AAME Atlantic American Corporation

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