled with top line growth. Finally, it is with great enthusiasm that we announce our newly formed subsidiary, Atlantic Capital Life Assurance Company, which recently obtained its certificate of authority in our state of domicile.”

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, 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								Nine Months Ended
	September 30,								September 30,
(Unaudited; In thousands, except per share data)		2022				2021				2022				2021
Insurance premiums
Life and health	$	28,739			$	28,772			$	86,773			$	87,018
Property and casualty		17,641				17,320				53,753				50,297
Insurance premiums, net		46,380				46,092				140,526				137,315
Net investment income		2,641				2,137				7,510				6,516
Realized investment gains, net		101				349				29				520
Unrealized gains (losses) on equity securities, net		(2,783	)			711				(5,456	)			5,458
Other income		4				1				11				13
Total revenue		46,343				49,290				142,620				149,822
Insurance benefits and losses incurred
Life and health		18,599				23,394				58,003				66,463
Property and casualty		12,031				11,651				36,549				33,557
Commissions and underwriting expenses		12,843				11,927				35,894				36,670
Interest expense		523				347				1,291				1,040
Other expense		3,296				3,264				10,151				10,178
Total benefits and expenses		47,292				50,583				141,888				147,908
Income (loss) before income taxes		(949	)			(1,293	)			732				1,914
Income tax expense (benefit)		(265	)			(378	)			253				298
Net income (loss)	$	(684	)		$	(915	)		$	479			$	1,616
Earnings (loss) per common share (basic and diluted)	$	(0.04	)		$	(0.05	)		$	0.01			$	0.06
Reconciliation of Non-GAAP Financial Measure
Net income (loss)	$	(684	)		$	(915	)		$	479			$	1,616
Income tax expense (benefit)		(265	)			(378	)			253				298
Realized investment gains, net		(101	)			(349	)			(29	)			(520	)
Unrealized (gains) losses on equity securities, net		2,783				(711	)			5,456				(5,458	)
Non-GAAP Operating income (loss)	$	1,733			$	(2,353	)		$	6,159			$	(4,064	)
	September 30,				December 31,
Selected Balance Sheet Data		2022				2021
Total cash and investments	$	246,340			$	308,195
Insurance subsidiaries		240,860				302,302
Parent and other		5,480				5,893
Total assets		360,349				402,286
Insurance reserves and policyholder funds		204,289				201,797
Debt		34,738				33,738
Total shareholders' equity		97,911				141,286
Book value per common share		4.54				6.66
Statutory capital and surplus
Life and health		35,325				38,625
Property and casualty		52,981				52,724

FAQ

What were Atlantic American Corporation's earnings for Q3 2022?

Atlantic American Corporation reported a net loss of $0.7 million, or $0.04 per diluted share for Q3 2022.

How did the net income for Atlantic American Corporation change in 2022?

For the nine months ending September 30, 2022, net income decreased to $0.5 million from $1.6 million in 2021.

What contributed to Atlantic American Corporation's operating income growth?

The increase in operating income was mainly due to favorable loss experience in life and health operations, driven by increased earned premium and a reduction in claims.

What significant event occurred for Atlantic American Corporation in 2022?

The company announced the establishment of Atlantic Capital Life Assurance Company, which received its certificate of authority.