Atlantic American Corporation (Nasdaq- AAME) today reported net loss of $0.7 million, or $(0.04) per diluted share, for the three month period ended June 30, 2024, compared to net income of $1.7 million, or $0.08 per diluted share, for the three month period ended June 30, 2023. The Company had net loss of $2.7 million, or $(0.14) per diluted share, for the six month period ended June 30, 2024, compared to net income of $0.3 million, or $0.00 per diluted share, for the six month period ended June 30, 2023. The increase in net loss for the three month and six month periods ended June 30, 2024 was primarily the result of unfavorable loss experience in the Company’s life and health operations, as well as in the Company’s property and casualty operations, compared to the prior year periods.

Operating income decreased $2.8 million in the three month period ended June 30, 2024 from the three month period ended June 30, 2023. For the six month period ended June 30, 2024, operating income decreased $5.7 million from the comparable period in 2023. The decrease in operating income for the three month and six month periods ended June 30, 2024 was primarily the result of unfavorable loss experience in the life and health operations due to an increase in incurred losses in the group life and Medicare supplement lines of business. Also contributing to the decrease in operating income was unfavorable loss experience in the property and casualty operations due to the frequency and severity of claims in the automobile liability line of business.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “Although this year has presented challenges in our life and health operations, we believe our strategic investments in technology and talent will provide the foundation for future performance. We believe our recent product launches in several key states position us well for a strong sales season during the upcoming annual enrollment period. Additionally, our property and casualty division has demonstrated remarkable resilience in a softening market, consistently writing profitable business. We remain committed to our long-term strategy and are optimistic about the opportunities that lie ahead.”         

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, Bankers Fidelity Assurance Company and Atlantic Capital Life 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 forward-looking statements: 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 the Company’s ability to remediate the identified material weakness in its internal control over financial reporting as described in the Company’s most recent Annual Report on Form 10-K and those other risks and uncertainties detailed in statements and reports that the Company 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) 2024   2023   2024   2023
Insurance premiums              
    Life and health $ 27,449     $ 28,180     $ 54,123     $ 57,069  
    Property and casualty   17,544       17,880       35,422       35,091  
        Insurance premiums, net   44,993       46,060       89,545       92,160  
               
Net investment income   2,416       2,559       4,972       5,100  
Realized investment gains, net   13       70       13       70  
Unrealized gains (losses) on equity securities, net   243       494       129       (1,881 )
Other income   3       5       6       8  
               
Total revenue   47,668       49,188       94,665       95,457  
               
Insurance benefits and losses incurred              
    Life and health   17,579       15,817       36,691       33,617  
    Property and casualty   14,228       13,548       27,041       26,208  
Commissions and underwriting expenses   11,584       12,848       24,250       25,766  
Interest expense   867       807       1,722       1,557  
Other expense   4,259       3,951       8,316       7,910  
               
  Total benefits and expenses   48,517       46,971       98,020       95,058  
               
Income (loss) before income taxes   (849 )     2,217       (3,355 )     399  
Income tax expense (benefit)   (165 )     473       (673 )     101  
               
Net income (loss) $ (684 )   $ 1,744     $ (2,682 )   $ 298  
               
Earnings (loss) per common share (basic & diluted) $ (0.04 )   $ 0.08     $ (0.14 )   $ -  
               
Reconciliation of non-GAAP financial measure              
               
Net income (loss) $ (684 )   $ 1,744     $ (2,682 )   $ 298  
Income tax expense (benefit)   (165 )     473       (673 )     101  
Realized investment gains, net   (13 )     (70 )     (13 )     (70 )
Unrealized (gains) losses on equity securities, net   (243 )     (494 )     (129 )     1,881  
               
Non-GAAP operating income (loss) $ (1,105 )   $ 1,653     $ (3,497 )   $ 2,210  
               
       
  June 30,   December 31,        
Selected balance sheet data  2024    2023        
               
Total cash and investments $ 256,525     $ 265,368          
    Insurance subsidiaries   248,857       259,253          
    Parent and other   7,668       6,115          
Total assets   386,007       381,265          
Insurance reserves and policyholder funds   225,252       212,422          
Debt   37,762       36,757          
Total shareholders' equity   100,672       107,275          
Book value per common share   4.67       4.99          
Statutory capital and surplus              
    Life and health   32,689       38,299          
    Property and casualty   51,967       51,774          
               
Atlantic American (NASDAQ:AAME)
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