Atlantic American Corporation (Nasdaq- AAME) today reported net income of $1.8 million, or $0.08 per diluted share, for the three month period ended September 30, 2023, compared to net loss of $0.7 million, or $(0.04) per diluted share, for the three month period ended September 30, 2022. The Company had net income of $2.1 million, or $0.09 per diluted share, for the nine month period ended September 30, 2023, compared to net income of $0.5 million, or $0.01 per diluted share, for the nine month period ended September 30, 2022. The increase in net income for the three and nine month periods ended September 30, 2023 was primarily the result of a more favorable loss experience in the life and health operations, from the comparable periods in 2022, coupled with a decrease in unrealized losses on equity securities. Partially offsetting this increase in net income for the nine month period ended September 30, 2023 was an increase in ancillary costs related to the implementation of the new actuarial valuation system, coupled with an increase in administrative costs related to the growth in the group and individual lines of business within the life and health operations.

Operating income (as defined below) increased $1.9 million in the three month period ended September 30, 2023 from the three month period ended September 30, 2022. For the nine month period ended September 30, 2023, operating income decreased $0.3 million from the comparable period in 2022. The increase in operating income for the three month period ended September 30, 2023 was primarily the result of a more favorable loss experience in the life and health operations, from the comparable period in 2022. The decrease in operating income for the nine month period ended September 30, 2023 was primarily attributable to ancillary costs related to the implementation of the new actuarial valuation system, coupled with an increase in administrative costs related to the growth in the group and individual lines of business within the life and health operations, as mentioned above.     Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are delighted with the improvements in net income for each of the quarter and year-to-date period. Although our revenue numbers are off slightly compared to prior year, operating income remains quite strong for 2023. Our newest legal entity, Atlantic Capital Life Assurance Company, recently launched product in a select number of states and we expect additional states to be released over the remainder of the year.”

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 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 risks and uncertainties detailed in 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)   2023       2022       2023       2022  
Insurance premiums              
    Life and health $ 27,175     $ 28,739     $ 84,244     $ 86,773  
    Property and casualty   16,571       17,641       51,662       53,753  
        Insurance premiums, net   43,746       46,380       135,906       140,526  
               
Net investment income   2,325       2,641       7,425       7,510  
Realized investment gains, net   -       101       70       29  
Unrealized losses on equity securities, net   (1,486 )     (2,783 )     (3,367 )     (5,456 )
Other income   6       4       14       11  
               
Total revenue   44,591       46,343       140,048       142,620  
               
Insurance benefits and losses incurred              
    Life and health   14,937       18,599       48,554       58,003  
    Property and casualty   11,881       12,031       38,089       36,549  
Commissions and underwriting expenses   11,064       12,843       36,830       35,894  
Interest expense   850       523       2,407       1,291  
Other expense   3,721       3,296       11,631       10,151  
               
  Total benefits and expenses   42,453       47,292       137,511       141,888  
               
Income (loss) before income taxes   2,138       (949 )     2,537       732  
Income tax expense (benefit)   379       (265 )     480       253  
               
Net income (loss) $ 1,759     $ (684 )   $ 2,057     $ 479  
               
Earnings (loss) per common share (basic and diluted) $ 0.08     $ (0.04 )   $ 0.09     $ 0.01  
               
Reconciliation of Non-GAAP Financial Measure              
               
Net income (loss) $ 1,759     $ (684 )   $ 2,057     $ 479  
Income tax expense (benefit)   379       (265 )     480       253  
Realized investment gains, net   -       (101 )     (70 )     (29 )
Unrealized losses on equity securities, net   1,486       2,783       3,367       5,456  
               
Non-GAAP operating income $ 3,624     $ 1,733     $ 5,834     $ 6,159  
               
       
  September 30, December 31,        
Selected Balance Sheet Data   2023       2022          
               
Total cash and investments $ 244,709     $ 257,575          
    Insurance subsidiaries   238,497       251,378          
    Parent and other   6,212       6,197          
Total assets   361,620       367,064          
Insurance reserves and policyholder funds   201,988       202,651          
Debt   36,757       35,747          
Total shareholders' equity   98,746       102,193          
Book value per common share   4.57       4.74          
Statutory capital and surplus              
    Life and health   37,392       36,672          
    Property and casualty   53,360       53,023          
               
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