Atlantic American Corporation Reports Fourth Quarter and Year End Results for 2023; Declares Annual Dividend

ATLANTA, April 01, 2024 (GLOBE NEWSWIRE) — Atlantic American Corporation (Nasdaq- AAME) today reported net loss for the three month period ended December 31, 2023 of $2.2 million, or ($0.11) per diluted share, as compared to net income of $1.0 million, or $0.05 per diluted share, for the comparable period in 2022. For the year ended December 31, 2023, the Company reported net loss of $0.2 million, or ($0.03) per diluted share, as compared to net income of $1.5 million, or $0.06 per diluted share, for the year ended December 31, 2022. The decrease in net income for the fourth quarter of 2023 was primarily due to an increase in insurance benefits and losses incurred partially offset by an increase in unrealized gains in equity securities. The decrease in net income for the year ended December 31, 2023 was primarily due to a decrease in earned premiums, as well as an increase in insurance benefits and losses as a percentage of premiums. Also contributing to the decrease in net income is an increase in debt service costs due to rising interest rates. Partially offsetting this decrease was a decline in unrealized losses on equity securities.

Operating income (loss), as defined below, decreased to a $4.3 million operating loss in the three month period ended December 31, 2023, as compared to $3.5 million operating income for the three month period ended December 31, 2022. For the year ended December 31, 2023, the Company reported operating income of $1.5 million compared to operating income of $9.6 million for the year ended December 31, 2022. The decrease in operating income for the three and twelve month periods was primarily due to an increase in insurance benefits and losses incurred as a percentage of premiums.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “The Company has made significant investments in both human talent and information technology within our Life and Health segment that we expect will lead to improved top line results and profitability of our business. While we have experienced some inflationary pressures in our Property and Casualty segment, their disciplined underwriting approach delivered another profitable year. In recognition of our enthusiasm for 2024, the Board of Directors recently approved the Company’s annual dividend of $0.02 per share, which is payable on April 26, 2024 to shareholders of record on April 12, 2024.”

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, 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   Twelve Months Ended
  December 31,   December 31,
(Unaudited; In thousands, except per share data)   2023       2022       2023       2022  
Insurance premiums              
    Life and health $ 26,138     $ 28,391     $ 110,382     $ 115,164  
    Property and casualty   16,781       16,523       68,443       70,276  
        Insurance premiums, net   42,919       44,914       178,825       185,440  
               
Net investment income   2,633       2,422       10,058       9,932  
Realized investment gains, net         1       70       30  
Unrealized gains (losses) on equity securities, net   1,190       (2,106 )     (2,177 )     (7,562 )
Other income   3             17       11  
               
Total revenue   46,745       45,231       186,793       187,851  
               
Insurance benefits and losses incurred              
    Life and health   22,931       18,278       71,485       76,281  
    Property and casualty   12,926       10,626       51,015       47,175  
Commissions and underwriting expenses   9,294       10,819       46,124       46,713  
Interest expense   862       661       3,269       1,952  
Other expense   3,834       3,483       15,465       13,634  
               
  Total benefits and expenses   49,847       43,867       187,358       185,755  
               
Income (loss) before income taxes   (3,102 )     1,364       (565 )     2,096  
Income tax expense (benefit)   (874 )     318       (394 )     571  
               
Net income (loss) $ (2,228 )   $ 1,046     $ (171 )   $ 1,525  
               
Earnings (loss) per common share (basic and diluted) $ (0.11 )   $ 0.05     $ (0.03 )   $ 0.06  
               
Reconciliation of non-GAAP financial measure              
               
Net income (loss) $ (2,228 )   $ 1,046     $ (171 )   $ 1,525  
Income tax expense (expense)   (874 )     318       (394 )     571  
Realized investment gains, net         (1 )     (70 )     (30 )
Unrealized (gains) losses on equity securities, net   (1,190 )     2,106       2,177       7,562  
               
Non-GAAP operating income (loss) $ (4,292 )   $ 3,469     $ 1,542     $ 9,628  
               
       
  December 31,   December 31,        
Selected balance sheet data   2023       2022          
               
Total cash and investments $ 265,368     $ 257,575          
    Insurance subsidiaries   259,253       251,378          
    Parent and other   6,115       6,197          
Total assets   381,265       367,064          
Insurance reserves and policyholder funds   212,422       202,651          
Debt   36,757       35,747          
Total shareholders’ equity   107,275       102,193          
Book value per common share   4.99       4.74          
Statutory capital and surplus              
    Life and health   38,299       36,672          
    Property and casualty   51,774       53,023          
               


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