Schedule II CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2011

Schedule II CONDENSED FINANCIAL INFORMATION OF REGISTRANT [Abstract]

Schedule II CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

ATLANTIC AMERICAN CORPORATION

(Parent Company Only)

BALANCE SHEETS

ASSETS

	December 31,
			Restated
	2011		2010
	(In thousands)
Cash and cash equivalents	$	13,765	$	20,077
Investments		12,918		4,958
Investment in subsidiaries		114,214		94,961
Investments in unconsolidated trusts		1,238		1,238
Deferred tax asset, net		-		2,568
Income taxes receivable from subsidiaries		2,452		1,719
Other assets		213		1,514
Total assets	$	144,800	$	127,035
LIABILITIES AND SHAREHOLDERS' EQUITY
Deferred tax liability, net	$	3,976	$	-
Other payables		3,309		3,104
Junior subordinated debentures		41,238		41,238
Total liabilities		48,523		44,342
Shareholders' equity		96,277		82,693
Total liabilities and shareholders' equity	$	144,800	$	127,035

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

ATLANTIC AMERICAN CORPORATION

(Parent Company Only)

STATEMENTS OF OPERATIONS

	Year Ended December 31,
				Restated
	2011			2010
	(In thousands)
REVENUE
Fee income from subsidiaries	$	5,091		$	5,002
Distributed earnings from subsidiaries		6,535			6,493
Other		475			101
Total revenue		12,101			11,596
GENERAL AND ADMINISTRATIVE EXPENSES		9,106			8,116
INTEREST EXPENSE		2,599			2,612
		396			868
INCOME TAX BENEFIT(1)		(2,350	)		(1,121	)
		2,746			1,989
EQUITY IN UNDISTRIBUTED EARNINGS (LOSSES) OF SUBSIDIARIES, NET		544			(999	)
NET INCOME	$	3,290		$	990

(1) Under the terms of its tax-sharing agreement with its subsidiaries, income tax provisions for the individual companies are computed on a separate company basis. Accordingly, the Company's income tax benefit results from the utilization of the parent company separate return loss to reduce the consolidated taxable income of the Company.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

ATLANTIC AMERICAN CORPORATION

(Parent Company Only)

STATEMENTS OF CASH FLOWS

	Year Ended December 31,
				Restated
	2011			2010
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,290		$	990
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment losses		84			377
Depreciation and amortization		75			98
Equity in undistributed (earnings) losses of consolidated subsidiaries		(544	)		999
Increase in intercompany taxes		(411	)		(125	)
Deferred income tax (benefit) expense		(374	)		228
Increase (decrease) in other liabilities		375			(118	)
Other, net		(72	)		34
Net cash provided by operating activities		2,423			2,483
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investments sold, called or matured		1,813			4,270
Investments purchased		(8,214	)		(1,945	)
Capital contribution to subsidiaries		(250	)		-
Additions to property and equipment		(38	)		(50	)
Net cash (used in) provided by investing activities		(6,689	)		2,275
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends on common stock		(445	)		-
Payment of dividends on Series D Preferred Stock		-			(508	)
Proceeds from the exercise of stock options		222			-
Purchase of treasury shares		(1,823	)		(60	)
Net cash used in financing activities		(2,046	)		(568	)
Net (decrease) increase in cash		(6,312	)		4,190
Cash and cash equivalents at beginning of year		20,077			15,887
Cash and cash equivalents at end of year	$	13,765		$	20,077
Supplemental disclosure:
Cash paid for interest	$	2,592		$	2,615
Cash received for income taxes	$	-		$	650
Intercompany tax settlement from subsidiaries	$	1,565		$	1,224