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Atlantic American Reports Increased Net Income

  • Net income for the six month period ended June 30, 2013 increases to $6.9 million from $2.4 million for the comparable period of 2012
  • Life and health insurance premiums increase 14.8% in the comparable six month period
  • Property and casualty insurance premiums increase 4.1% in the comparable six month period
  • Operating income for the three month period ended June 30, 2013 increases 58.6% from the comparable period of 2012

ATLANTA, Aug. 12, 2013 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq:AAME) today reported increased second quarter and six month results. Net income for the three month period ended June 30, 2013 was $6.0 million, or $0.26 per diluted share as compared to net income of $781 thousand, or $0.03 per diluted share, for the three month period ended June 30, 2012. Net income for the six month period ended June 30, 2013 increased to $6.9 million, or $0.30 per diluted share, from net income of $2.4 million, or $0.10 per diluted share, in the comparable period of 2012. Realized investment gains contributed significantly to the increased earnings and were $5.5 million for the three month period ended June 30, 2013 versus $470 thousand for the comparable period in 2012 and $6.1 million for the six month period ended June 30, 2013 versus $1.4 million for the comparable period in 2012.

Total revenues for the three month period ended June 30, 2013 were $44.6 million, increasing 27.7% from the $35.0 million for the three month period ended June 30, 2012. Insurance premiums during this quarter increased 15.1% from the comparable 2012 period premiums. For the six month period ended June 30, 2013, revenues were $81.3 million, increasing 17.0% from the comparable 2012 period revenues of $69.5 million. The increase in premiums during the three month and six month periods ended June 30, 2013 resulted primarily from increased sales of the Medicare supplement product in the life and health segment and increased commercial automobile premiums in the property and casualty segment. Operating income for the three month period ended June 30, 2013 was $609 thousand, a 58.6% increase over the $384 thousand for the comparable period of 2012; and for the six month period ended June 30, 2013 was $942 thousand, a 17.8% decrease from the $1.1 million for the comparable period of 2012.

Commenting on the quarter, Hilton H. Howell, Jr., chairman, president and chief executive officer stated, "This second quarter was defined by significant realized investment gains. When long term interest rates spiked in the middle of the second quarter, we began a process of shortening up on the maturities in our investment portfolio. The disposal of certain investments which had long term maturities generated the significant gains. Although we did realize gains from our investment portfolio of $5.5 million, ultimately the decline in the value of our total portfolio in the second quarter was approximately $16.2 million. The inability to quickly reinvest the proceeds resulted in larger than average balances of cash at June 30. Consistent with previous quarters our core business revenues continued with their strong growth permitting us to continue making investments in our advertising, social media and worksite marketing initiatives. The balance of the year continues to look very promising."

Atlantic American 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 subsidiaries consist of American Southern Insurance Company, American Safety Insurance Company, and Bankers Fidelity Life Insurance Company.

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 detailed from time to time in statements and reports that Atlantic American Corporation files with the Securities and Exchange Commission.

Atlantic American Corporation
Financial Data
Three months ended Six months ended
June 30, June 30,
(Unaudited; In thousands, except per share data) 2013 2012 2013 2012
Insurance premiums
Life and health $25,019 $21,926 $49,111 $42,795
Property and casualty 11,354 9,666 20,281 19,478
Investment income 2,774 2,855 5,679 5,738
Realized investment gains, net 5,454 470 6,132 1,428
Other income 47 36 95 65
Total revenue 44,648 34,953 81,298 69,504
Insurance benefits and losses incurred
Life and health 17,942 16,357 35,982 31,010
Property and casualty 7,057 6,738 12,379 14,757
Commissions and underwriting expenses 10,402 7,970 19,685 15,003
Interest expense 438 658 1,015 1,315
Other 2,746 2,376 5,163 4,845
Total benefits and expenses 38,585 34,099 74,224 66,930
Income before income taxes 6,063 854 7,074 2,574
Income tax expense 103 73 192 136
Net income $5,960 $781 $6,882 $2,438
Basic earnings per common share $0.27 $0.03 $0.31 $0.10
Diluted earnings per common share $0.26 $0.03 $0.30 $0.10
Reconciliation of Net Income to non-GAAP measurements
Net income $5,960 $781 $6,882 $2,438
Income tax expense 103 73 192 136
Realized investment gains, net (5,454) (470) (6,132) (1,428)
Operating income $609 $384 $942 $1,146
June 30, December 31,
Selected Balance Sheet Data 2013 2012
Total cash and investments $249,831 $265,843
Insurance subsidiaries 221,072 236,934
Parent and other 28,759 28,909
Total assets 320,913 320,177
Insurance reserves and policyholder funds 168,761 154,558
Debt 41,238 41,238
Total shareholders' equity 98,747 105,736
Book value per common share 4.32 4.65
Statutory capital and surplus
Life and health 34,658 33,059
Property and casualty 38,854 36,947

CONTACT: For further information contact: John G. Sample, Jr. Senior Vice President and Chief Financial Officer Atlantic American Corporation 404-266-5501 Hilton H. Howell, Jr. Chairman, President & CEO Atlantic American Corporation 404-266-5505Source:Atlantic American Corporation