Still in the Black, 3rd Qtr Results Slip for Atlantic American

Atlantic American Corporation, based in Atlanta, reported a net income of $1.0 million, or $0.03 per diluted share, for the third quarter ended September 30, 2002 compared to net income of $2.1 million, or $0.08 per diluted share, for the third quarter ended September 30, 2001. The company had a net loss of $12.4 million or $0.62 per diluted share for the nine months ended September 30, 2002 compared to net income of $3.7 million or $0.12 per diluted share for the nine months ended September 30, 2001.

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, 2002 increased 7.8 percent to $39.2 million. For the nine months ended September 30, 2002, premium revenue increased 6.0 percent to $114.7 million. The increase in premiums for the third quarter and nine months ended September 30, 2002 is primarily attributable to strengthened pricing and overall market expansion.

In addition, during the third quarter of 2002 results were favorably impacted by a $1.3 million deferred tax benefit related to a reduction of the company’s valuation allowance compared to a similar $0.8 million deferred tax benefit in the third quarter of 2001. The reduction of the valuation allowance is the result of reassessment as to the realization of certain net operating loss carry forwards. Pre-tax operating income before realized gains and excluding charges related to accounting for goodwill for the nine months ended September 30, 2002, decreased 17.5 percent to $3.0 million primarily due to development on prior years’ claims in the casualty division.

Commenting on the quarter, Hilton H. Howell, Jr., president and chief executive officer, stated, “Our company continues to be well postured for the future. We continue to be more selective of the business we are writing, however earnings have been unfavorably impacted by state assessments for other company insolvencies, assessments on second injury funds, as well as the liberal interpretation of workers’ compensation laws in the state of Texas. We believe that this will have a short term impact on earnings.”

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.

Topics Profit Loss