- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM 10-Q
-----------
|X| Quarterly Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
OR
|_| Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
-----------
Commission File Number 0-3722
ATLANTIC AMERICAN CORPORATION
Incorporated pursuant to the laws of the State of Georgia
-----------
Internal Revenue Service-- Employer Identification No.
58-1027114
Address of Principal Executive Offices:
4370 Peachtree Road, N.E., Atlanta, Georgia 30319
(404) 266-5500
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES |X| NO |_|
The total number of shares of the registrant's Common Stock, $1 par value,
outstanding on May 7, 1998, was 18,919,077.
- --------------------------------------------------------------------------------
ATLANTIC AMERICAN CORPORATION
INDEX
Part 1. Financial Information Page No.
- ------------------------------ --------
Item 1. Financial Statements:
Consolidated Balance Sheets -
March 31, 1998 and December 31, 1997 2
Consolidated Statements of Operations -
Three months ended March 31, 1998 and 1997 3
Consolidated Statement of Shareholders' Equity -
Three months ended March 31, 1998 and 1997 4
Consolidated Statements of Cash Flows -
Three months ended March 31, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-10
Part II. Other Information
- ---------------------------
Item 6. Exhibits and Report on Form 8-K 11
Signature 12
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
- ------------------------------
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands, except share and per share data)
March 31, December 31,
1998 1997
------------------------
Cash, including short-term investments of
$52,062 and $46,167 $ 54,097 $ 51,044
------------------------
Investments:
Bonds (Cost: $85,514 and $91,143) 86,630 92,184
Common and preferred stocks (cost: $24,639
and $18,359) 54,866 46,876
Investments in limited partnerships (cost:
$4,126 and $4,001) 4,115 3,941
Mortgage loans 4,217 4,243
Policy and student loans 2,758 5,293
Real estate 46 46
------------------------
Total investments 152,632 152,583
Receivables:
Reinsurance 25,454 25,164
Other (net of allowance for bad debts:
$942 and $916) 31,513 17,470
Deferred acquisition costs 17,080 16,483
Other assets 4,849 4,510
Goodwill 4,056 4,606
========================
Total assets $289,681 $271,860
========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Insurance reserves and policy funds:
Future policy benefits $ 38,500 $ 39,188
Unearned premiums 34,235 24,412
Losses and claims 88,431 86,721
Other policy liabilities 4,293 3,997
------------------------
Total policy liabilities 165,459 154,318
Accounts payable and accrued expenses 15,352 10,759
Debt payable 27,600 28,600
------------------------
Total liabilities 208,411 193,677
------------------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $1 par, 4,000,000 shares authorized;
Series A preferred, 30,000 shares issued and
outstanding, $3,000 redemption value 30 30
Series B preferred, 134,000 shares issued and
outstanding, $13,400 redemption value 134 134
Common stock, $1 par, 30,000,000 shares authorized;
18,935,993 shares issued in 1998 and 18,920,728
shares issued in 1997; 18,916,957 shares
outstanding in 1998 and 18,907,267 shares
outstanding in 1997 18,936 18,921
Additional paid-in capital 52,988 53,316
Accumulated deficit (22,056) (23,653)
Accumulated other comprehensive income -
unrealized investment gains, net 31,332 29,498
Treasury stock, at cost, 19,036 shares 1998
and 13,461 shares in 1997 (94) (63)
------------------------
Total shareholders' equity 81,270 78,183
========================
Total liabilities and
shareholders' equity $289,681 $271,860
========================
The accompanying notes are an integral part of
these consolidated financial statements.
-2-
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
(In thousands, except per share data) 1998 1997
------------------
Revenue:
Insurance premiums $22,958 $21,775
Investment income 2,924 2,875
Realized investment gains, net 518 39
Other income 112 2
------------------
Total revenue 26,512 24,691
------------------
Benefits and expenses:
Insurance benefits and losses incurred 15,522 14,532
Commissions and underwriting expenses 7,278 6,044
Interest expense 568 733
Other 1,519 1,404
------------------
Total benefits and expenses 24,887 22,713
------------------
Income before income tax expense 1,625 1,978
Income tax expense 26 40
------------------
Net income $ 1,599 $ 1,938
==================
Net income per common share (basic and diluted) $ .06 $ .08
==================
Weighted average common shares outstanding basic 18,909 18,684
==================
Weighted average common shares outstanding,
diluted 19,231 18,815
==================
The accompanying notes are an integral part of
these consolidated financial statements.
-3-
ATLANTIC AMERICAN CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Net
Additional Unrealized
Preferred Common Paid-in Accumulated Investment Treasury
Three Months Ended March 31, 1998 Stock Stock Capital Deficit Gains Stock Total
- --------------------------------- ---------------------------------------------------------------------------------------------
Balance, December 31,1997 $ 164 $18,921 $ 53,316 $ (23,653) $29,498 $ (63) $ 78,183
Comprehensive income:
Net income 1,599 1,599
Increase in unrealized
investment gains 1,834 1,834
--------
Total comprehensive income 3,433
--------
Cash dividends paid on preferred stock (79) (79)
Dividends accrued on preferred stock (302) (302)
Purchase of shares for treasury (58) (58)
Issuance of shares for employee benefit -
plans and stock options 2 (2) 27 27
Issuance of shares for acquisition of -
Self-Insurance Administrators, Inc. 15 51 66
---------------------------------------------------------------------------------------------
Balance, March 31, 1997 $ 164 $18,936 $ 52,988 $ (22,056) $31,332 $ (94) $ 81,270
=============================================================================================
Three Months Ended March 31, 1997
- ---------------------------------
Balance, December 31, 1996 $ 164 $18,712 $ 54,062 $ (31,426) $17,713 $ (89) $ 59,136
Comprehensive income:
Net income 1,938 1,938
Decrease in unrealized investment gains (1,870) (1,870)
---------
Total comprehensive income 68
---------
Cash dividends paid on preferred stock (79) (79)
Dividends accrued on preferred stock (301) (301)
Purchase of shares for treasury (34) (34)
Issuance of shares for employee benefit
plans and stock options (2) 5 3
---------------------------------------------------------------------------------------------
Balance, March 31, 1997 $ 164 $18,712 $ 53,682 $ (29,490) $15,843 $(118) $ 58,793
=============================================================================================
The accompanying notes are an integral part of
these consolidated financial statements.
-4-
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
-------------------
1998 1997
-------------------
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,599 $ 1,938
Adjustments to reconcile net income to net
cash used by operating activities:
Amortization of deferred acquisition costs 2,055 2,143
Acquisition costs deferred (2,745) (2,221)
Realized investment gains (518) (39)
Increase in insurance reserves 11,129 13,386
Depreciation and amortization 228 269
Increase in receivables, net (14,327) (14,327)
Increase (decrease) in other liabilities 4,291 (2,343)
Other, net (296) 311
-------------------
Net cash provided (used) by operating
activities 1,416 (883)
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investments sold or matured 23,763 17,342
Investments purchased (21,377) (15,943)
Reduction in minority interest liability payable - (46)
Additions to property and equipment (175) (192)
Bulk reinsurance transactions, net 564 -
-------------------
Net cash provided by investing activities 2,775 1,161
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Preferred stock dividends (79) (79)
Proceeds from exercise of stock options - 3
Purchase of treasury shares (59) (60)
Repayments of debt (1,000) (1,000)
-------------------
Net cash used by financing activities (1,138) (1,136)
-------------------
Net (decrease) increase in cash and cash equivalents 3,053 (858)
Cash and cash equivalents at beginning of period 51,044 45,499
-------------------
Cash and cash equivalents at end of period $54,097 $44,641
===================
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 568 $ 621
===================
Cash paid for income taxes $ - $ 25
===================
The accompanying notes are an integral part of
these consolidated financial statements.
-5-
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
Note 1. Basis of presentation.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. All significant intercompany accounts and transactions have been
eliminated in consolidation. Operating results for the three month period ended
March 31, 1998, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998. For further information, refer
to the financial statements and footnotes thereto included or incorporated by
reference in the Company's annual report on Form 10-K for the year ended
December 31, 1997.
Note 2. Adoption of new accounting standards.
As of January 1, 1998, the Company adopted the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 130 (Statement
130), Reporting Comprehensive Income. Statement 130 establishes new rules for
the reporting and display of comprehensive income and its components; however,
the adoption of this Statement has no impact on the Company's net income or
shareholders' equity. Statement 130 requires unrealized gains or losses on the
Company's available-for-sale securities to be included in other comprehensive
income, while prior to adoption of Statement 130 they were reported separately
in shareholders' equity. Prior year financial statements have been reclassified
to conform to the requirements of Statement 130.
Effective January 1, 1998, the Company adopted the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 131 (Statement
131), Disclosures about Segments of an Enterprise and Related Information.
Statement 131 supersedes FASB Statement No. 14, Financial Reporting for Segments
of a Business Enterprise. Statement 131 establishes standards for reporting
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports. The adoption of Statement 131 did not affect the
Company's results of operations or financial position.
Note 3. Segment Information
The following summary sets forth information for each of the Company's
business segments by revenue and income (loss) before income tax provision
(benefit). The Company divides its operations into 3 segments: Property and
Casualty Insurance, Life Insurance, and Accident and Health Insurance.
Property Accident Corporate Adjustments
and and and and
Casualty Life Health Other Eliminations Consolidated
------------------------------------------------------------------------------------
March 31, 1998:
Revenue $ 16,741 $ 3,927 $ 5,701 $ 158 $ (15) $ 26,512
Income (loss) before
income tax expense
(benefit) 1,812 574 124 (885) 0 1,625
March 31, 1997:
Revenue $ 16,997 $ 3,518 $ 4,192 $ 12 $ (28) $ 24,691
Income (loss) before
income tax expense 2,033 260 250 (565) 0 1,978
(benefit)
-6-
Note 4. Reconciliation of Other Comprehensive Income
March 31,
1998 1997
---------------------
Gain on sale of securities included in net income
$ 518 $ 39
=====================
Other comprehensive income:
Net unrealized gain (loss) arising during year $2,352 $(1,831)
Reclassification adjustment (518) (39)
---------------------
Net unrealized gain (loss) recognized
in other comprehensive income $1,834 $(1,870)
=====================
-7-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion of financial condition and results of operations
for the three month periods ended March 31, 1998 and 1997 analyzes the results
of operations, consolidated financial condition, liquidity and capital resources
of Atlantic American Corporation (the "Company") and its consolidated
subsidiaries: Georgia Casualty & Surety Company ("Georgia Casualty"), American
Southern Insurance Company ("American Southern" and together with Georgia
Casualty, the "Casualty Division"), Bankers Fidelity Life Insurance Company
("Bankers Fidelity"), American Independent Life Insurance Company ("American
Independent" and together with Bankers Fidelity, the "Life and Health
Division"), and Self-Insurance Administrators, Inc. ("SIA, Inc.").
Atlantic American Corporation's net income for the first quarter of 1998
was $1.6 million ($.06 per diluted share) compared to net income of $1.9 million
($.08 per diluted share) for the first quarter of 1997. The decline in net
income was principally the result of increases in claims in the Company's
supplemental health business and increased claims in the workers' compensation
line of business, both of which were offset somewhat by favorable claims results
in the Company's large block of automobile business. The results for the quarter
were also impacted by higher commission costs.
Pretax net income in the Company's Life and Health Division was up 36%,
while net income in the Casualty Division was down 11%. The Company's most
recent acquisition, SIA, Inc., contributed $94,000 to the Company's net income.
RESULTS OF OPERATIONS
Total revenue for the Company was up 7.4% for the first quarter of 1998,
increasing from $24.7 million in the first quarter of 1997 to $26.5 million.
This increase is attributable to a $1.2 million increase in insurance premiums.
In the Company's Casualty Division, premiums were down $618,000 for the
quarter. This decline in premiums is attributable to a $1.2 million decline in
premiums at American Southern, offset by an increase in premiums at Georgia
Casualty of $584,000. The decline in premiums at American Southern is primarily
the result of a decrease in the net rate charged for one of the company's large
block accounts. Management believes that while this net rate has declined, the
account will continue to be profitable. Insurance premiums in the Life and
Health Division were up 28% or $1.8 million. Of this increase, $990,000 is
attributable to the acquisition of American Independent, which was acquired on
October 1, 1997. The remainder of the increase is principally the result of a
refocused marketing campaign at Bankers Fidelity that began in the first quarter
of 1998.
The modest increase in investment income is the result of a small
improvement in the overall return of the Company's investment portfolio. In the
fourth quarter of 1997, the Company made a repayment on its bank debt of $3.0
million using proceeds from its investment portfolio, which has slowed the
overall growth in the Company's investment portfolio. Realized investment gains
for the first quarter of 1998 were $518,000, compared to $39,000 for the first
quarter of 1997. Management is continually evaluating the composition of the
Company's investment portfolio and will periodically divest highly appreciated
investments in an effort to improve the overall yield of the portfolio. The
Casualty Division recognized a realized gain of $289,000 for the first quarter
of 1998, compared to an $81,000 realized loss in the first quarter of 1997. The
Life and Health Division realized gains of $172,000 for the quarter, compared to
$120,000 in 1997.
Other income increased $110,000, primarily as a result of the inclusion of
SIA, Inc. in the first quarter of 1998.
Insurance benefits and losses increased by 6.8% to $15.5 million, from
$14.5 million in the first quarter of 1997. The increase is attributable to an
increase in benefits and losses in the Life and Health Division of $1.7 million
and a decrease in benefits and losses of $700,000 in the Casualty Division.
American Southern experienced a decline of $1.9 million in the first quarter of
1998, while benefits and losses at Georgia Casualty were up $1.2 million.
As a percentage of premium revenue, insurance benefits and losses incurred
for the first quarter of 1998 were up slightly to 67.6%, from 66.7% in the first
quarter of 1997. Georgia Casualty's percentage was up 78.3%, while American
Southern saw its ratio decline to 63.7%. The Life and Health Division's
percentage was 65.2% for the first quarter of 1998, compared to 57.6% in the
first quarter of 1997.
Commission and underwriting expenses increased from $6.0 million in the
first quarter of 1997 to $7.3 million in the first quarter of 1998. The increase
is attributable to the increase in premiums for the quarter coupled with
increased profit commissions on American Southern's business, which occurred as
a result of American Southern's low loss ratio for the quarter, the results of
which are shared with its agents. As a result, American Southern's commission
and underwriting expenses were up $727,000 for the quarter. Georgia Casualty, as
a result of its increased premium volume, experienced an increase in commission
and underwriting expense of $142,000 while the Life and Health Division also saw
a modest increase in commission and underwriting expense for the same reason.
-8-
Interest expense for the quarter declined 23%, principally as a result of a
$7.0 million reduction in debt compared to the first quarter of 1997, compounded
by a 50 basis point reduction in the interest rate of the Company's credit
facility to 8.0%. The reduction in the rate was triggered by the Company meeting
certain financial criteria at year-end 1997, and is subject to further
adjustment, up or down, based on the Company continuing to meet these criteria.
In any event, the rate charged by the credit facility will not exceed 8.5%.
LIQUIDITY AND CAPITAL RESOURCES
The major cash needs of the Company are for the payment of claims and
expenses as they come due and maintaining adequate statutory capital and surplus
to satisfy state regulatory requirements and meeting debt service requirements
of the Parent. The Company's primary source of cash are written premiums and
investment income. Cash payments consist of current claim payments to insureds
and operating expenses such as salaries, employee benefits, commissions, taxes,
and shareholder dividends, when earnings warrant such payment. By statute, the
state regulatory authorities establish minimum liquidity standards primarily to
protect policyholders.
The Company's insurance subsidiaries reported a combined statutory income
of $1.6 million for the first quarter of 1998 compared to statutory net income
of $2.1 million for the first quarter of 1997. The reasons for the decline in
statutory earnings in the first quarter of 1998 are the same as those discussed
in "Results of Operations" above. Statutory results differ from the results of
operations under generally accepted accounting principles ("GAAP") for the
Casualty Division due to the deferral of acquisition costs. The Life and Health
Division's statutory results differ from GAAP primarily due to deferral of
acquisition costs, as well different reserving methods.
The Company is a party to a Credit Agreement with Wachovia Bank of Georgia,
N.A. At March 31, 1998, the Company had outstanding borrowings under this
agreement of approximately $27.6 million, none of which is scheduled to become
due and payable during the last nine months of 1998. The Company repaid $1.0
million of outstanding principal during the first quarter of 1998. The Company
intends to repay its obligations under the Credit Agreement using dividend
payments received from its subsidiaries and receipts from its tax sharing
agreement with its subsidiaries.
The Company has two series of preferred stock outstanding, substantially of
all which is held by affiliates of the Company's chairman and principal
shareholders. The outstanding shares of Series A Convertible Preferred Stock
accrues annual dividends at a rate of $10.50 per share, are convertible into an
approximately 752,000 shares of common stock at a conversion price of $3.99 per
share, and are redeemable at the Company's option at $100 per share, plus unpaid
dividends. The outstanding shares of Series B Preferred Stock ("Series B Stock")
have a stated value of $100 per share, accrue annual dividends at a rate of
$9.00 per share, in certain circumstances may be convertible into an aggregate
of approximately 3,358,000 shares of common stock and are redeemable at the
Company's option. The Series B Stock is not currently convertible. At March 31,
1998, the Company had accrued, but unpaid dividends on the Series B Stock
totaling $2.7 million.
The Company provides certain administrative and other services to each of
its insurance subsidiaries. The amounts charged to and paid by the subsidiaries
in the first quarter of 1998 remained approximately the same as in the first
quarter of 1997. In addition, the Company has a formal tax-sharing agreement
between the Company and its insurance subsidiaries. It is anticipated that this
agreement will provide the Company with additional funds from profitable
subsidiaries due to the subsidiaries' use of the Company's tax loss
carryforwards, which totaled approximately $41.0 million at March 31, 1998.
At March 31, 1998, the Company had a net cumulative deferred tax asset of
zero. The net cumulative deferred tax asset consisted of $24.3 million of
deferred tax assets, offset by $14.6 million of deferred tax liabilities, and a
$9.7 million valuation allowance. Due to the uncertain nature of their ultimate
realization, based upon past performance and expiration dates, the Company has
established a full valuation allowance against these carryforward benefits and
recognizes the benefits only as reassessment demonstrates they are realizable.
The Company's ability to generate taxable income from operations is dependent
upon various factors, many of which are beyond management's control.
Accordingly, there can be no assurance that the Company will generate future
taxable income based on historical performance. Therefore, the realization of
the deferred tax assets will be assessed periodically based on the Company's
current and anticipated results of operations.
Approximately 92.7% of the investment assets of the insurance subsidiaries
are in marketable securities that can be converted into cash, if required;
however, use of such assets by the Company is limited by state insurance
regulations. Dividend payments to the Company by its insurance subsidiaries are
limited to the accumulated statutory earnings of the individual insurance
subsidiaries, subject to annual limitations. At March 31, 1998, Georgia Casualty
had $17.1 million of accumulated statutory earnings, American Southern had $19.3
million of accumulated statutory earnings, and Bankers Fidelity had $19.2
million of accumulated statutory earnings.
-9-
Net cash provided by operating activities was $1.4 million in 1998 compared
to net cash used by operating activities of $883,000 in the first quarter of
1997. Cash and short-term investments increased from $51.0 million at December
31, 1997, to $54.1 million at March 31, 1998, mainly due to positive cash flow
from operations and the sale and maturity of longer term investments. Total
investments (excluding short-term investments) remained unchanged at $152.6
million due in part to increases in unrealized gains on the Company's investment
portfolio.
The Company believes that the dividends, fees, and tax-sharing payments it
receives from its subsidiaries and, if needed, borrowings from banks and
affiliates of the Company will enable the Company to meet its liquidity
requirements for the foreseeable future. Management is not aware of any current
recommendations by regulatory authorities which, if implemented, would have a
material adverse effect on the Company's liquidity, capital resources or
operations.
YEAR 2000
Many existing computer systems currently in use were developed using two
digits rather than four digits to specify the year. As a result, many systems
will recognize a date code of "00" as the calendar year 1900 rather than 2000
which could cause systems to fail or cause erroneous results.
The Company has undertaken projects to ensure that all of its systems will
be compliant with year 2000 issues. Currently, one of the Company's three major
operating systems is fully year 2000 compliant and the process of bringing the
other operating systems into compliance is underway. All operating systems are
expected to be fully compliant by the end of 1998. If the Company fails to bring
its systems into compliance by the year 2000 the Company may, as a result, be
unable to process some business which could potentially have a materially
adverse effect on the financial operations of the Company; however, in the
opinion of management the risk of this occurrence is remote. The cost of
bringing the Company's systems into compliance is not expected to have a
material effect on the results of operations or financial position of the
Company.
FORWARD-LOOKING STATEMENTS
This report contains and references certain information that constitutes
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Those statements, to the extent they are not
historical facts, should be considered forward-looking and subject to various
risks and uncertainties. Such forward-looking statements are made based upon
management's assessments of various risks and uncertainties, as well as
assumptions made in accordance with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. The Company's actual results could
differ materially from the results anticipated in these forward-looking
statements as a result of such risks and uncertainties, including those
identified in the Company's Annual Report on Form 10-K for the fiscal year
ending December 31, 1997 and the other filings made by the Company from time to
time with the Securities and Exchange Commission.
-10-
PART II. OTHER INFORMATION
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
Item 6. Exhibits and Report on Form 8-K.
(a) The following exhibits are filed herewith:
Exhibit 11. Computation of net income per common share.
Exhibit 27. Financial data schedule.
Exhibit 99.1 Press Release April 8, 1998
(b) No reports on Form 8-K were filed with the Securities and Exchange
Commission during the first quarter of 1998.
-11-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ATLANTIC AMERICAN CORPORATION
(Registrant)
Date: May 13, 1998 By: /s/
Edward L. Rand, Jr.
Vice President and Treasurer
(Principal Financial and Accounting Officer)
-12-
EXHIBIT 11
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
COMPUTATIONS OF NET INCOME PER COMMON SHARE
SUPPORTING SCHEDULE
Three Months Ended
March 31,
--------------------
(In thousands, except per share data) 1998 1997
--------------------
Basic Earnings Per Common Share:
Net income $ 1,599 $ 1,938
Less preferred dividends to affiliates (380) (380)
--------------------
Net income available to common shareholders $ 1,219 $ 1,558
====================
Weighted average common shares outstanding 18,909 18,684
====================
Net income per common share $ .06 $ .08
====================
Diluted Earnings Per Common Share:
Net income available to common shareholders $ 1,219 $ 1,558
====================
Weighted average common shares outstanding 18,909 18,684
Effect of dilutive stock options 322 131
--------------------
Weighted average common shares outstanding
adjusted for dilutive stock options 19,231 18,815
====================
Net income per common share $ .06 $ .08
====================
7
1000
3-MOS
DEC-31-1998
MAR-31-1998
0
86630
85514
54866
4115
46
152632
54097
25454
17080
289681
126931
34235
4293
0
27600
0
164
18936
62170
289681
22958
2924
518
112
15522
7278
0
1625
26
0
0
0
0
1599
0.06
0.06
0
0
0
0
0
0
0
