Schedule II CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2012

Schedule II CONDENSED FINANCIAL INFORMATION OF REGISTRANT [Abstract]

Schedule II CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Schedule II

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

ATLANTIC AMERICAN CORPORATION

(Parent Company Only)

BALANCE SHEETS

ASSETS

	December 31,
	2012			2011
	(In thousands)
Cash and cash equivalents		$	13,306		$	13,765
Investments			14,122			12,918
Investment in subsidiaries			124,904			114,214
Investments in unconsolidated trusts			1,238			1,238
Income taxes receivable from subsidiaries			1,989			2,452
Other assets			559			213
Total assets		$	156,118		$	144,800
LIABILITIES AND SHAREHOLDERS' EQUITY
Deferred tax liability, net		$	7,824		$	3,976
Other payables			1,320			3,309
Junior subordinated debentures			41,238			41,238
Total liabilities			50,382			48,523
Shareholders' equity			105,736			96,277
Total liabilities and shareholders' equity		$	156,118		$	144,800

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

ATLANTIC AMERICAN CORPORATION

(Parent Company Only)

STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2012			2011
	(In thousands)
REVENUE
Fee income from subsidiaries	$	5,605		$	5,091
Distributed earnings from subsidiaries		7,350			6,535
Other		844			475
Total revenue		13,799			12,101
GENERAL AND ADMINISTRATIVE EXPENSES		9,659			9,106
INTEREST EXPENSE		2,632			2,599
		1,508			396
INCOME TAX BENEFIT(1)		(1,766	)		(2,350	)
		3,274			2,746
EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES, NET		1,162			544
NET INCOME	$	4,436		$	3,290

(1) Under the terms of a tax-sharing agreement, income tax provisions for the subsidiary 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,
	2012			2011
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	4,436		$	3,290
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment losses		-			84
Depreciation and amortization		75			75
Equity in undistributed earnings of consolidated subsidiaries		(1,162	)		(544	)
Decrease (increase) in intercompany taxes		463			(411	)
Deferred income tax benefit		(97	)		(374	)
(Decrease) increase in other liabilities		(746	)		375
Other, net		(251	)		(72	)
Net cash provided by operating activities		2,718			2,423
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investments sold, called or matured		-			1,813
Investments purchased		-			(8,214	)
Capital contribution to subsidiaries		(200	)		(250	)
Additions to property and equipment		(166	)		(38	)
Net cash used in investing activities		(366	)		(6,689	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends on common stock		(1,486	)		(445	)
Payment of dividends on Series D Preferred Stock		(1,015	)		-
Proceeds from shares issued under stock plans		297			222
Purchase of shares for treasury		(607	)		(1,823	)
Net cash used in financing activities		(2,811	)		(2,046	)
Net decrease in cash		(459	)		(6,312	)
Cash and cash equivalents at beginning of year		13,765			20,077
Cash and cash equivalents at end of year	$	13,306		$	13,765
Supplemental disclosure:
Cash paid for interest	$	2,636		$	2,592
Cash paid for income taxes	$	405		$	-
Intercompany tax settlement from subsidiaries	$	2,132		$	1,565