☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Georgia
|
58-1027114
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
4370 Peachtree Road, N.E.,
Atlanta, Georgia
|
30319
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, par value $1.00 per share
|
AAME
|
NASDAQ Global Market
|
Part I.
|
Financial Information
|
|
|
||
Item 1.
|
2
|
|
|
||
2
|
||
|
||
3
|
||
|
||
4
|
||
|
||
5
|
||
|
||
6
|
||
|
||
7
|
||
|
||
Item 2.
|
21
|
|
|
||
Item 4.
|
28
|
|
|
||
Part II.
|
Other Information
|
|
|
||
Item 2.
|
29
|
|
|
||
Item 6.
|
29
|
|
|
||
30
|
ASSETS | ||||||||
Unaudited
June 30,
2020
|
December 31,
2019
|
|||||||
Cash and cash equivalents
|
$
|
16,354
|
$
|
12,893
|
||||
Investments:
|
||||||||
Fixed maturities, available-for-sale, at fair value (amortized cost: $214,080 and $219,233)
|
236,187
|
232,472
|
||||||
Equity securities, at fair value (cost: $7,311 and $7,168)
|
15,965
|
22,922
|
||||||
Other invested assets (cost: $11,905 and $9,908)
|
11,454
|
9,960
|
||||||
Policy loans
|
2,018
|
2,007
|
||||||
Real estate
|
38
|
38
|
||||||
Investment in unconsolidated trusts
|
1,238
|
1,238
|
||||||
Total investments
|
266,900
|
268,637
|
||||||
Receivables:
|
||||||||
Reinsurance
|
27,562
|
32,135
|
||||||
Insurance premiums and other (net of allowance for doubtful accounts: $197 and $183)
|
23,785
|
13,134
|
||||||
Deferred income taxes, net
|
1,144
|
314
|
||||||
Deferred acquisition costs
|
39,148
|
38,861
|
||||||
Other assets
|
8,300
|
9,108
|
||||||
Intangibles
|
2,544
|
2,544
|
||||||
Total assets
|
$
|
385,737
|
$
|
377,626
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Insurance reserves and policyholder funds:
|
||||||||
Future policy benefits
|
$
|
91,927
|
$
|
92,490
|
||||
Unearned premiums
|
35,091
|
26,035
|
||||||
Losses and claims
|
76,498
|
81,448
|
||||||
Other policy liabilities
|
1,195
|
1,933
|
||||||
Total insurance reserves and policyholder funds
|
204,711
|
201,906
|
||||||
Accounts payable and accrued expenses
|
23,394
|
23,588
|
||||||
Junior subordinated debenture obligations, net
|
33,738
|
33,738
|
||||||
Total liabilities
|
261,843
|
259,232
|
||||||
Commitments and contingencies (Note 10)
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock, $1 par, 4,000,000 shares authorized; Series D preferred, 55,000 shares issued and outstanding; $5,500 redemption value
|
55
|
55
|
||||||
Common stock, $1 par, 50,000,000 shares authorized; shares issued: 22,400,894; shares outstanding: 20,454,001 and 20,472,162
|
22,401
|
22,401
|
||||||
Additional paid-in capital
|
57,435
|
57,820
|
||||||
Retained earnings
|
34,266
|
36,020
|
||||||
Accumulated other comprehensive income
|
17,464
|
10,459
|
||||||
Unearned stock grant compensation
|
(466
|
)
|
(781
|
)
|
||||
Treasury stock, at cost: 1,946,893 and 1,928,732 shares
|
(7,261
|
)
|
(7,580
|
)
|
||||
Total shareholders’ equity
|
123,894
|
118,394
|
||||||
Total liabilities and shareholders’ equity
|
$
|
385,737
|
$
|
377,626
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenue:
|
||||||||||||||||
Insurance premiums, net
|
$
|
46,499
|
$
|
45,469
|
$
|
92,049
|
$
|
90,251
|
||||||||
Net investment income
|
1,850
|
2,313
|
3,889
|
4,647
|
||||||||||||
Realized investment gains, net
|
-
|
610
|
249
|
1,995
|
||||||||||||
Unrealized gains (losses) on equity securities, net
|
1,355
|
(5,337
|
)
|
(7,100
|
)
|
1,152
|
||||||||||
Other income
|
33
|
72
|
60
|
100
|
||||||||||||
Total revenue
|
49,737
|
43,127
|
89,147
|
98,145
|
||||||||||||
Benefits and expenses:
|
||||||||||||||||
Insurance benefits and losses incurred
|
27,076
|
34,151
|
60,659
|
69,458
|
||||||||||||
Commissions and underwriting expenses
|
10,854
|
11,509
|
23,480
|
22,524
|
||||||||||||
Interest expense
|
414
|
545
|
890
|
1,091
|
||||||||||||
Other expense
|
3,112
|
2,511
|
6,064
|
5,376
|
||||||||||||
Total benefits and expenses
|
41,456
|
48,716
|
91,093
|
98,449
|
||||||||||||
Income (loss) before income taxes
|
8,281
|
(5,589
|
)
|
(1,946
|
)
|
(304
|
)
|
|||||||||
Income tax expense (benefit)
|
1,749
|
(1,163
|
)
|
(391
|
)
|
(40
|
)
|
|||||||||
Net income (loss)
|
6,532
|
(4,426
|
)
|
(1,555
|
)
|
(264
|
)
|
|||||||||
Preferred stock dividends
|
(100
|
)
|
(100
|
)
|
(199
|
)
|
(199
|
)
|
||||||||
Net income (loss) applicable to common shareholders
|
$
|
6,432
|
$
|
(4,526
|
)
|
$
|
(1,754
|
)
|
$
|
(463
|
)
|
|||||
Earnings (loss) per common share (basic)
|
$
|
.31
|
$
|
(.22
|
)
|
$
|
(.09
|
)
|
$
|
(.02
|
)
|
|||||
Earnings (loss) per common share (diluted)
|
$
|
.30
|
$
|
(.22
|
)
|
$
|
(.09
|
)
|
$
|
(.02
|
)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Net income (loss)
|
$
|
6,532
|
$
|
(4,426
|
)
|
$
|
(1,555
|
)
|
$
|
(264
|
)
|
|||||
Other comprehensive income:
|
||||||||||||||||
Available-for-sale fixed maturity securities:
|
||||||||||||||||
Gross unrealized holding gain arising in the period
|
19,997
|
7,964
|
9,117
|
16,404
|
||||||||||||
Related income tax effect
|
(4,200
|
)
|
(1,673
|
)
|
(1,915
|
)
|
(3,445
|
)
|
||||||||
Subtotal
|
15,797
|
6,291
|
7,202
|
12,959
|
||||||||||||
Less: reclassification adjustment for net realized gains included in net income (loss)
|
-
|
(610
|
)
|
(249
|
)
|
(882
|
)
|
|||||||||
Related income tax effect
|
-
|
128
|
52
|
185
|
||||||||||||
Subtotal
|
-
|
(482
|
)
|
(197
|
)
|
(697
|
)
|
|||||||||
Total other comprehensive income, net of tax
|
15,797
|
5,809
|
7,005
|
12,262
|
||||||||||||
Total comprehensive income
|
$
|
22,329
|
$
|
1,383
|
$
|
5,450
|
$
|
11,998
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Preferred stock:
|
||||||||||||||||
Balance, beginning of period
|
$
|
55
|
$
|
55
|
$
|
55
|
$
|
55
|
||||||||
Balance, end of period
|
55
|
55
|
55
|
55
|
||||||||||||
Common stock:
|
||||||||||||||||
Balance, beginning of period
|
22,401
|
22,401
|
22,401
|
22,401
|
||||||||||||
Balance, end of period
|
22,401
|
22,401
|
22,401
|
22,401
|
||||||||||||
Additional paid-in capital:
|
||||||||||||||||
Balance, beginning of period
|
57,777
|
57,417
|
57,820
|
57,414
|
||||||||||||
Restricted stock grants, net of forfeitures
|
(333
|
)
|
24
|
(377
|
)
|
24
|
||||||||||
Issuance of shares under stock plans
|
(9
|
)
|
3
|
(8
|
)
|
6
|
||||||||||
Balance, end of period
|
57,435
|
57,444
|
57,435
|
57,444
|
||||||||||||
Retained earnings:
|
||||||||||||||||
Balance, beginning of period
|
27,834
|
40,868
|
36,020
|
37,208
|
||||||||||||
Net income (loss)
|
6,532
|
(4,426
|
)
|
(1,555
|
)
|
(264
|
)
|
|||||||||
Dividends on common stock
|
-
|
-
|
-
|
(403
|
)
|
|||||||||||
Dividends accrued on preferred stock
|
(100
|
)
|
(100
|
)
|
(199
|
)
|
(199
|
)
|
||||||||
Balance, end of period
|
34,266
|
36,342
|
34,266
|
36,342
|
||||||||||||
Accumulated other comprehensive income (loss):
|
||||||||||||||||
Balance, beginning of period
|
1,667
|
(1,082
|
)
|
10,459
|
(7,535
|
)
|
||||||||||
Other comprehensive income, net of tax
|
15,797
|
5,809
|
7,005
|
12,262
|
||||||||||||
Balance, end of period
|
|
17,464
|
4,727
|
17,464
|
4,727
|
|||||||||||
Unearned Stock Grant Compensation:
|
||||||||||||||||
Balance, beginning of period
|
(584
|
)
|
(128
|
)
|
(781
|
)
|
(186
|
)
|
||||||||
Restricted stock grants, net of forfeitures
|
(37
|
)
|
(71
|
)
|
61
|
(71
|
)
|
|||||||||
Amortization of unearned compensation
|
155
|
49
|
254
|
107
|
||||||||||||
Balance, end of period
|
(466
|
)
|
(150
|
)
|
(466
|
)
|
(150
|
)
|
||||||||
Treasury Stock:
|
||||||||||||||||
Balance, beginning of period
|
(7,632
|
)
|
(8,044
|
)
|
(7,580
|
)
|
(7,985
|
)
|
||||||||
Restricted stock grants, net of forfeitures
|
370
|
47
|
316
|
47
|
||||||||||||
Purchase of 0 and 26,210 shares, as of 2020 and 2019, respectively, for treasury
|
-
|
(22
|
)
|
-
|
(71
|
)
|
||||||||||
Net shares acquired related to employee share-based compensation plans
|
(10
|
)
|
(35
|
)
|
(10
|
)
|
(49
|
)
|
||||||||
Issuance of shares under stock plans
|
11
|
5
|
13
|
9
|
||||||||||||
Balance, end of period
|
(7,261
|
)
|
(8,049
|
)
|
(7,261
|
)
|
(8,049
|
)
|
||||||||
Total shareholders’ equity
|
$
|
123,894
|
$
|
112,770
|
$
|
123,894
|
$
|
112,770
|
||||||||
Dividends declared on common stock per share
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(.02
|
)
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(1,555
|
)
|
$
|
(264
|
)
|
||
Adjustments to reconcile loss to net cash used in operating activities:
|
||||||||
Additions to acquisition costs, net
|
(287
|
)
|
(1,050
|
)
|
||||
Realized investment gains, net
|
(249
|
)
|
(1,995
|
)
|
||||
Unrealized losses (gains) on equity securities, net
|
7,100
|
(1,152
|
)
|
|||||
Distributions received from equity method investees
|
-
|
106
|
||||||
Compensation expense related to share awards
|
254
|
107
|
||||||
Depreciation and amortization
|
503
|
337
|
||||||
Deferred income tax benefit
|
(2,693
|
)
|
(612
|
)
|
||||
Increase in receivables, net
|
(6,078
|
)
|
(13,393
|
)
|
||||
Increase in insurance reserves and policyholder funds
|
2,805
|
13,493
|
||||||
(Decrease) increase in accounts payable and accrued expenses
|
(393
|
)
|
2,366
|
|||||
Other, net
|
1,151
|
(5,162
|
)
|
|||||
Net cash provided by (used in) operating activities
|
558
|
(7,219
|
)
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from investments sold
|
7,448
|
70,171
|
||||||
Proceeds from investments matured, called or redeemed
|
3,031
|
3,628
|
||||||
Investments purchased
|
(7,411
|
)
|
(67,220
|
)
|
||||
Additions to property and equipment
|
(160
|
)
|
(32
|
)
|
||||
Net cash provided by investing activities
|
2,908
|
6,547
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payment of dividends on common stock
|
-
|
(403
|
)
|
|||||
Proceeds from shares issued under stock plans
|
5
|
15
|
||||||
Treasury stock acquired — share repurchase authorization
|
-
|
(71
|
)
|
|||||
Treasury stock acquired — net employee share-based compensation
|
(10
|
)
|
(49
|
)
|
||||
Net cash used in financing activities
|
(5
|
)
|
(508
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
3,461
|
(1,180
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
12,893
|
12,630
|
||||||
Cash and cash equivalents at end of period
|
$
|
16,354
|
$
|
11,450
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Cash paid for interest
|
$
|
944
|
$
|
1,100
|
||||
Cash paid for income taxes
|
$
|
-
|
$
|
850
|
Note 1. |
Basis of Presentation
|
Note 2. |
Recently Issued Accounting Standards
|
Note 3. |
Investments
|
June 30, 2020
|
||||||||||||||||
Estimated
Fair Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Cost or
Amortized
Cost
|
|||||||||||||
Fixed maturities:
|
||||||||||||||||
Bonds:
|
||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies and authorities
|
$
|
20,461
|
$
|
1,739
|
$
|
25
|
$
|
18,747
|
||||||||
Obligations of states and political subdivisions
|
11,520
|
910
|
-
|
10,610
|
||||||||||||
Corporate securities:
|
||||||||||||||||
Utilities and telecom
|
28,886
|
4,118
|
-
|
24,768
|
||||||||||||
Financial services
|
73,151
|
6,050
|
132
|
67,233
|
||||||||||||
Other business – diversified
|
41,739
|
3,331
|
945
|
39,353
|
||||||||||||
Other consumer – diversified
|
60,180
|
7,407
|
404
|
53,177
|
||||||||||||
Total corporate securities
|
203,956
|
20,906
|
1,481
|
184,531
|
||||||||||||
Redeemable preferred stocks:
|
||||||||||||||||
Other consumer – diversified
|
250
|
58
|
—
|
192
|
||||||||||||
Total redeemable preferred stocks
|
250
|
58
|
—
|
192
|
||||||||||||
Total fixed maturities
|
$
|
236,187
|
$
|
23,613
|
$
|
1,506
|
$
|
214,080
|
December 31, 2019
|
||||||||||||||||
Estimated
Fair Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Cost or
Amortized
Cost
|
|||||||||||||
Fixed maturities:
|
||||||||||||||||
Bonds:
|
||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies and authorities
|
$
|
20,259
|
$
|
467
|
$
|
53
|
$
|
19,845
|
||||||||
Obligations of states and political subdivisions
|
11,940
|
371
|
53
|
11,622
|
||||||||||||
Corporate securities:
|
||||||||||||||||
Utilities and telecom
|
26,648
|
2,404
|
32
|
24,276
|
||||||||||||
Financial services
|
73,917
|
4,249
|
57
|
69,725
|
||||||||||||
Other business – diversified
|
41,706
|
2,335
|
98
|
39,469
|
||||||||||||
Other consumer – diversified
|
57,752
|
3,702
|
54
|
54,104
|
||||||||||||
Total corporate securities
|
200,023
|
12,690
|
241
|
187,574
|
||||||||||||
Redeemable preferred stocks:
|
||||||||||||||||
Other consumer – diversified
|
250
|
58
|
-
|
192
|
||||||||||||
Total redeemable preferred stocks
|
250
|
58
|
-
|
192
|
||||||||||||
Total fixed maturities
|
$
|
232,472
|
$
|
13,586
|
$
|
347
|
$
|
219,233
|
June 30, 2020
|
||||||||||||||||
Estimated
Fair Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Cost or
Amortized
Cost
|
|||||||||||||
Equity securities:
|
||||||||||||||||
Common and non-redeemable preferred stocks:
|
||||||||||||||||
Financial services
|
$
|
3,061
|
$
|
384
|
$
|
1
|
$
|
2,678
|
||||||||
Other business – diversified
|
12,904
|
8,271
|
-
|
4,633
|
||||||||||||
Total equity securities
|
$
|
15,965
|
$
|
8,655
|
$
|
1
|
$
|
7,311
|
|
December 31, 2019
|
|||||||||||||||
Estimated
Fair Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Cost or
Amortized
Cost
|
|||||||||||||
Equity securities:
|
||||||||||||||||
Common and non-redeemable preferred stocks:
|
||||||||||||||||
Financial services
|
$
|
3,159
|
624
|
-
|
2,535
|
|||||||||||
Other business – diversified
|
19,763
|
15,130
|
-
|
4,633
|
||||||||||||
Total equity securities
|
$
|
22,922
|
$
|
15,754
|
$
|
-
|
$
|
7,168
|
June 30, 2020
|
December 31, 2019
|
|||||||||||||||
Carrying
Value
|
Amortized
Cost
|
Carrying
Value
|
Amortized
Cost
|
|||||||||||||
Due in one year or less
|
$
|
509
|
$
|
500
|
$
|
-
|
$
|
-
|
||||||||
Due after one year through five years
|
19,923
|
19,012
|
14,664
|
14,280
|
||||||||||||
Due after five years through ten years
|
85,121
|
78,583
|
77,934
|
73,521
|
||||||||||||
Due after ten years
|
122,141
|
107,964
|
130,680
|
122,321
|
||||||||||||
Asset backed securities
|
8,493
|
8,021
|
9,194
|
9,111
|
||||||||||||
Totals
|
$
|
236,187
|
$
|
214,080
|
$
|
232,472
|
$
|
219,233
|
June 30, 2020
|
||||||||||||||||||||||||
Less than 12 months
|
12 months or longer
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies and authorities
|
$
|
887
|
$
|
25
|
$
|
-
|
$
|
-
|
$
|
887
|
$
|
25
|
||||||||||||
Corporate securities
|
22,512
|
1,481
|
-
|
-
|
22,512
|
1,481
|
||||||||||||||||||
Total temporarily impaired securities
|
$
|
23,399
|
$
|
1,506
|
$
|
-
|
$
|
-
|
$
|
23,399
|
$
|
1,506
|
December 31, 2019
|
||||||||||||||||||||||||
Less than 12 months
|
12 months or longer
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies and authorities
|
$
|
3,432
|
$
|
22
|
$
|
3,533
|
$
|
31
|
$
|
6,965
|
$
|
53
|
||||||||||||
Obligations of states and political subdivisions
|
3,106
|
53
|
-
|
-
|
3,106
|
53
|
||||||||||||||||||
Corporate securities
|
23,245
|
145
|
2,504
|
96
|
25,749
|
241
|
||||||||||||||||||
Total temporarily impaired securities
|
$
|
29,783
|
$
|
220
|
$
|
6,037
|
$
|
127
|
$
|
35,820
|
$
|
347
|
Three Months Ended
June 30, 2019
|
||||||||||||||||
Fixed
Maturities
|
Equity
Securities
|
Other
Invested
Assets
|
Total
|
|||||||||||||
Gains
|
$
|
610
|
$
|
—
|
$
|
—
|
$
|
610
|
||||||||
Losses
|
—
|
—
|
—
|
—
|
||||||||||||
Realized investment gains, net
|
$
|
610
|
$
|
—
|
$
|
—
|
$
|
610
|
Six Months Ended
June 30, 2020
|
||||||||||||||||
Fixed
Maturities
|
Equity
Securities
|
Other
Invested
Assets
|
Total
|
|||||||||||||
Gains
|
$
|
249
|
$
|
—
|
$
|
—
|
$
|
249
|
||||||||
Losses
|
—
|
—
|
—
|
—
|
||||||||||||
Realized investment gains, net
|
$
|
249
|
$
|
—
|
$
|
—
|
$
|
249
|
Six Months Ended
June 30, 2019
|
||||||||||||||||
Fixed
Maturities
|
Equity
Securities
|
Other
Invested
Assets
|
Total
|
|||||||||||||
Gains
|
$
|
882
|
$
|
1,113
|
$
|
—
|
$
|
1,995
|
||||||||
Losses
|
—
|
—
|
—
|
—
|
||||||||||||
Realized investment gains, net
|
$
|
882
|
$
|
1,113
|
$
|
—
|
$
|
1,995
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Net realized and unrealized gains (losses) recognized during the period on equity securities
|
$
|
1,355
|
$
|
(5,337
|
)
|
$
|
(7,100
|
)
|
$
|
2,265
|
||||||
Less: Net realized gains (losses) recognized during the period on equity securities sold during the period
|
-
|
-
|
-
|
1,113
|
||||||||||||
Unrealized gains (losses) recognized during the reporting period on equity securities, net
|
$
|
1,355
|
$
|
(5,337
|
)
|
$
|
(7,100
|
)
|
$
|
1,152
|
Note 4. |
Fair Values of Financial Instruments
|
Level 1 |
Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. The Company’s financial instruments valued using Level 1 criteria include
cash equivalents and exchange traded common stocks.
|
Level 2 |
Observable inputs, other than quoted prices included in Level 1, for an asset or liability or prices for similar assets or liabilities. The Company’s financial instruments valued using Level 2 criteria include significantly most of its fixed
maturities, which consist of U.S. Treasury securities, U.S. Government securities, obligations of states and political subdivisions, and certain corporate fixed maturities, as well as its non-redeemable preferred stocks. In determining fair
value measurements of its fixed maturities and non-redeemable preferred stocks using Level 2 criteria, the Company utilizes data from outside sources, including nationally recognized pricing services and broker/dealers. Prices for the majority
of the Company’s Level 2 fixed maturities and non-redeemable preferred stocks were determined using unadjusted prices received from pricing services that utilize models where the significant inputs are observable (e.g. interest rates, yield
curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data.
|
Level 3 |
Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Fair value is based on criteria that use assumptions or other data that are not readily
observable from objective sources. With little or no observable market, the determination of fair values uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the
asset or liability.
|
Quoted Prices
in Active
Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Fixed maturities
|
$
|
250
|
$
|
235,937
|
$
|
—
|
$
|
236,187
|
||||||||
Equity securities
|
15,822
|
—
|
143
|
15,965
|
||||||||||||
Cash equivalents
|
8,429
|
—
|
—
|
8,429
|
||||||||||||
Total
|
$
|
24,501
|
$
|
235,937
|
$
|
143
|
$
|
260,581
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Fixed maturities
|
$
|
—
|
$
|
232,472
|
$
|
—
|
$
|
232,472
|
||||||||
Equity securities
|
22,922
|
—
|
—
|
22,922
|
||||||||||||
Cash equivalents
|
7,173
|
—
|
—
|
7,173
|
||||||||||||
Total
|
$
|
30,095
|
$
|
232,472
|
$
|
—
|
$
|
262,567
|
June 30, 2020
|
December 31, 2019
|
|||||||||||||||||||
Level in Fair
Value
Hierarchy (1)
|
Carrying
Amount
|
Estimated
Fair Value
|
Carrying
Amount
|
Estimated
Fair Value
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
Level 1
|
$
|
16,354
|
$
|
16,354
|
$
|
12,893
|
$
|
12,893
|
|||||||||||
Fixed maturities
|
(1)
|
236,187
|
236,187
|
232,472
|
232,472
|
|||||||||||||||
Equity securities
|
(1)
|
15,965
|
15,965
|
22,922
|
22,922
|
|||||||||||||||
Other invested assets
|
Level 3
|
11,454
|
11,454
|
9,960
|
9,960
|
|||||||||||||||
Policy loans
|
Level 2
|
2,018
|
2,018
|
2,007
|
2,007
|
|||||||||||||||
Real estate
|
Level 2
|
38
|
38
|
38
|
38
|
|||||||||||||||
Investment in unconsolidated trusts
|
Level 2
|
1,238
|
1,238
|
1,238
|
1,238
|
|||||||||||||||
Liabilities:
|
||||||||||||||||||||
Junior subordinated debentures, net
|
Level 2
|
33,738
|
30,321
|
33,738
|
35,977
|
(1) |
See the aforementioned information for a description of the fair value hierarchy as well as a disclosure of levels for classes of these financial assets.
|
Note 5. |
Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross
|
$
|
81,448
|
$
|
72,612
|
||||
Less: Reinsurance recoverable on unpaid losses
|
(18,339
|
)
|
(14,354
|
)
|
||||
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net
|
63,109
|
58,258
|
||||||
Incurred related to:
|
||||||||
Current accident year
|
62,262
|
68,157
|
||||||
Prior accident year development (1)
|
(2,302
|
)(2)
|
103
|
|||||
Total incurred
|
59,960
|
68,260
|
||||||
Paid related to:
|
||||||||
Current accident year
|
33,911
|
38,875
|
||||||
Prior accident years
|
29,587
|
28,576
|
||||||
Total paid
|
63,498
|
67,451
|
||||||
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net
|
59,571
|
59,067
|
||||||
Plus: Reinsurance recoverable on unpaid losses
|
16,927
|
16,088
|
||||||
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross
|
$
|
76,498
|
$
|
75,155
|
(1) |
In establishing property and casualty reserves, the Company initially reserves for losses at the higher end of the reasonable range if no other value within the range is determined to be more probable. Selection of such an initial loss
estimate is an attempt by management to give recognition that initial claims information received generally is not conclusive with respect to legal liability, is generally not comprehensive with respect to magnitude of loss and generally, based
on historical experience, will develop more adversely as time passes and more information becomes available. Accordingly, the Company generally experiences reserve redundancies when analyzing the development of prior year losses in a current
period.
|
(2) |
Prior years’ development was primarily the result of favorable development in the loss and claim reserves for the Medicare supplement line of business in Bankers Fidelity.
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Total incurred losses
|
$
|
59,960
|
$
|
68,260
|
||||
Cash surrender value and matured endowments
|
697
|
588
|
||||||
Benefit reserve changes
|
2
|
610
|
||||||
Total insurance benefits and losses incurred
|
$
|
60,659
|
$
|
69,458
|
Note 6. |
Junior Subordinated Debentures
|
Atlantic American
Statutory Trust I
|
Atlantic American
Statutory Trust II
|
|||||||
JUNIOR SUBORDINATED DEBENTURES (1) (2)
|
||||||||
Principal amount owed June 30, 2020
|
$
|
18,042
|
$
|
23,196
|
||||
Less: Treasury debt (3)
|
—
|
(7,500
|
)
|
|||||
Net balance June 30, 2020
|
$
|
18,042
|
$
|
15,696
|
||||
Net balance December 31, 2019
|
$
|
18,042
|
$
|
15,696
|
||||
Coupon rate
|
LIBOR + 4.00
|
% |
LIBOR + 4.10
|
% | ||||
Interest payable
|
Quarterly
|
Quarterly
|
||||||
Maturity date
|
December 4, 2032
|
May 15, 2033
|
||||||
Redeemable by issuer
|
Yes
|
Yes
|
||||||
TRUST PREFERRED SECURITIES
|
||||||||
Issuance date
|
December 4, 2002
|
May 15, 2003
|
||||||
Securities issued
|
17,500
|
22,500
|
||||||
Liquidation preference per security
|
$
|
1
|
$
|
1
|
||||
Liquidation value
|
$
|
17,500
|
$
|
22,500
|
||||
Coupon rate
|
LIBOR + 4.00
|
% |
LIBOR + 4.10
|
% | ||||
Distribution payable
|
Quarterly
|
Quarterly
|
||||||
Distribution guaranteed by (4)
|
Atlantic American
Corporation
|
Atlantic American
Corporation
|
(1) |
For each of the respective debentures, the Company has the right at any time, and from time to time, to defer payments of interest on the Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters up to the debentures’
respective maturity dates. During any such period, interest will continue to accrue and the Company may not declare or pay any cash dividends or distributions on, or purchase, the Company’s common stock nor make any principal, interest or
premium payments on or repurchase any debt securities that rank equally with or junior to the Junior Subordinated Debentures. The Company has the right at any time to dissolve each of the trusts and cause the Junior Subordinated Debentures to
be distributed to the holders of the Trust Preferred Securities.
|
(2) |
The Junior Subordinated Debentures are unsecured and rank junior and subordinate in right of payment to all senior debt of the Parent and are effectively subordinated to all existing and future liabilities of its subsidiaries.
|
(3) |
On August 4, 2014, the Company acquired $7,500 of the Junior Subordinated Debentures.
|
(4) |
The Parent has guaranteed, on a subordinated basis, all of the obligations under the Trust Preferred Securities, including payment of the redemption price and any accumulated and unpaid distributions to the extent of available funds and upon
dissolution, winding up or liquidation.
|
Note 7. |
Earnings (Loss) Per Common Share
|
Three Months Ended
June 30, 2020
|
||||||||||||
Income
|
Weighted
Average
Shares
(In thousands)
|
Per Share
Amount
|
||||||||||
Basic Earnings Per Common Share:
|
||||||||||||
Net income
|
$
|
6,532
|
20,440
|
|||||||||
Less preferred stock dividends
|
(100
|
)
|
—
|
|||||||||
Net income applicable to common shareholders
|
6,432
|
20,440
|
$
|
.31
|
||||||||
Diluted Earnings Per Common Share:
|
||||||||||||
Effect of Series D preferred stock
|
100
|
1,378
|
||||||||||
Net income applicable to common shareholders
|
$
|
6,532
|
21,818
|
$
|
.30
|
Three Months Ended
June 30, 2019
|
||||||||||||
Loss
|
Weighted
Average
Shares
(In thousands)
|
|
Per Share Amount |
|||||||||
Basic and Diluted Loss Per Common Share:
|
|
|||||||||||
Net loss
|
$
|
(4,426
|
)
|
20,146
|
||||||||
Less preferred stock dividends
|
(100
|
)
|
—
|
|||||||||
Net loss applicable to common shareholders
|
$
|
(4,526
|
)
|
20,146
|
|
$ | (.22 | ) |
Six Months Ended
June 30, 2020
|
||||||||||||
Loss
|
Weighted
Average
Shares
(In thousands)
|
|
Per Share Amount | |||||||||
Basic and Diluted Loss Per Common Share:
|
||||||||||||
Net loss
|
$
|
(1,555
|
)
|
20,455
|
||||||||
Less preferred stock dividends
|
(199
|
)
|
—
|
|||||||||
Net loss applicable to common shareholders
|
$
|
(1,754
|
)
|
20,455
|
|
$ |
(.09 | ) |
Six Months Ended
June 30, 2019
|
||||||||||||
Loss
|
Weighted
Average
Shares
(In thousands)
|
|
Per Share Amount |
|||||||||
Basic and Diluted Loss Per Common Share:
|
|
|||||||||||
Net loss
|
$
|
(264
|
)
|
20,152
|
||||||||
Less preferred stock dividends
|
(199
|
)
|
—
|
|||||||||
Net loss applicable to common shareholders
|
$
|
(463
|
)
|
20,152
|
|
$ | (.02 |
) |
Note 8. |
Income Taxes
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Federal income tax provision at statutory rate of 21%
|
$
|
1,739
|
$
|
(1,174
|
)
|
$
|
(409
|
)
|
$
|
(64
|
)
|
|||||
Dividends-received deduction
|
(3
|
)
|
(5
|
)
|
(6
|
)
|
(14
|
)
|
||||||||
Other permanent differences
|
13
|
16
|
24
|
38
|
||||||||||||
Income tax expense (benefit)
|
$
|
1,749
|
$
|
(1,163
|
)
|
$
|
(391
|
)
|
$
|
(40
|
)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Current – Federal
|
$
|
2,173
|
$
|
572
|
$
|
2,302
|
$
|
572
|
||||||||
Deferred – Federal
|
(424
|
)
|
(1,735
|
)
|
(2,693
|
)
|
(612
|
)
|
||||||||
Total
|
$
|
1,749
|
$
|
(1,163
|
)
|
$
|
(391
|
)
|
$
|
(40
|
)
|
Note 9. |
Leases
|
Six Months Ended
June 30,
|
||||||||
Other information on operating leases:
|
2020
|
2019
|
||||||
Cash payments included in the measurement of lease liabilities reported in operating cash flows
|
$
|
475
|
$
|
450
|
||||
Right-of-use assets included in other assets on the condensed consolidated balance sheet
|
5,159
|
5,785
|
||||||
Weighted average discount rate
|
6.8
|
%
|
6.8
|
%
|
||||
Weighted average remaining lease term in years
|
6.4 years
|
7.4 years
|
Lease Liability
|
||||
Remainder of 2020
|
$
|
503
|
||
2021
|
1,015
|
|||
2022
|
1,031
|
|||
2023
|
1,048
|
|||
2024
|
1,065
|
|||
Thereafter
|
2,025
|
|||
Total undiscounted lease payments
|
6,687
|
|||
Less: present value adjustment
|
1,297
|
|||
Operating lease liability included in accounts payable and accrued expenses on the condensed consolidated balance sheet
|
$
|
5,390
|
Note 10. |
Commitments and Contingencies
|
Note 11. |
Segment Information
|
Assets
|
June 30,
2020
|
December 31,
2019
|
||||||
American Southern
|
$
|
153,632
|
$
|
141,524
|
||||
Bankers Fidelity
|
220,111
|
224,122
|
||||||
Corporate and Other
|
11,994
|
11,980
|
||||||
Total assets
|
$
|
385,737
|
$
|
377,626
|
Revenues
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
American Southern
|
$
|
16,896
|
$
|
15,740
|
$
|
32,123
|
$
|
30,975
|
||||||||
Bankers Fidelity
|
32,871
|
31,244
|
57,744
|
65,620
|
||||||||||||
Corporate and Other
|
(30
|
)
|
(3,857
|
)
|
(720
|
)
|
1,550
|
|||||||||
Total revenue
|
$
|
49,737
|
$
|
43,127
|
$
|
89,147
|
$
|
98,145
|
Income (Loss) Before Income Taxes
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
American Southern
|
$
|
2,087
|
$
|
1,396
|
$
|
2,965
|
$
|
3,378
|
||||||||
Bankers Fidelity
|
8,039
|
(1,998
|
)
|
(742
|
)
|
(2,494
|
)
|
|||||||||
Corporate and Other
|
(1,845
|
)
|
(4,987
|
)
|
(4,169
|
)
|
(1,188
|
)
|
||||||||
Income (loss) before income taxes
|
$
|
8,281
|
$
|
(5,589
|
)
|
$
|
(1,946
|
)
|
$
|
(304
|
)
|
Note 12. |
Related Party Transactions
|
Note 13. |
Subsequent Events
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Insurance premiums, net
|
$
|
46,499
|
$
|
45,469
|
$
|
92,049
|
$
|
90,251
|
||||||||
Net investment income
|
1,850
|
2,313
|
3,889
|
4,647
|
||||||||||||
Realized investment gains, net
|
-
|
610
|
249
|
1,995
|
||||||||||||
Unrealized gains (losses) on equity securities, net
|
1,355
|
(5,337
|
)
|
(7,100
|
)
|
1,152
|
||||||||||
Other income
|
33
|
72
|
60
|
100
|
||||||||||||
Total revenue
|
49,737
|
43,127
|
89,147
|
98,145
|
||||||||||||
Insurance benefits and losses incurred
|
27,076
|
34,151
|
60,659
|
69,458
|
||||||||||||
Commissions and underwriting expenses
|
10,854
|
11,509
|
23,480
|
22,524
|
||||||||||||
Interest expense
|
414
|
545
|
890
|
1,091
|
||||||||||||
Other expense
|
3,112
|
2,511
|
6,064
|
5,376
|
||||||||||||
Total benefits and expenses
|
41,456
|
48,716
|
91,093
|
98,449
|
||||||||||||
Income (loss) before income taxes
|
$
|
8,281
|
$
|
(5,589
|
)
|
$
|
(1,946
|
)
|
$
|
(304
|
)
|
|||||
Net income (loss)
|
$
|
6,532
|
$
|
(4,426
|
)
|
$
|
(1,555
|
)
|
$
|
(264
|
)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
Reconciliation of Non-GAAP Financial Measure
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
(In thousands)
|
||||||||||||||||
Net income (loss)
|
$
|
6,532
|
$
|
(4,426
|
)
|
$
|
(1,555
|
)
|
$
|
(264
|
)
|
|||||
Income tax expense (benefit)
|
1,749
|
(1,163
|
)
|
(391
|
)
|
(40
|
)
|
|||||||||
Realized investment gains, net
|
-
|
(610
|
)
|
(249
|
)
|
(1,995
|
)
|
|||||||||
Unrealized (gains) losses on equity securities, net
|
(1,355
|
)
|
5,337
|
7,100
|
(1,152
|
)
|
||||||||||
Non-GAAP operating income (loss)
|
$
|
6,926
|
$
|
(862
|
)
|
$
|
4,905
|
$
|
(3,451
|
)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Gross written premiums
|
$
|
33,320
|
$
|
32,581
|
$
|
42,938
|
$
|
40,275
|
||||||||
Ceded premiums
|
(1,451
|
)
|
(1,313
|
)
|
(2,845
|
)
|
(2,688
|
)
|
||||||||
Net written premiums
|
$
|
31,869
|
$
|
31,268
|
$
|
40,093
|
$
|
37,587
|
||||||||
Net earned premiums
|
$
|
15,824
|
$
|
14,754
|
$
|
30,746
|
$
|
28,560
|
||||||||
Net loss and loss adjustment expenses
|
10,021
|
9,863
|
19,555
|
18,906
|
||||||||||||
Commissions and underwriting expenses
|
4,788
|
4,480
|
9,602
|
8,690
|
||||||||||||
Underwriting income
|
$
|
1,015
|
$
|
411
|
$
|
1,589
|
$
|
964
|
||||||||
Loss ratio
|
63.3
|
%
|
66.8
|
%
|
63.6
|
%
|
66.2
|
%
|
||||||||
Expense ratio
|
30.3
|
30.4
|
31.2
|
30.4
|
||||||||||||
Combined ratio
|
93.6
|
%
|
97.2
|
%
|
94.8
|
%
|
96.6
|
%
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Automobile liability
|
$
|
8,223
|
$
|
7,813
|
$
|
15,363
|
$
|
14,837
|
||||||||
Automobile physical damage
|
4,472
|
3,799
|
9,020
|
7,401
|
||||||||||||
General liability
|
888
|
819
|
1,739
|
1,603
|
||||||||||||
Surety
|
1,441
|
1,608
|
3,046
|
3,295
|
||||||||||||
Other lines
|
800
|
715
|
1,578
|
1,424
|
||||||||||||
Total
|
$
|
15,824
|
$
|
14,754
|
$
|
30,746
|
$
|
28,560
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Medicare supplement
|
$
|
43,787
|
$
|
44,541
|
$
|
88,102
|
$
|
88,870
|
||||||||
Other health products
|
2,311
|
1,896
|
4,495
|
3,886
|
||||||||||||
Life insurance
|
2,557
|
2,154
|
4,814
|
4,296
|
||||||||||||
Gross earned premiums
|
48,655
|
48,591
|
97,411
|
97,052
|
||||||||||||
Ceded premiums
|
(17,980
|
)
|
(17,876
|
)
|
(36,108
|
)
|
(35,361
|
)
|
||||||||
Net earned premiums
|
30,675
|
30,715
|
61,303
|
61,691
|
||||||||||||
Insurance benefits and losses
|
17,055
|
24,288
|
41,104
|
50,552
|
||||||||||||
Commissions and underwriting expenses
|
7,778
|
8,954
|
17,382
|
17,562
|
||||||||||||
Total expenses
|
24,833
|
33,242
|
58,486
|
68,114
|
||||||||||||
Underwriting income (loss)
|
$
|
5,842
|
$
|
(2,527
|
)
|
$
|
2,817
|
$
|
(6,423
|
)
|
||||||
Loss ratio
|
55.6
|
%
|
79.1
|
%
|
67.1
|
%
|
81.9
|
%
|
||||||||
Expense ratio
|
25.4
|
29.2
|
28.4
|
28.5
|
||||||||||||
Combined ratio
|
81.0
|
%
|
108.3
|
%
|
95.5
|
%
|
110.4
|
%
|
Period
|
Total Number
of Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased
as Part of
Publicly
Announced Plans
or Programs
|
Maximum
Number of
Shares that
May Yet be
Purchased
Under the
Plans or
Programs
|
||||||||||||
April 1 – April 30, 2020
|
-
|
$
|
-
|
-
|
325,129
|
|||||||||||
May 1 – May 31, 2020
|
-
|
-
|
-
|
325,129
|
||||||||||||
June 1 – June 30, 2020
|
-
|
-
|
-
|
325,129
|
||||||||||||
Total
|
-
|
$
|
-
|
-
|
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101. INS
|
XBRL Instance Document.
|
101. SCH
|
XBRL Taxonomy Extension Schema.
|
101. CAL
|
XBRL Taxonomy Extension Calculation Linkbase.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase.
|
ATLANTIC AMERICAN CORPORATION
|
|||
(Registrant)
|
|||
Date: August 11, 2020
|
By:
|
/s/ J. Ross Franklin
|
|
J. Ross Franklin
|
|||
Vice President and Chief Financial Officer
|
|||
(Principal Financial and Accounting Officer)
|
1. |
I have reviewed this report on Form 10-Q of Atlantic American Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the
audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 11, 2020
|
/s/ Hilton H. Howell, Jr.
|
|
Hilton H. Howell, Jr.
|
||
President and Chief Executive Officer
|
1. |
I have reviewed this report on Form 10-Q of Atlantic American Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the
audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 11, 2020
|
/s/ J. Ross Franklin
|
|
J. Ross Franklin
|
||
Vice President and
|
||
Chief Financial Officer
|
(1) |
The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
Date: August 11, 2020
|
/s/ Hilton H. Howell, Jr.
|
|
Hilton H. Howell, Jr.
|
||
President and Chief Executive Officer
|
||
Date: August 11, 2020
|
/s/ J. Ross Franklin
|
|
J. Ross Franklin
|
||
Vice President and
|
||
Chief Financial Officer
|