EXHIBIT 99.1
ATLANTIC AMERICAN CORPORATION ANNOUNCES INCREASED THIRD QUARTER
RESULTS
ATLANTA, Georgia, November 12, 2003 - Atlantic American Corporation (Nasdaq- AAME) today reported net income of $3.3 million, or $0.13 per diluted share, for the third quarter ended September 30, 2003 compared to net income of $1.0 million, or $0.03 per diluted share, for the third quarter ended September 30, 2002. The Company further reported net income of $5.2 million, or $0.19 per diluted share, for the nine months ended September 30, 2003 compared to a net loss of $12.4 million, or $0.62 per diluted share, for the nine months ended September 30, 2002. The net loss for the nine months ended September 30, 2002 was primarily the result of a non-cash charge of $15.8 million to reflect a change in accounting for goodwill. Premium revenue for the quarter ended September 30, 2003 decreased slightly to $37.9 million while for the nine months ended September 30, 2003, premium revenue increased less than 1.0% to $115.7 million. The nominal change in premiums for the third quarter and nine months ended September 30, 2003 is primarily attributable to the loss of a significant contract early in the second quarter of 2003, offset by continued new business growth and premium increases on existing business. In addition, during the third quarter of 2003, results were favorably impacted by a $1.5 million deferred tax benefit related to a reduction of the Company’s valuation allowance compared to a similar $1.3 million deferred tax benefit in the third quarter of 2002. The reduction of the valuation allowance is the result of reassessment as to the realization of certain net operating loss carry forwards. Pre-tax income for the nine months ended September 30, 2003 was $4.3 million compared to $3.2 million for the nine months ended September 30, 2002, or an increase of 35.8%, primarily due to better performance in the regional property and casualty division.
Commenting on the quarter, Hilton H. Howell, Jr., president and chief executive officer, stated, “While extremely pleased with our results for the quarter, we continue to focus attention on our core underwriting competencies. We are optimistic for the fourth quarter and believe that initiatives undertaken within our casualty division should become more evident shortly. Meanwhile, our life and health division continues with increased contributions to the operating performance of our overall organization.”
Atlantic American is an insurance holding company involved through its subsidiary companies in specialty markets of the life, health, property and casualty insurance industries. Its principal subsidiaries include American Southern Insurance Company, American Safety Insurance Company, Bankers Fidelity Life Insurance Company, Georgia Casualty & Surety Company, Association Risk Management General Agency, Association Casualty Insurance Company and Self-Insurance Administrators, Inc.
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 has filed with the Securities and Exchange Commission.
For further information contact:
John G. Sample, Jr.
Senior Vice President and Chief Financial Officer
Atlantic American Corporation
404-266-5501
Atlantic American Corporation
Financial Data
As of September 30, 2003
Three Months Ended September 30, | Nine Months Ended September 30, | |||
(Unaudited; In thousands, except per share data) | 2003 | 2002 | 2003 | 2002 |
Insurance premiums | $ 37,916 | $ 39,163 | $ 115,671 | $ 114,695 |
Investment income | 3,900 | 3,782 | 11,770 | 10,693 |
Realized investment gains (losses), net | (501) | 45 | 834 | 147 |
Other income | 219 | 161 | 741 | 764 |
Total revenue | 41,534 | 43,151 | 129,016 | 126,299 |
Insurance benefits and losses incurred | 23,220 | 28,538 | 78,535 | 82,045 |
Commissions and underwriting expenses | 11,824 | 11,414 | 33,014 | 30,514 |
Interest expense | 827 | 642 | 2,295 | 1,891 |
Other | 3,946 | 3,082 | 10,879 | 8,689 |
Total benefits and expenses | 39,817 | 43,676 | 124,723 | 123,139 |
Income (loss) before income taxes and cumulative effect of change in accounting principle | 1,717 | (525) | 4,293 | 3,160 |
Income tax benefit | (1,549) | (1,481) | (880) | (243) |
Income before cumulative effect of change in accounting principle | 3,266 | 956 | 5,173 | 3,403 |
Cumulative effect of change in accounting principle | - | - | - | (15,816) |
Net income (loss) | $ 3,266 | $ 956 | $ 5,173 | $ (12,413) |
Basic earnings per common share: | ||||
Income before cumulative effect of change in accounting principle | $ 0.14 | $ 0.03 | $ 0.20 | $ 0.11 |
Cumulative effect of change in accounting principle | - | - | - | (.74) |
Net income (loss) | $ 0.14 | $ 0.03 | $ 0.20 | $ (0.63) |
Diluted earnings per common share: | ||||
Income before cumulative effect of change in accounting principle | $ 0.13 | $ 0.03 | $ 0.19 | $ 0.11 |
Cumulative effect of change in accounting principle | - | - | - | (0.73) |
Net income (loss) | $ 0.13 | $ 0.03 | $ 0.19 | $ (0.62) |
Selected Balance Sheet Data | September 30, 2003 | December 31, 2002 |
Total investments | $ 279,721 | $ 249,842 |
Total assets | 436,853 | 420,982 |
Insurance reserves and policy funds | 258,727 | 254,135 |
Debt | 55,000 | 49,500 |
Total shareholders' equity | 82,060 | 78,540 |
Book value per common share | 3.21 | 2.93 |