Atlantic American Corporation Reports Closing of Sale of its Regional Property and...

Atlantic American Corporation Reports Closing of Sale of its Regional Property and Casualty Operations and Fourth Quarter and Year End Results

ATLANTA--(Business Wire)--
Atlantic American Corporation (Nasdaq: AAME) reported that today
it closed the sale of its regional property and casualty operations
(including Association Casualty Insurance Company, Association Risk
Management General Agency, Inc. and Georgia Casualty & Surety Company)
to Columbia Mutual Insurance Company of Columbia, Missouri. The sale
was originally announced on December 27, 2007 and Benfield Advisory,
Inc. served as financial advisor to Atlantic American Corporation.

At the same time, the Company also announced net income for the
year ended December 31, 2007 of $7.3 million, or $0.25 per diluted
share, as compared to $8.9 million, or $0.33 per diluted share, for
the year ended December 31, 2006. The loss from discontinued
operations was $4.3 million, or $0.20 per diluted share, for the year
ended December 31, 2007 compared to income from discontinued
operations of $1.8 million, or $0.06 per diluted share, for the year
ended December 31, 2006. Total revenue for 2007 was $123.0 million, a
1.9% decline from 2006 total revenue of $125.4 million. Premiums
during 2007 decreased $11.8 million, or 10.7%, to $97.8 million from
2006 premiums of $109.6 million. Premium decreases were primarily
attributable to the significant price and product competition in all
lines of business. Realized investment gains for 2007 were $12.6
million as compared to $3.1 million for 2006 with the increase
resulting primarily from the sale of a common stock holding in
Wachovia Corporation. During the fourth quarter ended December 31,
2007, the Company reported net income of $4.2 million, or $0.15 per
diluted share, compared to $3.0 million, or $0.11 per diluted share,
during the same period in 2006. For the fourth quarter ended December
31, 2007, total revenue increased 23.2% to $38.4 million from $31.2
million for the fourth quarter of 2006. Premiums for the fourth
quarter of 2007 decreased 10.9% to $23.7 million compared to $26.6
million for the fourth quarter of 2006. The increase in fourth quarter
2007 total revenue was the result of the sale of the common stock
holding in Wachovia Corporation which increased realized investment
gains. Excluding consideration of realized investment gains (losses),
pre-tax operating earnings from continuing operations for the year
ended December 31, 2007 were $6.5 million, which is comparable to that
for the year ended December 31, 2006. Pre-tax operating earnings from
continuing operations for the quarter ended December 31, 2007 were
$2.9 million, a 78.6% increase over the $1.6 million in the comparable
quarter of 2006.

Commenting, Hilton H. Howell, Jr., president and chief executive
officer, stated, "While we will deeply miss the daily interaction we
had with those individuals who contributed so much to our regional
property and casualty operations, we believe that the future of those
companies is in good hands with the Columbia Insurance Group. As the
United States economy grows more uncertain, we are entering a period
in which we have now narrowed our business focus in the specialty
markets to those products and markets in which we believe we can
concentrate and excel."

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
include American Southern Insurance Company, American Safety Insurance
Company, Bankers Fidelity Life 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.

-0-
*T
Atlantic American Corporation
Financial Data
As of December 31, 2007

Three months ended Year ended
Dec. 31, Dec. 31,
(Unaudited; In thousands, except
per share data) 2007 2006 2007 2006
------------------- ------------------

Insurance premiums $ 23,734 $ 26,649 $ 97,824 $109,580
Investment income 2,926 3,061 11,722 11,926
Realized investment gains, net 11,556 1,304 12,627 3,084
Other income 200 170 799 768
---------- -------- --------- --------

Total revenue 38,416 31,184 122,972 125,358
---------- -------- --------- --------

Insurance benefits and losses
incurred 13,478 16,242 58,701 65,460
Commissions and underwriting
expenses 7,441 8,077 32,663 36,404
Interest expense 1,045 1,212 4,160 4,605
Other 1,982 2,717 8,350 9,265
---------- -------- --------- --------

Total benefits and expenses 23,946 28,248 103,874 115,734
---------- -------- --------- --------

Income from continuing
operations before taxes 14,470 2,936 19,098 9,624

Income tax expense 5,696 244 7,513 2,458
---------- -------- --------- --------

Income from continuing
operations 8,774 2,692 11,585 7,166
Income (loss) from discontinued
operations, net of tax (4,613) 272 (4,333) 1,770
---------- -------- --------- --------

Net income $ 4,161 $ 2,964 $ 7,252 $ 8,936
========== ======== ========= ========

Basic income (loss) per common
share:

Income from continuing
operations $ 0.38 $ 0.11 $ 0.46 $ 0.27
Income (loss) from
discontinued operations (0.21) 0.01 (0.20) 0.09
---------- -------- --------- --------

Net income $ 0.17 $ 0.12 $ 0.26 $ 0.36
========== ======== ========= ========

Diluted income (loss) per common
share:

Income from continuing
operations $ 0.32 $ 0.10 $ 0.45 $ 0.27
Income (loss) from
discontinued operations (0.17) 0.01 (0.20) 0.06
---------- -------- --------- --------

Net income $ 0.15 $ 0.11 $ 0.25 $ 0.33
========== ======== ========= ========

December December
31, 31,
Selected Balance Sheet Data 2007 2006
-------------------

Total investments $178,059 $193,197
Assets of discontinued
operations 196,154 194,248
Total assets 458,254 459,152
Insurance reserves and policy
funds 128,078 134,316
Debt 53,988 53,988
Total shareholders' equity 87,794 94,188
Book value per common share 3.09 3.44
*T

Atlantic American Corporation
John G. Sample, Jr., 404-266-5501
Senior Vice President and Chief Financial Officer

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