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 CorporationFinancial 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          
               
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