10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

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

(Exact name of registrant as specified in its charter)

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)

(404) 266-5500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the 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  ☑   No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  ☑   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐   Accelerated filer  ☐   Non-accelerated filer  ☐  (Do not check if a smaller reporting company)  Smaller reporting company  ☑   Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐   No  ☑

The total number of shares of the registrant’s Common Stock, $1 par value, outstanding on July 26, 2019 was 20,160,859.

ATLANTIC AMERICAN CORPORATION

TABLE OF CONTENTS

Part I.	Financial Information
Item 1.	Financial Statements:	2
	Condensed Consolidated Balance Sheets At June 30, 2019 And December 31, 2018	2
	Condensed Consolidated Statements Of Operations for the three months and six months ended June 30, 2019 and 2018	3
	Condensed Consolidated Statements Of Comprehensive Income (Loss) for the three months and six months ended June 30, 2019 and 2018	4
	Condensed Consolidated Statements Of Shareholders’ Equity for the three months and six months ended June 30, 2019 and 2018	5
	Condensed Consolidated Statements Of Cash Flows for the six months ended June 30, 2019 and 2018	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 4.	Controls and Procedures	29
Part II.	Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 6.	Exhibits	30
Signatures		31

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ATLANTIC AMERICAN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

ASSETS

	Unaudited June 30, 2019			December 31, 2018
Cash and cash equivalents	$	11,450		$	12,630
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost: $217,291 and $219,924)		223,275			210,386
Equity securities, at fair value (cost: $9,060 and $10,515)		20,455			20,758
Other invested assets (cost: $7,005 and $6,905)		7,380			7,424
Policy loans		2,007			2,085
Real estate		38			38
Investment in unconsolidated trusts		1,238			1,238
Total investments		254,393			241,929
Receivables:
Reinsurance		30,253			26,110
Insurance premiums and other (net of allowance for doubtful accounts: $187 and $207)		23,891			15,223
Deferred income taxes, net		1,537			4,184
Deferred acquisition costs		38,144			37,094
Other assets		9,518			4,560
Intangibles		2,544			2,544
Total assets	$	371,730		$	344,274
LIABILITIES AND SHAREHOLDERS’ EQUITY
Insurance reserves and policyholder funds:
Future policy benefits	$	92,108		$	90,257
Unearned premiums		33,947			24,206
Losses and claims		75,155			72,612
Other policy liabilities		1,331			1,973
Total insurance reserves and policyholder funds		202,541			189,048
Other liabilities		22,681			20,116
Junior subordinated debenture obligations, net		33,738			33,738
Total liabilities		258,960			242,902
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: 20,160,859 and 20,170,360		22,401			22,401
Additional paid-in capital		57,444			57,414
Retained earnings		36,342			37,208
Accumulated other comprehensive income (loss)		4,727			(7,535	)
Unearned stock grant compensation		(150	)		(186	)
Treasury stock, at cost: 2,240,035 and 2,230,534 shares		(8,049	)		(7,985	)
Total shareholders’ equity		112,770			101,372
Total liabilities and shareholders’ equity	$	371,730		$	344,274

The accompanying notes are an integral part of these condensed consolidated financial statements.

-2-

ATLANTIC AMERICAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; Dollars in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenue:
Insurance premiums, net	$	45,469		$	42,845		$	90,251		$	85,047
Net investment income		2,313			2,537			4,647			4,896
Realized investment gains (losses), net		610			(57	)		1,995			313
Unrealized gains (losses) on equity securities, net		(5,337	)		4,089			1,152			(330	)
Other income		72			29			100			57
Total revenue		43,127			49,443			98,145			89,983
Benefits and expenses:
Insurance benefits and losses incurred		34,151			32,219			69,458			65,391
Commissions and underwriting expenses		11,509			9,715			22,524			19,734
Interest expense		545			506			1,091			968
Other expense		2,511			2,970			5,376			6,208
Total benefits and expenses		48,716			45,410			98,449			92,301
Income (loss) before income taxes		(5,589	)		4,033			(304	)		(2,318	)
Income tax expense (benefit)		(1,163	)		848			(40	)		(479	)
Net income (loss)		(4,426	)		3,185			(264	)		(1,839	)
Preferred stock dividends		(100	)		(100	)		(199	)		(199	)
Net income (loss) applicable to common shareholders	$	(4,526	)	$	3,085		$	(463	)	$	(2,038	)
Earnings (loss) per common share (basic)	$	(.22	)	$	.15		$	(.02	)	$	(.10	)
Earnings (loss) per common share (diluted)	$	(.22	)	$	.15		$	(.02	)	$	(.10	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

-3-

ATLANTIC AMERICAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited; Dollars in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net income (loss)	$	(4,426	)	$	3,185		$	(264	)	$	(1,839	)
Other comprehensive income (loss):
Available-for-sale fixed maturity securities:
Gross unrealized holding gain (loss) arising in the period		7,964			(3,616	)		16,404			(10,390	)
Related income tax effect		(1,673	)		760			(3,445	)		2,182
Subtotal		6,291			(2,856	)		12,959			(8,208	)
Less: reclassification adjustment for net realized (gains) losses included in net income (loss)		(610	)		57			(882	)		(313	)
Related income tax effect		128			(12	)		185			66
Subtotal		(482	)		45			(697	)		(247	)
Total other comprehensive income (loss), net of tax		5,809			(2,811	)		12,262			(8,455	)
Total comprehensive income (loss)	$	1,383		$	374		$	11,998		$	(10,294	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

-4-

ATLANTIC AMERICAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited; Dollars in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Preferred stock:
Balance, beginning of period	$	55		$	55		$	55		$	55
Repurchases of preferred stock		-			-			-			-
Net issuance of preferred stock		-			-			-			-
Balance, end of period		55			55			55			55
Common stock:
Balance, beginning of period		22,401			22,401			22,401			22,401
Repurchases of common stock		-			-			-			-
Net issuance of common stock		-			-			-			-
Balance, end of period		22,401			22,401			22,401			22,401
Additional paid-in capital:
Balance, beginning of period		57,417			57,431			57,414			57,495
Restricted stock grants, net of forfeitures		24			(20	)		24			(88	)
Issuance of shares under stock plans		3			5			6			9
Balance, end of period		57,444			57,416			57,444			57,416
Retained earnings:
Balance, beginning of period		40,868			33,188			37,208			30,993
Cumulative effect of adoption of  updated accounting guidance for  equity financial instruments at January 1, 2018		-			-			-			9,825
Reclassification of certain tax effects  from accumulated other  comprehensive income at  January 1, 2018		-			-			-			(2,100	)
Net income (loss)		(4,426	)		3,185			(264	)		(1,839	)
Dividends on common stock		-			-			(403	)		(407	)
Dividends accrued on preferred stock		(100	)		(100	)		(199	)		(199	)
Balance, end of period		36,342			36,273			36,342			36,273
Accumulated other comprehensive income (loss):
Balance, beginning of period		(1,082	)		(3,618	)		(7,535	)		9,751
Cumulative effect of adoption of  updated accounting guidance for  equity financial instruments at January 1, 2018		-			-			-			(9,825	)
Reclassification of certain tax effects  from accumulated other  comprehensive income at  January 1, 2018		-			-			-			2,100
Other comprehensive income (loss), net of tax		5,809			(2,811	)		12,262			(8,455	)
Balance, end of period		4,727			(6,429	)		4,727			(6,429	)
Unearned Stock Grant Compensation:
Balance, beginning of period		(128	)		(387	)		(186	)		(579	)
Restricted stock grants, net of forfeitures		(71	)		20			(71	)		135
Amortization of unearned compensation		49			45			107			122
Balance, end of period		(150	)		(322	)		(150	)		(322	)
Treasury Stock:
Balance, beginning of period		(8,044	)		(7,346	)		(7,985	)		(7,133	)
Restricted stock grants, net of forfeitures		47			-			47			(47	)
Purchase of shares for treasury		(22	)		(281	)		(71	)		(360	)
Net shares acquired related to employee share-based compensation plans		(35	)		(107	)		(49	)		(197	)
Issuance of shares under stock plans		5			7			9			10
Balance, end of period		(8,049	)		(7,727	)		(8,049	)		(7,727	)
Total shareholders’ equity	$	112,770		$	101,667		$	112,770		$	101,667
Dividends declared on common stock per share	$	-		$	-		$	(.02	)	$	(.02	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

-5-

ATLANTIC AMERICAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; Dollars in thousands)

	Six Months Ended June 30,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(264	)	$	(1,839	)
Adjustments to reconcile loss to net cash used in operating activities:
Acquisition costs deferred, net		(1,050	)		(1,499	)
Realized investment gains, net		(1,995	)		(313	)
Unrealized (gains) losses on equity securities, net		(1,152	)		330
Distributions received from equity method investees		106			202
Compensation expense related to share awards		107			122
Depreciation and amortization		337			532
Deferred income tax benefit		(612	)		(1,218	)
Increase in receivables, net		(13,393	)		(12,691	)
Increase in insurance reserves and policyholder funds		13,493			17,837
Increase (decrease) in other liabilities		2,366			(7,712	)
Other, net		(5,162	)		(147	)
Net cash used in operating activities		(7,219	)		(6,396	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investments sold		70,171			25,849
Proceeds from investments matured, called or redeemed		3,628			3,985
Investments purchased		(67,220	)		(39,329	)
Additions to property and equipment		(32	)		(224	)
Net cash provided by (used in) investing activities		6,547			(9,719	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends on common stock		(403	)		(407	)
Proceeds from shares issued under stock plans		15			19
Treasury stock acquired — share repurchase authorization		(71	)		(360	)
Treasury stock acquired — net employee share-based compensation		(49	)		(197	)
Net cash used in financing activities		(508	)		(945	)
Net decrease in cash and cash equivalents		(1,180	)		(17,060	)
Cash and cash equivalents at beginning of period		12,630			24,547
Cash and cash equivalents at end of period	$	11,450		$	7,487
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	1,100		$	941
Cash paid for income taxes	$	850		$	1,412

The accompanying notes are an integral part of these condensed consolidated financial statements.

-6-

ATLANTIC AMERICAN CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; Dollars in thousands, except per share amounts)

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Atlantic American Corporation (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”). The Parent’s primary operating subsidiaries, American Southern Insurance Company and American Safety Insurance Company (together known as “American Southern”) and Bankers Fidelity Life Insurance Company and Bankers Fidelity Assurance Company (together known as “Bankers Fidelity”), operate in two principal business units. American Southern operates in the property and casualty insurance market, while Bankers Fidelity operates in the life and health insurance market. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The unaudited condensed consolidated financial statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Annual Report”). The Company’s financial condition and results of operations and cash flows as of and for the three month and six month periods ended June 30, 2019 are not necessarily indicative of the financial condition or results of operations and cash flows that may be expected for the year ending December 31, 2019 or for any other future period.

The Company’s significant accounting policies have not changed materially from those set out in the 2018 Annual Report, except as noted below for the adoption of new accounting standards.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Note 2. Recently Issued Accounting Standards

Adoption of New Accounting Standards

Leases. On January 1, 2019, the Company adopted the requirements of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The objective of this ASU, along with several related ASUs issued subsequently, is to increase transparency and comparability between organizations that enter into lease agreements. For lessees, the key difference of the new standard from the previous guidance (Topic 840) is the recognition of a right-of-use (“ROU”) asset and lease liability on the balance sheet. The most significant change is the requirement to recognize ROU assets and lease liabilities for leases classified as operating leases. The new standard requires disclosures to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

As part of the transition to the new standard, the Company was required to measure and recognize leases that existed at January 1, 2019 and elected to use a modified retrospective approach. For leases that existed at the effective date, the Company elected the package of three transition practical expedients and therefore did not reassess any of the following: (i) whether an arrangement is or contains a lease, (ii) lease classification, or (iii) what qualifies as an initial direct cost.

The adoption of this ASU resulted in the Company recognizing a ROU asset of $6,088 as part of other assets and a lease liability of $6,088 as part of other liabilities in the consolidated balance sheet. The adoption of this ASU did not have a material effect on the Company’s results of operations or liquidity.

Revenue from Contracts with Customers. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09, as modified, provides guidance for recognizing revenue which excludes insurance contracts and financial instruments. Revenue is to be recognized when, or as, goods or services are transferred to customers in an amount that reflects the consideration that an entity is expected to be entitled in exchange for those goods or services. For the six months ended June 30, 2019 and 2018, approximately $100 and $57, respectively, or approximately one-tenth of 1% of the Company’s total revenues, were within the scope of this updated guidance. The Company adopted ASU 2014-09 as of January 1, 2018. The adoption of this ASU did not have an impact on the Company’s consolidated financial statements.

-7-

Future Adoption of New Accounting Standards

For information regarding accounting standards that the Company has not yet adopted, see the “Recently Issued Accounting Standards - Future Adoption of New Accounting Standards” section of Note 1 of Notes to Consolidated Financial Statements in the 2018 Annual Report.

Note 3. Investments

The following tables set forth the estimated fair value, gross unrealized gains, gross unrealized losses and cost or amortized cost of the Company’s investments in fixed maturities and equity securities, aggregated by type and industry, as of June 30, 2019 and December 31, 2018.

Fixed maturities were comprised of the following:

	June 30, 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	$	27,929	$	560	$	329	$	27,698
Obligations of states and political subdivisions		4,999		420		-		4,579
Corporate securities:
Utilities and telecom		17,482		1,654		-		15,828
Financial services		61,103		2,506		474		59,071
Other business – diversified		43,516		1,667		658		42,507
Other consumer – diversified		68,054		1,889		1,251		67,416
Total corporate securities		190,155		7,716		2,383		184,822
Redeemable preferred stocks:
Other consumer – diversified		192		—		—		192
Total redeemable preferred stocks		192		—		—		192
Total fixed maturities	$	223,275	$	8,696	$	2,712	$	217,291

-8-

	December 31, 2018
	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	$	27,422	$	36	$	1,061	$	28,447
Obligations of states and political subdivisions		8,364		347		72		8,089
Corporate securities:
Utilities and telecom		19,642		873		431		19,200
Financial services		49,477		747		2,942		51,672
Other business – diversified		49,196		226		2,844		51,814
Other consumer – diversified		56,093		84		4,501		60,510
Total corporate securities		174,408		1,930		10,718		183,196
Redeemable preferred stocks:
Other consumer – diversified		192		—		—		192
Total redeemable preferred stocks		192		—		—		192
Total fixed maturities	$	210,386	$	2,313	$	11,851	$	219,924

-9-

Bonds having an amortized cost of $10,444 and $10,452 and included in the tables above were on deposit with insurance regulatory authorities as of June 30, 2019 and December 31, 2018, respectively, in accordance with statutory requirements.

Equity securities were comprised of the following:

	June 30, 2019
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost or Amortized Cost
Equity securities:
Common and non-redeemable preferred stocks:
Financial services	$	4,799	$	419	$	—	$	4,380
Other business – diversified		318		271		—		47
Other consumer – diversified		15,338		10,705		—		4,633
Total equity securities	$	20,455	$	11,395	$	—	$	9,060

	December 31, 2018
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost or Amortized Cost
Equity securities:
Common and non-redeemable preferred stocks:
Utilities and telecom	$	1,686	$	722	$	—	$	964
Financial services		4,552		172		—		4,380
Other business – diversified		306		259		—		47
Other consumer – diversified		14,214		9,090		—		5,124
Total equity securities	$	20,758	$	10,243	$	—	$	10,515

The carrying value and amortized cost of the Company’s investments in fixed maturities at June 30, 2019 and December 31, 2018 by contractual maturity were as follows. Actual maturities may differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.

	June 30, 2019				December 31, 2018
	Carrying Value		Amortized Cost		Carrying Value		Amortized Cost
Due in one year or less	$	-	$	-	$	3,150	$	3,150
Due after one year through five years		16,262		16,345		19,787		19,699
Due after five years through ten years		93,243		91,052		127,617		133,863
Due after ten years		97,444		93,488		43,823		46,338
Asset backed securities		16,326		16,406		16,009		16,874
Totals	$	223,275	$	217,291	$	210,386	$	219,924

-10-

The following tables present the Company’s unrealized losses for securities by type and length of time the security was in a continuous unrealized loss position as of June 30, 2019 and December 31, 2018.

	June 30, 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		$	—		$	—		$	10,865		$	329		$	10,865		$	329
Corporate securities			2,051			5			32,070			2,378			34,121			2,383
Total temporarily impaired securities		$	2,051		$	5		$	42,935		$	2,707		$	44,986		$	2,712

	December 31, 2018
	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		$	—		$	—		$	24,786		$	1,061		$	24,786		$	1,061
Obligations of states and political subdivisions			—			—			3,980			72			3,980			72
Corporate securities			49,633			1,592			97,012			9,126			146,645			10,718
Total temporarily impaired securities		$	49,633		$	1,592		$	125,778		$	10,259		$	175,411		$	11,851

The evaluation for an other than temporary impairment (“OTTI”) is a quantitative and qualitative process, which is subject to risks and uncertainties in the determination of whether declines in the fair value of investments are other than temporary. Potential risks and uncertainties include, among other things, changes in general economic conditions, an issuer’s financial condition or near term recovery prospects and the effects of changes in interest rates. In evaluating a potential impairment, the Company considers, among other factors, management’s intent and ability to hold the securities until price recovery, the nature of the investment and the expectation of prospects for the issuer and its industry, the status of an issuer’s continued satisfaction of its obligations in accordance with their contractual terms, and management’s expectation as to the issuer’s ability and intent to continue to do so, as well as ratings actions that may affect the issuer’s credit status.

There were no OTTI charges recorded during the three month and six month periods ended June 30, 2019 and 2018.

As of June 30, 2019 and December 31, 2018, there were thirty-three and one hundred forty securities, respectively, in an unrealized loss position which primarily included certain of the Company’s investments in fixed maturities within the financial services, other diversified business and other diversified consumer sectors. The decrease in the number and value of securities in an unrealized loss position during the six month period ended June 30, 2019 was primarily attributable to the appreciation of fixed maturity market prices due to the current interest rate environment. The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position. Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, including those described above, the Company has deemed these securities to be temporarily impaired as of June 30, 2019.

-11-

The following table is a summary of realized investment gains (losses) for the three month and six month periods ended June 30, 2019 and 2018.

	Three Months Ended June 30, 2019
	Fixed Maturities			Equity Securities			Other Invested Assets			Total
Gains		$	610		$	—		$	—		$	610
Losses			—			—			—			—
Realized investment gains (losses), net		$	610		$	—		$	—		$	610

	Three Months Ended June 30, 2018
	Fixed Maturities				Equity Securities			Other Invested Assets			Total
Gains		$	247			$	—		$	—		$	247
Losses			(304	)			—			—			(304	)
Realized investment gains (losses), net		$	(57	)		$	—		$	—		$	(57	)

	Six Months Ended June 30, 2019
	Fixed Maturities			Equity Securities			Other Invested Assets			Total
Gains		$	882		$	1,113		$	—		$	1,995
Losses			—			—			—			—
Realized investment gains (losses), net		$	882		$	1,113		$	—		$	1,995

-12-

	Six Months Ended June 30, 2018
	Fixed Maturities				Equity Securities			Other Invested Assets			Total
Gains		$	617			$	—		$	—		$	617
Losses			(304	)			—			—			(304	)
Realized investment gains (losses), net		$	313			$	—		$	—		$	313

The following table presents the portion of unrealized gains (losses) related to equity securities still held for the three month and six month periods ended June 30, 2019 and 2018.

	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019		2018
Net gains (losses) recognized during the period on equity securities	$	(5,337	)	$	4,089	$	2,265	$	(330	)
Less: Net 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 still held at the reporting date	$	(5,337	)	$	4,089	$	1,152	$	(330	)

Variable Interest Entities

The Company holds passive interests in a number of entities that are considered to be variable interest entities (“VIEs”) under GAAP guidance. The Company’s VIE interests principally consist of interests in limited partnerships and limited liability companies formed for the purpose of achieving diversified equity returns. The Company’s VIE interests, carried as a part of other invested assets, totaled $7,380 and $7,424 as of June 30, 2019 and December 31, 2018, respectively. The Company’s VIE interests, carried as a part of investment in unconsolidated trusts, totaled $1,238 as of June 30, 2019 and December 31, 2018.

The Company does not have power over the activities that most significantly impact the economic performance of these VIEs and thus is not the primary beneficiary. Therefore, the Company has not consolidated these VIEs. The Company’s involvement with each VIE is limited to its direct ownership interest in the VIE. The Company has no arrangements with any of the VIEs to provide other financial support to or on behalf of the VIE. The Company’s maximum loss exposure relative to these investments was limited to the carrying value of the Company’s investment in the VIEs, which amount to $8,618 and $8,662, as of June 30, 2019 and December 31, 2018, respectively. As of June 30, 2019 and December 31, 2018, the Company has outstanding commitments totaling $4,900 and $0, respectively, whereby the Company is committed to fund these investments and may be called by such VIEs during the commitment period to fund the purchase of new investments and partnership expenses.

Note 4. Fair Values of Financial Instruments

The estimated fair values have been determined by the Company using available market information from various market sources and appropriate valuation methodologies as of the respective dates. However, considerable judgment is necessary to interpret market data and to develop the estimates of fair value. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, the estimates presented herein are not necessarily indicative of the amounts which the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The following describes the fair value hierarchy and provides information as to the extent to which the Company uses fair value to measure the value of its financial instruments and information about the inputs used to value those financial instruments. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three broad levels.

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, U.S. Treasury securities and exchange traded common stocks.

-13-

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. 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 a matrix pricing concept, which is a mathematical technique used widely in the industry to value debt securities based on various relationships to other benchmark quoted prices.

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. The Company’s financial instruments valued using Level 3 criteria consist of a limited number of fixed maturities. As of June 30, 2019 and December 31, 2018, the value of the Company’s fixed maturities valued using Level 3 criteria was $1,174 and $1,066, respectively. The use of different criteria or assumptions regarding data may have yielded materially different valuations.

As of June 30, 2019, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	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	$	11,603	$	210,498		$	1,174	(1)	$	223,275
Equity securities		15,855		4,600	(1)		—			20,455
Cash equivalents		6,925		—			—			6,925
Total	$	34,383	$	215,098		$	1,174		$	250,655

⁽¹⁾ All underlying securities are financial services industry related.

As of December 31, 2018, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	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	$	11,413	$	197,907		$	1,066	(1)	$	210,386
Equity securities		16,398		4,360	(1)		—			20,758
Cash equivalents		8,250		—			—			8,250
Total	$	36,061	$	202,267		$	1,066		$	239,394

⁽¹⁾ All underlying securities are financial services industry related.

The following tables provide a roll-forward of the Company’s financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three month and six month periods ended June 30, 2019 and 2018.

	Fixed Maturities
Balance, December 31, 2018	$	1,066
Total unrealized gains included in other comprehensive loss		49
Balance, March 31, 2019		1,115
Total unrealized gains included in other comprehensive income		59
Balance, June 30, 2019	$	1,174

-14-

	Fixed Maturities
Balance, December 31, 2017	$	1,369
Total unrealized losses included in other comprehensive loss		(30	)
Balance, March 31, 2018		1,339
Total unrealized gains included in other comprehensive loss		7
Balance, June 30, 2018	$	1,346

The Company’s fixed maturities valued using Level 3 inputs consist solely of issuances of pooled debt obligations of multiple, smaller financial services companies that are not actively traded. There are no assumed prepayments and/or default probability assumptions as a majority of these instruments contain certain U.S. government agency strips to support repayment of the principal. Other qualitative and quantitative information received from the original underwriter of the pooled offerings is also considered, as applicable.

The following table sets forth the carrying amount, estimated fair value and level within the fair value hierarchy of the Company’s financial instruments as of June 30, 2019 and December 31, 2018.

			June 30, 2019				December 31, 2018
	Level in Fair Value Hierarchy (1)		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Cash and cash equivalents	Level 1		$	11,450	$	11,450	$	12,630	$	12,630
Fixed maturities	(1	)		223,275		223,275		210,386		210,386
Equity securities	(1	)		20,455		20,455		20,758		20,758
Other invested assets	Level 3			7,380		7,380		7,424		7,424
Policy loans	Level 2			2,007		2,007		2,085		2,085
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		33,738		33,738		33,738

⁽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.

There have not been any transfers between Level 1, Level 2 and Level 3 during the periods presented in these condensed consolidated financial statements.

-15-

Note 5. Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses

The roll-forward of liabilities for unpaid losses, claims and loss adjustment expenses is as follows:

	Six Months Ended June 30,
	2019			2018
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	72,612		$	65,689
Less: Reinsurance recoverable on unpaid losses		(14,354	)		(11,968	)
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net		58,258			53,721
Incurred related to:
Current accident year		68,157			63,230
Prior accident year development		103			(163	)
Total incurred		68,260			63,067
Paid related to:
Current accident year		38,875			36,508
Prior accident years		28,576			22,872
Total paid		67,451			59,380
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net		59,067			57,408
Plus: Reinsurance recoverable on unpaid losses		16,088			14,667
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	75,155		$	72,075

Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred:

	Six Months Ended June 30,
	2019		2018
Total incurred losses	$	68,260	$	63,067
Cash surrender value and matured endowments		588		707
Benefit reserve changes		610		1,617
Total insurance benefits and losses incurred	$	69,458	$	65,391

-16-

Note 6. Junior Subordinated Debentures

The Company has two unconsolidated Connecticut statutory business trusts, which exist for the exclusive purposes of: (i) issuing trust preferred securities (“Trust Preferred Securities”) representing undivided beneficial interests in the assets of the trusts; (ii) investing the gross proceeds of the Trust Preferred Securities in junior subordinated deferrable interest debentures (“Junior Subordinated Debentures”) of Atlantic American; and (iii) engaging in those activities necessary or incidental thereto.

The financial structure of each of Atlantic American Statutory Trust I and II as of June 30, 2019 was as follows:

	Atlantic American Statutory Trust I			Atlantic American Statutory Trust II
JUNIOR SUBORDINATED DEBENTURES (1) (2)
Principal amount owed June 30, 2019	$	18,042		$	23,196
Less: Treasury debt (3)		—			(7,500	)
Net balance June 30, 2019	$	18,042		$	15,696
Net balance December 31, 2018	$	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.

-17-

Note 7. Earnings (Loss) Per Common Share

A reconciliation of the numerator and denominator used in the loss per common share calculations is as follows:

	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	)

	Three Months Ended June 30, 2018
	Income			Weighted Average Shares (In thousands)		Per Share Amount
Basic Earnings Per Common Share:
Net income	$	3,185			20,286
Less preferred stock dividends		(100	)
Net income applicable to common shareholders		3,085			20,286	$	.15
Diluted Earnings Per Common Share:
Effect of Series D preferred stock		100			1,378
Net income applicable to common shareholders	$	3,185			21,664	$	.15

	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	)

-18-

	Six Months Ended June 30, 2018
	Loss			Weighted Average Shares (In thousands)		Per Share Amount
Basic and Diluted Loss Per Common Share:
Net loss	$	(1,839	)		20,352
Less preferred stock dividends		(199	)		—
Net loss applicable to common shareholders	$	(2,038	)		20,352	$	(.10	)

The assumed conversion of the Company’s Series D preferred stock was excluded from the earnings (loss) per common share calculation for all periods presented, except for the three month period ended June 30, 2018, since its impact would have been antidilutive.

Note 8. Income Taxes

A reconciliation of the differences between income taxes computed at the federal statutory income tax rate and income tax benefit is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Federal income tax provision at statutory rate of 21%	$	(1,174	)	$	847		$	(64	)	$	(487	)
Dividends-received deduction		(5	)		(10	)		(14	)		(20	)
Other permanent differences		16			11			38			28
Income tax expense (benefit)	$	(1,163	)	$	848		$	(40	)	$	(479	)

The components of income tax benefit were:

	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019			2018
Current - Federal	$	572		$	703	$	572		$	739
Deferred - Federal		(1,735	)		145		(612	)		(1,218	)
Total	$	(1,163	)	$	848	$	(40	)	$	(479	)

Note 9. Leases

The Company has identified two operating lease agreements, each for the use of office space in the ordinary course of business.

The first lease renews annually on an automatic basis and based on original assumptions, management is reasonably certain to exercise the renewal option for an additional eight years from the January 1, 2019 effective date of the new lease guidance. The original term of the second lease was ten years and amended in January 2017 to provide for an additional seven years, with a termination date on September 30, 2026. The rate used in determining the present value of lease payments is based upon an estimate of the Company’s incremental secured borrowing rate commensurate with the term of the underlying lease.

-19-

These leases are accounted for as operating leases, whereby lease expense is recognized on a straight-line basis over the term of the lease. Lease expense reported for the six months ended June 30, 2019 was $507. See the “Adoption of New Accounting Standards – Leases” section of Note 2 of Notes to Condensed Consolidated Financial Statements for additional information regarding the accounting for leases.

Additional information regarding the Company’s real estate operating leases is as follows:

	Six Months Ended June 30,
	2019
Other information on operating leases:
Cash payments included in the measurement of lease liabilities reported in operating cash flows	$	450
Right-of-use assets included in other assets on the condensed consolidated balance sheet		5,785
Weighted average discount rate		6.8	%
Weighted average remaining lease term in years	7.4 years

The following table presents maturities and present value of the Company’s lease liabilities:

	Lease Liability
Remainder of 2019	$	365
2020		978
2021		1,015
2022		1,031
2023		1,048
Thereafter		3,091
Total undiscounted lease payments		7,528
Less: present value adjustment		1,685
Operating lease liability included in other liabilities on the condensed consolidated balance sheet	$	5,843

As of June 30, 2019, the Company has no operating leases that have not yet commenced.

Note 10. Commitments and Contingencies

From time to time, the Company is, and expects to continue to be, involved in various claims and lawsuits incidental to and in the ordinary course of its businesses. In the opinion of management, any such known claims are not expected to have a material effect on the financial condition or results of operations of the Company.

-20-

Note 11. Segment Information

The Parent’s primary insurance subsidiaries, American Southern and Bankers Fidelity, operate in two principal business units, each focusing on specific products. American Southern operates in the property and casualty insurance market, while Bankers Fidelity operates in the life and health insurance market. Each business unit is managed independently and is evaluated on its individual performance. The following sets forth the assets, revenue and income (loss) before income taxes for each business unit as of and for the periods ended 2019 and 2018.

Assets	June 30, 2019			December 31, 2018
American Southern	$	142,059		$	122,724
Bankers Fidelity		206,513			195,663
Corporate and Other		148,424			134,643
Adjustments & Eliminations		(125,266	)		(108,756	)
Total assets	$	371,730		$	344,274

Revenues	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
American Southern	$	15,740		$	14,643		$	30,975		$	28,176
Bankers Fidelity		31,244			31,641			65,620			61,754
Corporate and Other		(1,261	)		5,939			6,617			5,419
Adjustments & Eliminations		(2,596	)		(2,780	)		(5,067	)		(5,366	)
Total revenue	$	43,127		$	49,443		$	98,145		$	89,983

Income (Loss) Before Income Taxes	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019			2018
American Southern	$	1,396		$	1,929	$	3,378		$	2,897
Bankers Fidelity		(1,998	)		261		(2,494	)		(2,274	)
Corporate and Other		(4,987	)		1,843		(1,188	)		(2,941	)
Income (loss) before income taxes	$	(5,589	)	$	4,033	$	(304	)	$	(2,318	)

Note 12. Related Party Transactions

During the three month period ended June 30, 2019, the Company transferred its remaining fractional interest in an aircraft arrangement to Gray Television, Inc., a related party, for $151.

-21-

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis of the financial condition and results of operations of Atlantic American Corporation (“Atlantic American” or the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”) as of and for the three month and six month periods ended June 30, 2019. This discussion should be read in conjunction with the unaudited consolidated financial statements and notes thereto included elsewhere herein, as well as with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Annual Report”).

Atlantic American is an insurance holding company whose operations are conducted primarily through its insurance subsidiaries: American Southern Insurance Company and American Safety Insurance Company (together known as “American Southern”) and Bankers Fidelity Life Insurance Company and Bankers Fidelity Assurance Company (together known as “Bankers Fidelity”). Each operating company is managed separately, offers different products and is evaluated on its individual performance.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ significantly from those estimates. The Company has identified certain estimates that involve a higher degree of judgment and are subject to a significant degree of variability. The Company’s critical accounting policies and the resultant estimates considered most significant by management are disclosed in the 2018 Annual Report. Except as disclosed in Note 2 of Notes to Condensed Consolidated Financial Statements, the Company’s critical accounting policies are consistent with those disclosed in the 2018 Annual Report.

Overall Corporate Results

The following presents the Company’s revenue, expenses and net income (loss) for the three month and six month periods ended June 30, 2019 and the comparable period in 2018:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(In thousands)
Insurance premiums, net	$	45,469		$	42,845		$	90,251		$	85,047
Net investment income		2,313			2,537			4,647			4,896
Realized investment gains (losses), net		610			(57	)		1,995			313
Unrealized gains (losses) on equity securities, net		(5,337	)		4,089			1,152			(330	)
Other income		72			29			100			57
Total revenue		43,127			49,443			98,145			89,983
Insurance benefits and losses incurred		34,151			32,219			69,458			65,391
Commissions and underwriting expenses		11,509			9,715			22,524			19,734
Interest expense		545			506			1,091			968
Other expense		2,511			2,970			5,376			6,208
Total benefits and expenses		48,716			45,410			98,449			92,301
Income (loss) before income taxes	$	(5,589	)	$	4,033		$	(304	)	$	(2,318	)
Net income (loss)	$	(4,426	)	$	3,185		$	(264	)	$	(1,839	)

-22-

Management also considers and evaluates performance by analyzing the non-GAAP measure operating income (loss), and believes it is a useful metric for investors, potential investors, securities analysts and others because it isolates the “core” operating results of the Company before considering certain items that are either beyond the control of management (such as taxes, which are subject to timing, regulatory and rate changes depending on the timing of the associated revenues and expenses) or are not expected to regularly impact the Company’s operational results (such as any realized and unrealized investment gains, which are not a part of the Company’s primary operations and are, to a limited extent, subject to discretion in terms of timing of realization).

A reconciliation of net income (loss) to operating loss for the three month and six month periods ended June 30, 2019 and the comparable period in 2018 is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
Reconciliation of  Non-GAAP Financial Measure	2019			2018			2019			2018
	(In thousands)
Net income (loss)	$	(4,426	)	$	3,185		$	(264	)	$	(1,839	)
Income tax expense (benefit)		(1,163	)		848			(40	)		(479	)
Realized investment (gains) losses, net		(610	)		57			(1,995	)		(313	)
Unrealized (gains) losses on equity securities, net		5,337			(4,089	)		(1,152	)		330
Non-GAAP operating income (loss)	$	(862	)	$	1		$	(3,451	)	$	(2,301	)

On a consolidated basis, the Company had net loss of $4.4 million, or $0.22 per diluted share, for the three month period ended June 30, 2019, compared to net income of $3.2 million, or $0.15 per diluted share, for the three month period ended June 30, 2018.  The Company had net loss of $0.3 million, or $0.02 per diluted share, for the six month period ended June 30, 2019, compared to net loss of $1.8 million, or $0.10 per diluted share, for the six month period ended June 30, 2018.  Premium revenue for the three month period ended June 30, 2019 increased $2.6 million, or 6.1%, to $45.5 million from $42.8 million in the three month period ended June 30, 2018.  For the six month period ended June 30, 2019, premium revenue increased $5.2 million, or 6.1%, to $90.3 million from $85.0 million in the comparable period in 2018.  The increase in premium revenue was primarily attributable to an increase in Medicare supplement business in the life and health operations, coupled with an increase in the automobile physical damage line of business in the property and casualty operations. Operating loss increased $0.9 million in the three month period ended June 30, 2019 from the three month period ended June 30, 2018.  For the six month period ended June 30, 2019, the operating loss increased $1.2 million over the comparable period in 2018.  The increase in operating loss was primarily due to unfavorable loss experience in the life and health operations.

A more detailed analysis of the individual operating segments and other corporate activities follows.

-23-

American Southern

The following summarizes American Southern’s premiums, losses, expenses and underwriting ratios for the three month and six month periods ended June 30, 2019 and the comparable periods in 2018:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(Dollars in thousands)
Gross written premiums	$	32,581		$	28,501		$	40,275		$	35,342
Ceded premiums		(1,313	)		(1,228	)		(2,688	)		(2,431	)
Net written premiums	$	31,268		$	27,273		$	37,587		$	32,911
Net earned premiums	$	14,754		$	13,542		$	28,560		$	26,249
Net loss and loss adjustment expenses		9,863			8,695			18,906			17,872
Underwriting expenses		4,480			4,019			8,690			7,406
Underwriting income	$	411		$	828		$	964		$	971
Loss ratio		66.8	%		64.2	%		66.2	%		68.1	%
Expense ratio		30.4			29.7			30.4			28.2
Combined ratio		97.2	%		93.9	%		96.6	%		96.3	%

Gross written premiums at American Southern increased $4.1 million, or 14.3%, during the three month period ended June 30, 2019 and $4.9 million, or 14.0%, during the six month period ended June 30, 2019, from the comparable periods in 2018. The increase in gross written premiums was primarily attributable to an increase in premiums written in the automobile physical damage line of business due to increased writings from certain agencies and a new agency that started in the second half of 2018. Partially offsetting the increase in gross written premiums was a decline in premiums written in the surety line of business as a result of increased competition.

Ceded premiums increased $0.1 million, or 6.9%, during the three month period ended June 30, 2019 and $0.3 million, or 10.6%, during the six month period ended June 30, 2019, from the comparable periods in 2018. The increase in ceded premiums in 2019 was due primarily to an increase in earned premiums in certain accounts within the automobile physical damage and general liability lines of business, which are subject to reinsurance.

The following presents American Southern’s net earned premiums by line of business for the three month and six month periods ended June 30, 2019 and the comparable periods in 2018:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Automobile liability	$	7,813	$	7,380	$	14,837	$	14,245
Automobile physical damage		3,799		2,897		7,401		5,352
General liability		819		715		1,603		1,453
Surety		1,608		1,778		3,295		3,712
Other lines		715		772		1,424		1,487
Total	$	14,754	$	13,542	$	28,560	$	26,249

Net earned premiums increased $1.2 million, or 8.9%, during the three month period ended June 30, 2019, and increased $2.3 million, or 8.8%, during the six month period ended June 30, 2019, over the comparable periods in 2018. The increase in net earned premiums was primarily attributable to an increase in automobile physical damage coverage resulting from additional writings from a new agency as previously mentioned. Premiums are earned ratably over their respective policy terms, and therefore premiums earned in the current year are related to policies written during both the current year and immediately preceding year.

The performance of an insurance company is often measured by its combined ratio. The combined ratio represents the percentage of losses, loss adjustment expenses and other expenses that are incurred for each dollar of premium earned by the Company. A combined ratio of under 100% represents an underwriting profit while a combined ratio of over 100% indicates an underwriting loss. The combined ratio is divided into two components, the loss ratio (the ratio of losses and loss adjustment expenses incurred to premiums earned) and the expense ratio (the ratio of expenses incurred to premiums earned).

-24-

Net loss and loss adjustment expenses at American Southern increased $1.2 million, or 13.4%, during the three month period ended June 30, 2019, and $1.0 million, or 5.8%, during the six month period ended June 30, 2019, over the comparable periods in 2018. As a percentage of earned premiums, net loss and loss adjustment expenses were 66.8% in the three month period ended June 30, 2019, compared to 64.2% in the three month period ended June 30, 2018.  For the six month period ended June 30, 2019, this ratio decreased to 66.2% from 68.1% in the comparable period in 2018. The increase in the loss ratio during the three month period ended June 30, 2019 was primarily due to less favorable loss experience in the auto liability, auto physical damage and general liability lines of business.  The decrease in the loss ratio during the six month period ended June 30, 2019 was primarily attributable to a decrease in the severity of losses in the surety line of business.

Underwriting expenses increased $0.5 million, or 11.5%, during the three month period ended June 30, 2019, and $1.3 million, or 17.3%, during the six month period ended June 30, 2019, over the comparable periods in 2018. As a percentage of earned premiums, underwriting expenses were 30.4% in the three month period ended June 30, 2019, compared to 29.7% in the three month period ended June 30, 2018. For the six month period ended June 30, 2019, this ratio increased to 30.4% from 28.2% in the comparable period in 2018.  The increase in the expense ratio during the six month period ended June 30, 2019 was primarily due to American Southern’s use of a variable commission structure with certain agents, which compensates the participating agents in relation to the loss ratios of the business they write. During periods in which the loss ratio decreases, commissions and underwriting expenses will generally increase, and conversely, during periods in which the loss ratio increases, commissions and underwriting expenses will generally decrease.  During the three month and six month periods ended June 30, 2019, variable commissions at American Southern increased $0.1 million and $0.6 million, respectively, from the comparable periods in 2018 due to more favorable loss experience in the surety line of business.

Bankers Fidelity

The following summarizes Bankers Fidelity’s earned premiums, losses, expenses and underwriting ratios for the three month and six month periods ended June 30, 2019 and the comparable periods in 2018:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(Dollars in thousands)
Medicare supplement	$	44,541		$	40,264		$	88,870		$	79,427
Other health products		1,896			1,745			3,886			3,590
Life insurance		2,154			2,271			4,296			4,573
Gross earned premiums		48,591			44,280			97,052			87,590
Ceded premiums		(17,876	)		(14,977	)		(35,361	)		(28,792	)
Net earned premiums		30,715			29,303			61,691			58,798
Insurance benefits and losses		24,288			23,524			50,552			47,519
Underwriting expenses		8,954			7,857			17,562			16,509
Total expenses		33,242			31,381			68,114			64,028
Underwriting loss	$	(2,527	)	$	(2,078	)	$	(6,423	)	$	(5,230	)
Loss ratio		79.1	%		80.3	%		81.9	%		80.8	%
Expense ratio		29.2			26.8			28.5			28.1
Combined ratio		108.3	%		107.1	%		110.4	%		108.9	%

Net earned premium revenue at Bankers Fidelity increased $1.4 million, or 4.8%, during the three month period ended June 30, 2019, and $2.9 million, or 4.9%, during the six month period ended June 30, 2019, over the comparable periods in 2018. Gross earned premiums from the Medicare supplement line of business increased $4.3 million, or 10.6%, during the three month period ended June 30, 2019, and $9.4 million, or 11.9%, during the six month period ended June 30, 2019, due primarily to successful execution of new business generating strategies with both new and existing agents. Other health product premiums increased $0.2 million, or 8.7%, during the three month period ended June 30, 2019, and $0.3 million, or 8.2%, during the six month period ended June 30, 2019, from the comparable periods in 2018, primarily as a result of new sales of the company’s hospital indemnity and group health products. Gross earned premiums from the life insurance line of business decreased $0.1 million, or 5.2%, during the three month period ended June 30, 2019, and $0.3 million, or 6.1%, during the six month period ended June 30, 2019 from the comparable periods in 2018 due to the redemption and settlement of existing policy obligations exceeding the level of new sales activity.  Premiums ceded increased $2.9 million, or 19.4%, during the three month period ended June 30, 2019 and $6.6 million, or 22.8%, during the six month period ended June 30, 2019, over the comparable periods in 2018.  The increase in ceded premiums for the three month and six month periods ended June 30, 2019 was due to a significant increase in Medicare supplement premiums subject to reinsurance.

-25-

Benefits and losses increased $0.8 million, or 3.2%, during the three month period ended June 30, 2019, and $3.0 million, or 6.4%, during the six month period ended June 30, 2019, over the comparable periods in 2018.  As a percentage of earned premiums, benefits and losses were 79.1% in the three month period ended June 30, 2019, compared to 80.3% in the three month period ended June 30, 2018.  For the six month period ended June 30, 2019, this ratio increased to 81.9% from 80.8% in the comparable period in 2018.  The decrease in the loss ratio for the three month period ended June 30, 2019 was primarily due to more favorable loss experience in the life insurance and certain products in the other health lines of business.  The increase in the loss ratio for the six month period ended June 30, 2019 was primarily attributable to unfavorable loss experience in the Medicare supplement line of business.  Throughout 2018 and continuing into the six month period ended June 30, 2019, Bankers Fidelity experienced a higher than expected level of claims in the Medicare supplement line of business which had an unfavorable effect on the Company’s loss patterns and increased the resultant loss ratio.

Underwriting expenses increased $1.1 million, or 14.0%, during the three month period ended June 30, 2019, and $1.1 million, or 6.4%, during the six month period ended June 30, 2019, over the comparable periods in 2018.  As a percentage of earned premiums, underwriting expenses were 29.2% in the three month period ended June 30, 2019, compared to 26.8% in the three month period ended June 30, 2018.  For the six month period ended June 30, 2019, this ratio increased to 28.5% from 28.1% in the comparable period in 2018. The increase in the expense ratio for the three month and six month periods ended June 30, 2019 was primarily due to an increase in expenses related to servicing the Medicare supplement line of business.

-26-

NET INVESTMENT INCOME AND REALIZED GAINS (LOSSES)

Investment income decreased $0.2 million, or 8.8%, during the three month period ended June 30, 2019, and $0.2 million, or 5.1%, during the six month period ended June 30, 2019, over the comparable periods in 2018. The decrease in investment income was primarily attributable to a decrease in the equity in earnings from investments in real estate partnerships during the three month and six month periods ended June 30, 2019 of $0.2 million and $0.3 million, respectively, over the comparable periods in 2018.

The Company had net realized investment gains of $0.6 million during the three month period ended June 30, 2019, compared to net realized investment losses of $0.1 million during the three month period ended June 30, 2018.  The Company had net realized investment gains of $2.0 million during the six month period ended June 30, 2019, compared to net realized investment gains of $0.3 million during the six month period ended June 30, 2018.  The net realized investment gains during the three month period ended June 30, 2019 resulted from the disposition of certain of the Company’s investments in fixed maturities.  The net realized investment gains during the six month period ended June 30, 2019 resulted from the disposition of several of the Company’s investments in fixed maturities and equity securities. Management continually evaluates the Company’s investment portfolio and makes adjustments for impairments and/or divests investments as may be determined to be appropriate.

UNREALIZED GAINS (LOSSES) ON EQUITY SECURITIES

On January 1, 2018 the Company adopted ASU No. 2016-01, which requires, among other things, investments in equity securities to be measured at fair value at the end of the reporting period, with any changes in fair value reported in net income. As a result of the adoption of ASU No. 2016-01, the Company recognized net unrealized losses on equity securities still held of $5.3 million during the three month period ended June 30, 2019 and unrealized gains on equity securities still held of $4.1 million during the three month period ended June 30, 2018.  The Company recognized net unrealized gains on equity securities still held of $1.2 million during the six month period ended June 30, 2019 and unrealized losses on equity securities still held of $0.3 million during the three month period ended June 30, 2018.  Changes in unrealized gains and losses on equity securities for the applicable periods are primarily the result of fluctuations in the market values of the Company’s equity investments.

INTEREST EXPENSE

Interest expense remained relatively consistent during the three month period ended June 30, 2019, and increased $0.1 million, or 12.7%, during the six month period ended June 30, 2019, over the comparable periods in 2018. The increase in interest expense was due to an increase in the London Interbank Offered Rate (“LIBOR”), as the interest rates on the Company’s outstanding junior subordinated deferrable interest debentures (“Junior Subordinated Debentures”) are directly related to LIBOR.

OTHER EXPENSES

Other expenses (commissions, underwriting expenses, and other expenses) increased $1.3 million, or 10.5%, during the three month period ended June 30, 2019, and $2.0 million, or 7.5%, during the six month period ended June 30, 2019, from the comparable periods in 2018. The increase in other expenses was primarily attributable to increased costs associated with the growth of the Medicare supplement line of business. Also contributing to the increase in other expenses was a $0.1 million and $0.6 million increase in the three month and six month periods ended June 30, 2019, respectively, in the variable commission accrual in the property and casualty operations. On a consolidated basis, as a percentage of earned premiums, other expenses increased to 30.8% in the three month period ended June 30, 2019 from 29.6% in the three month period ended June 30, 2018.  For the six month period ended June 30, 2019, this ratio increased to 30.9% from 30.5% in the comparable period in 2018. The increase in the expense ratio during the three month and six month periods ended June 30, 2019 was primarily attributable to the increase costs associated with the growth in Medicare supplement line of business and variable commissions, as discussed previously.

LIQUIDITY AND CAPITAL RESOURCES

The primary cash needs of the Company are for the payment of claims and operating expenses, maintaining adequate statutory capital and surplus levels, and meeting debt service requirements. Current and expected patterns of claim frequency and severity may change from period to period but generally are expected to continue within historical ranges. The Company’s primary sources of cash are written premiums, investment income and proceeds from the sale and maturity of its invested assets. The Company believes that, within each operating company, total invested assets will be sufficient to satisfy all policy liabilities and that cash inflows from investment earnings, future premium receipts and reinsurance collections will be adequate to fund the payment of claims and operating expenses as needed.

Cash flows at the Parent are derived from dividends, management fees, and tax-sharing payments, as described below, from the subsidiaries. The principal cash needs of the Parent are for the payment of operating expenses, the acquisition of capital assets and debt service requirements, as well as the repurchase of shares and payments of any dividends as may be authorized and approved by the Company’s board of directors from time to time. At June 30, 2019, the Parent had approximately $15.0 million of unrestricted cash and investments.

-27-

The Parent’s insurance subsidiaries reported a statutory net loss of $1.7 million for the six month period ended June 30, 2019, compared to statutory net loss of $1.0 million for the six month period ended June 30, 2018. Statutory results are impacted by the recognition of all costs of acquiring business. In periods in which the Company’s first year premiums increase, statutory results are generally lower than results determined under GAAP. Statutory results for the Company’s property and casualty operations may differ from the Company’s results of operations under GAAP due to the deferral of acquisition costs for financial reporting purposes. The Company’s life and health operations’ statutory results may differ from GAAP results primarily due to the deferral of acquisition costs for financial reporting purposes, as well as the use of different reserving methods.

Over 90% of the invested assets of the Parent’s insurance subsidiaries are invested in marketable securities that can be converted into cash, if required; however, the use of such assets by the Company is limited by state insurance regulations. Dividend payments to a parent corporation by its wholly owned insurance subsidiaries are subject to annual limitations and are restricted to 10% of statutory surplus or statutory earnings before recognizing realized investment gains of the individual insurance subsidiaries. At June 30, 2019, American Southern had $42.0 million of statutory surplus and Bankers Fidelity had $28.0 million of statutory surplus. In 2019, dividend payments by the Parent’s insurance subsidiaries in excess of $4.3 million would require prior approval. Through June 30, 2019, the Parent received dividends of $2.4 million from its subsidiaries.

The Parent provides certain administrative and other services to each of its insurance subsidiaries. The amounts charged to and paid by the subsidiaries include reimbursements for various shared services and other expenses incurred directly on behalf of the subsidiaries by the Parent. In addition, there is in place a formal tax-sharing agreement between the Parent and its insurance subsidiaries. As a result of the Parent’s tax loss, it is anticipated that the tax-sharing agreement will continue to provide the Parent with additional funds from profitable subsidiaries to assist in meeting its cash flow obligations.

The Company has two statutory trusts which exist for the exclusive purpose of issuing trust preferred securities representing undivided beneficial interests in the assets of the trusts and investing the gross proceeds of the trust preferred securities in Junior Subordinated Debentures. The outstanding $18.0 million and $15.7 million of Junior Subordinated Debentures mature on December 4, 2032 and May 15, 2033, respectively, are callable quarterly, in whole or in part, only at the option of the Company, and have an interest rate of three-month LIBOR plus an applicable margin. The margin ranges from 4.00% to 4.10%. At June 30, 2019, the effective interest rate was 6.57%. The obligations of the Company with respect to the issuances of the trust preferred securities represent a full and unconditional guarantee by the Parent of each trust’s obligations with respect to the trust preferred securities. Subject to certain exceptions and limitations, the Company may elect from time to time to defer Junior Subordinated Debenture interest payments, which would result in a deferral of distribution payments on the related trust preferred securities. As of June 30, 2019, the Company has not made such an election.

The Company intends to pay its obligations under the Junior Subordinated Debentures using existing cash balances, dividend and tax-sharing payments from the operating subsidiaries, or from potential future financing arrangements.

At June 30, 2019, the Company had 55,000 shares of Series D preferred stock (“Series D Preferred Stock”) outstanding. All of the shares of Series D Preferred Stock are held by an affiliate of the Company’s controlling shareholder. The outstanding shares of Series D Preferred Stock have a stated value of $100 per share; accrue annual dividends at a rate of $7.25 per share (payable in cash or shares of the Company’s common stock at the option of the board of directors of the Company) and are cumulative. In certain circumstances, the shares of the Series D Preferred Stock may be convertible into an aggregate of approximately 1,378,000 shares of the Company’s common stock, subject to certain adjustments and provided that such adjustments do not result in the Company issuing more than approximately 2,703,000 shares of common stock without obtaining prior shareholder approval; and are redeemable solely at the Company’s option. The Series D Preferred Stock is not currently convertible. At June 30, 2019, the Company had accrued but unpaid dividends on the Series D Preferred Stock totaling $0.2 million.

Cash and cash equivalents decreased from $12.6 million at December 31, 2018 to $11.5 million at June 30, 2019. The decrease in cash and cash equivalents during the six month period ended June 30, 2019 was primarily attributable to net cash used in operating activities of $7.2 million, partially offset by a $6.6 million increase resulting from investment sales and maturity of securities exceeding purchases of securities.

The Company believes that existing cash balances as well as the dividends, fees, and tax-sharing payments it expects to receive from its subsidiaries and, if needed, additional borrowings from financial institutions, 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.

-28-

OFF-BALANCE SHEET ARRANGEMENTS

The Company disclosed its off-balance sheet arrangements in the 2018 Annual Report.  As of June 30, 2019, there have been no material changes to these off-balance sheet arrangements outside the ordinary course of business.

CONTRACTUAL OBLIGATIONS

As a smaller reporting company, the Company has elected to comply with certain scaled disclosure reporting obligations, and therefore is not providing the table of contractual obligations required by Item 303 of Regulation S-K.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act of 1934 (the “Exchange Act”) reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applies its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives. The Company’s management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures can prevent all possible errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. There are inherent limitations in all control systems, including the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the intentional acts of one or more persons. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and, while our disclosure controls and procedures are designed to be effective under circumstances where they should reasonably be expected to operate effectively, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in any control system, misstatements due to possible errors or fraud may occur and may not be detected. An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains and references certain information that constitutes forward-looking statements as that term is defined in the federal securities laws. Statements, to the extent they are not statements of historical facts, should be considered forward-looking statements, and are subject to various risks and uncertainties. Such forward-looking statements are made based upon management’s current assessments of various risks and uncertainties, as well as assumptions made in accordance with the “safe harbor” provisions of the federal securities laws. 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 filings made by the Company from time to time with the Securities and Exchange Commission. In addition, other risks and uncertainties not known by us, or that we currently determine to not be material, may materially adversely affect our financial condition, results of operations or cash flows. The Company undertakes no obligation to update any forward-looking statement as a result of subsequent developments, changes in underlying assumptions or facts, or otherwise.

-29-

PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On October 31, 2016, the Board of Directors of the Company approved a plan that allows for the repurchase of up to 750,000 shares of the Company’s common stock (the “Repurchase Plan”) on the open market or in privately negotiated transactions, as determined by an authorized officer of the Company. Any such repurchases could be made from time to time in accordance with applicable securities laws and other requirements. The Company suspended the Repurchase Plan in May 2019 in connection with ending the relationship with the registered broker under the Repurchase Plan. The Company expects to evaluate implementation of a replacement plan in the future.

Other than pursuant to the Repurchase Plan, no purchases of common stock of the Company were made by or on behalf of the Company during the periods described below.

The table below sets forth information regarding repurchases by the Company of shares of its common stock on a monthly basis during the three month period ended June 30, 2019.

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, 2019		6,400	$	2.56		6,400		327,074
May 1 – May 31, 2019		1,945		2.55		1,945		325,129
June 1 – June 30, 2019		-		-		-		325,129
Total		8,345	$	2.56		8,345

Item 6. Exhibits

31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	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.

-30-

SIGNATURES

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: August 13, 2019	By:	/s/ J. Ross Franklin
		J. Ross Franklin
		Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

-31-

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Hilton H. Howell, Jr., certify that:

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 13, 2019	/s/ Hilton H. Howell, Jr.
	Hilton H. Howell, Jr.
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Ross Franklin, certify that:

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 13, 2019	/s/ J. Ross Franklin
	J. Ross Franklin
	Vice President and
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with the filing of the Quarterly Report on Form 10-Q of Atlantic American Corporation (the “Company”) for the quarterly period ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, that, to such officer’s knowledge:

(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 13, 2019	/s/ Hilton H. Howell, Jr.
	Hilton H. Howell, Jr.
	President and Chief Executive Officer
Date: August 13, 2019	/s/ J. Ross Franklin
	J. Ross Franklin
	Vice President and
	Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Jul. 26, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity Registrant Name	ATLANTIC AMERICAN CORP
Entity Address, State or Province	GA
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding		20,160,859
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000008177

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
ASSETS
Cash and cash equivalents	$ 11,450	$ 12,630
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost: $217,291 and $219,924)	223,275	210,386
Equity securities, at fair value (cost: $9,060 and $10,515)	20,455	20,758
Other invested assets (cost: $7,005 and $6,905)	7,380	7,424
Policy loans	2,007	2,085
Real estate	38	38
Investment in unconsolidated trusts	1,238	1,238
Total investments	254,393	241,929
Receivables:
Reinsurance	30,253	26,110
Insurance premiums and other (net of allowance for doubtful accounts: $187 and $207)	23,891	15,223
Deferred income taxes, net	1,537	4,184
Deferred acquisition costs	38,144	37,094
Other assets	9,518	4,560
Intangibles	2,544	2,544
Total assets	371,730	344,274
LIABILITIES AND SHAREHOLDERS' EQUITY
Future policy benefits	92,108	90,257
Unearned premiums	33,947	24,206
Losses and claims	75,155	72,612
Other policy liabilities	1,331	1,973
Total insurance reserves and policyholder funds	202,541	189,048
Other liabilities	22,681	20,116
Junior subordinated debenture obligations, net	33,738	33,738
Total liabilities	258,960	242,902
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: 20,160,859 and 20,170,360	22,401	22,401
Additional paid-in capital	57,444	57,414
Retained earnings	36,342	37,208
Accumulated other comprehensive income (loss)	4,727	(7,535)
Unearned stock grant compensation	(150)	(186)
Treasury stock, at cost: 2,240,035 and 2,230,534 shares	(8,049)	(7,985)
Total shareholders' equity	112,770	101,372
Total liabilities and shareholders' equity	$ 371,730	$ 344,274

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Investments:
Fixed maturities, cost	$ 217,291	$ 219,924
Equity securities, cost	9,060	10,515
Other invested assets, cost	7,005	6,905
Receivables:
Insurance premiums and other, allowance for doubtful accounts	$ 187	$ 207
Shareholders' equity:
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	4,000,000	4,000,000
Preferred stock, shares issued (in shares)	55,000	55,000
Preferred stock, shares outstanding (in shares)	55,000	55,000
Preferred stock, redemption value	$ 5,500	$ 5,500
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	22,400,894	22,400,894
Common stock, shares outstanding (in shares)	20,160,859	20,170,360
Treasury stock, at cost (in shares)	2,240,035	2,230,534

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenue:
Insurance premiums, net	$ 45,469	$ 42,845	$ 90,251	$ 85,047
Net investment income	2,313	2,537	4,647	4,896
Realized investment gains (losses), net	610	(57)	1,995	313
Unrealized gains (losses) on equity securities, net	(5,337)	4,089	1,152	(330)
Other income	72	29	100	57
Total revenue	43,127	49,443	98,145	89,983
Benefits and expenses:
Insurance benefits and losses incurred	34,151	32,219	69,458	65,391
Commissions and underwriting expenses	11,509	9,715	22,524	19,734
Interest expense	545	506	1,091	968
Other expense	2,511	2,970	5,376	6,208
Total benefits and expenses	48,716	45,410	98,449	92,301
Income (loss) before income taxes	(5,589)	4,033	(304)	(2,318)
Income tax expense (benefit)	(1,163)	848	(40)	(479)
Net income (loss)	(4,426)	3,185	(264)	(1,839)
Preferred stock dividends	(100)	(100)	(199)	(199)
Net income (loss) applicable to common shareholders	$ (4,526)	$ 3,085	$ (463)	$ (2,038)
Earnings (loss) per common share (basic) (in dollars per share)	$ (0.22)	$ 0.15	$ (0.02)	$ (0.10)
Earnings (loss) per common share (diluted) (in dollars per share)	$ (0.22)	$ 0.15	$ (0.02)	$ (0.10)

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net income (loss)	$ (4,426)	$ 3,185	$ (264)	$ (1,839)
Available-for-sale fixed maturity securities:
Gross unrealized holding gain (loss) arising in the period	7,964	(3,616)	16,404	(10,390)
Related income tax effect	(1,673)	760	(3,445)	2,182
Subtotal	6,291	(2,856)	12,959	(8,208)
Less: reclassification adjustment for net realized (gains) losses included in net income (loss)	(610)	57	(882)	(313)
Related income tax effect	128	(12)	185	66
Subtotal	(482)	45	(697)	(247)
Total other comprehensive income (loss), net of tax	5,809	(2,811)	12,262	(8,455)
Total comprehensive income (loss)	$ 1,383	$ 374	$ 11,998	$ (10,294)

XML

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Unearned Stock Grant Compensation [Member]	Treasury Stock [Member]	Total
Balance, beginning of period at Dec. 31, 2017	$ 55	$ 22,401	$ 57,495	$ 30,993	$ 9,751	$ (579)	$ (7,133)
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018 at Dec. 31, 2017				9,825	(9,825)
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018 at Dec. 31, 2017				(2,100)	2,100
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)				(1,839)				$ (1,839)
Other comprehensive income (loss), net of tax					(8,455)			(8,455)
Dividends on common stock				(407)
Dividends accrued on preferred stock				(199)
Restricted stock grants, net of forfeitures			(88)			135	(47)
Amortization of unearned compensation						122
Purchase of shares for treasury	0	0					(360)
Net shares acquired related to employee share-based compensation plans							(197)
Issuance of shares under stock plans	0	0	9				10
Balance, end of period at Jun. 30, 2018	55	22,401	57,416	36,273	(6,429)	(322)	(7,727)	$ 101,667
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared on common stock (in dollars per share)								$ (0.02)
Balance, beginning of period at Mar. 31, 2018	55	22,401	57,431	33,188	(3,618)	(387)	(7,346)
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018 at Mar. 31, 2018				0	0
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018 at Mar. 31, 2018				0	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)				3,185				$ 3,185
Other comprehensive income (loss), net of tax					(2,811)			(2,811)
Dividends on common stock				0
Dividends accrued on preferred stock				(100)
Restricted stock grants, net of forfeitures			(20)			20	0
Amortization of unearned compensation						45
Purchase of shares for treasury	0	0					(281)
Net shares acquired related to employee share-based compensation plans							(107)
Issuance of shares under stock plans	0	0	5				7
Balance, end of period at Jun. 30, 2018	55	22,401	57,416	36,273	(6,429)	(322)	(7,727)	$ 101,667
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared on common stock (in dollars per share)								$ 0
Balance, beginning of period at Dec. 31, 2018	55	22,401	57,414	37,208	(7,535)	(186)	(7,985)	$ 101,372
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018 at Dec. 31, 2018				0	0
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018 at Dec. 31, 2018				0	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)				(264)				(264)
Other comprehensive income (loss), net of tax					12,262			12,262
Dividends on common stock				(403)
Dividends accrued on preferred stock				(199)
Restricted stock grants, net of forfeitures			24			(71)	47
Amortization of unearned compensation						107
Purchase of shares for treasury	0	0					(71)
Net shares acquired related to employee share-based compensation plans							(49)
Issuance of shares under stock plans	0	0	6				9
Balance, end of period at Jun. 30, 2019	55	22,401	57,444	36,342	4,727	(150)	(8,049)	$ 112,770
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared on common stock (in dollars per share)								$ (0.02)
Balance, beginning of period at Mar. 31, 2019	55	22,401	57,417	40,868	(1,082)	(128)	(8,044)
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018 at Mar. 31, 2019				0	0
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018 at Mar. 31, 2019				0	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)				(4,426)				$ (4,426)
Other comprehensive income (loss), net of tax					5,809			5,809
Dividends on common stock				0
Dividends accrued on preferred stock				(100)
Restricted stock grants, net of forfeitures			24			(71)	47
Amortization of unearned compensation						49
Purchase of shares for treasury	0	0					(22)
Net shares acquired related to employee share-based compensation plans							(35)
Issuance of shares under stock plans	0	0	3				5
Balance, end of period at Jun. 30, 2019	$ 55	$ 22,401	$ 57,444	$ 36,342	$ 4,727	$ (150)	$ (8,049)	$ 112,770
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared on common stock (in dollars per share)								$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (264)	$ (1,839)
Adjustments to reconcile loss to net cash used in operating activities:
Acquisition costs deferred, net	(1,050)	(1,499)
Realized investment gains, net	(1,995)	(313)
Unrealized (gains) losses on equity securities, net	(1,152)	330
Distributions received from equity method investees	106	202
Compensation expense related to share awards	107	122
Depreciation and amortization	337	532
Deferred income tax benefit	(612)	(1,218)
Increase in receivables, net	(13,393)	(12,691)
Increase in insurance reserves and policyholder funds	13,493	17,837
Increase (decrease) in other liabilities	2,366	(7,712)
Other, net	(5,162)	(147)
Net cash used in operating activities	(7,219)	(6,396)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investments sold	70,171	25,849
Proceeds from investments matured, called or redeemed	3,628	3,985
Investments purchased	(67,220)	(39,329)
Additions to property and equipment	(32)	(224)
Net cash provided by (used in) investing activities	6,547	(9,719)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends on common stock	(403)	(407)
Proceeds from shares issued under stock plans	15	19
Treasury stock acquired - share repurchase authorization	(71)	(360)
Treasury stock acquired - net employee share-based compensation	(49)	(197)
Net cash used in financing activities	(508)	(945)
Net decrease in cash and cash equivalents	(1,180)	(17,060)
Cash and cash equivalents at beginning of period	12,630	24,547
Cash and cash equivalents at end of period	11,450	7,487
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	1,100	941
Cash paid for income taxes	$ 850	$ 1,412

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2019

Basis of Presentation [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Atlantic American Corporation (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”). The Parent’s primary operating subsidiaries, American Southern Insurance Company and American Safety Insurance Company (together known as “American Southern”) and Bankers Fidelity Life Insurance Company and Bankers Fidelity Assurance Company (together known as “Bankers Fidelity”), operate in two principal business units. American Southern operates in the property and casualty insurance market, while Bankers Fidelity operates in the life and health insurance market. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The unaudited condensed consolidated financial statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Annual Report”). The Company’s financial condition and results of operations and cash flows as of and for the three month and six month periods ended June 30, 2019 are not necessarily indicative of the financial condition or results of operations and cash flows that may be expected for the year ending December 31, 2019 or for any other future period.

The Company’s significant accounting policies have not changed materially from those set out in the 2018 Annual Report, except as noted below for the adoption of new accounting standards.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

XML

Recently Issued Accounting Standards

6 Months Ended

Jun. 30, 2019

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

Note 2. Recently Issued Accounting Standards

Adoption of New Accounting Standards

Leases. On January 1, 2019, the Company adopted the requirements of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The objective of this ASU, along with several related ASUs issued subsequently, is to increase transparency and comparability between organizations that enter into lease agreements. For lessees, the key difference of the new standard from the previous guidance (Topic 840) is the recognition of a right-of-use (“ROU”) asset and lease liability on the balance sheet. The most significant change is the requirement to recognize ROU assets and lease liabilities for leases classified as operating leases. The new standard requires disclosures to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

As part of the transition to the new standard, the Company was required to measure and recognize leases that existed at January 1, 2019 and elected to use a modified retrospective approach. For leases that existed at the effective date, the Company elected the package of three transition practical expedients and therefore did not reassess any of the following: (i) whether an arrangement is or contains a lease, (ii) lease classification, or (iii) what qualifies as an initial direct cost.

The adoption of this ASU resulted in the Company recognizing a ROU asset of $6,088 as part of other assets and a lease liability of $6,088 as part of other liabilities in the consolidated balance sheet. The adoption of this ASU did not have a material effect on the Company’s results of operations or liquidity.

Revenue from Contracts with Customers. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09, as modified, provides guidance for recognizing revenue which excludes insurance contracts and financial instruments. Revenue is to be recognized when, or as, goods or services are transferred to customers in an amount that reflects the consideration that an entity is expected to be entitled in exchange for those goods or services. For the six months ended June 30, 2019 and 2018, approximately $100 and $57, respectively, or approximately one-tenth of 1% of the Company’s total revenues, were within the scope of this updated guidance. The Company adopted ASU 2014-09 as of January 1, 2018. The adoption of this ASU did not have an impact on the Company’s consolidated financial statements.

Future Adoption of New Accounting Standards

For information regarding accounting standards that the Company has not yet adopted, see the “Recently Issued Accounting Standards - Future Adoption of New Accounting Standards” section of Note 1 of Notes to Consolidated Financial Statements in the 2018 Annual Report.

XML

Investments

6 Months Ended

Jun. 30, 2019

Investments [Abstract]

Investments

Note 3. Investments

The following tables set forth the estimated fair value, gross unrealized gains, gross unrealized losses and cost or amortized cost of the Company’s investments in fixed maturities and equity securities, aggregated by type and industry, as of June 30, 2019 and December 31, 2018.

Fixed maturities were comprised of the following:

	June 30, 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	$	27,929	$	560	$	329	$	27,698
Obligations of states and political subdivisions		4,999		420		-		4,579
Corporate securities:
Utilities and telecom		17,482		1,654		-		15,828
Financial services		61,103		2,506		474		59,071
Other business – diversified		43,516		1,667		658		42,507
Other consumer – diversified		68,054		1,889		1,251		67,416
Total corporate securities		190,155		7,716		2,383		184,822
Redeemable preferred stocks:
Other consumer – diversified		192		—		—		192
Total redeemable preferred stocks		192		—		—		192
Total fixed maturities	$	223,275	$	8,696	$	2,712	$	217,291

	December 31, 2018
	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	$	27,422	$	36	$	1,061	$	28,447
Obligations of states and political subdivisions		8,364		347		72		8,089
Corporate securities:
Utilities and telecom		19,642		873		431		19,200
Financial services		49,477		747		2,942		51,672
Other business – diversified		49,196		226		2,844		51,814
Other consumer – diversified		56,093		84		4,501		60,510
Total corporate securities		174,408		1,930		10,718		183,196
Redeemable preferred stocks:
Other consumer – diversified		192		—		—		192
Total redeemable preferred stocks		192		—		—		192
Total fixed maturities	$	210,386	$	2,313	$	11,851	$	219,924

Bonds having an amortized cost of $10,444 and $10,452 and included in the tables above were on deposit with insurance regulatory authorities as of June 30, 2019 and December 31, 2018, respectively, in accordance with statutory requirements.

Equity securities were comprised of the following:

	June 30, 2019
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost or Amortized Cost
Equity securities:
Common and non-redeemable preferred stocks:
Financial services	$	4,799	$	419	$	—	$	4,380
Other business – diversified		318		271		—		47
Other consumer – diversified		15,338		10,705		—		4,633
Total equity securities	$	20,455	$	11,395	$	—	$	9,060

	December 31, 2018
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost or Amortized Cost
Equity securities:
Common and non-redeemable preferred stocks:
Utilities and telecom	$	1,686	$	722	$	—	$	964
Financial services		4,552		172		—		4,380
Other business – diversified		306		259		—		47
Other consumer – diversified		14,214		9,090		—		5,124
Total equity securities	$	20,758	$	10,243	$	—	$	10,515

The carrying value and amortized cost of the Company’s investments in fixed maturities at June 30, 2019 and December 31, 2018 by contractual maturity were as follows. Actual maturities may differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.

	June 30, 2019				December 31, 2018
	Carrying Value		Amortized Cost		Carrying Value		Amortized Cost
Due in one year or less	$	-	$	-	$	3,150	$	3,150
Due after one year through five years		16,262		16,345		19,787		19,699
Due after five years through ten years		93,243		91,052		127,617		133,863
Due after ten years		97,444		93,488		43,823		46,338
Asset backed securities		16,326		16,406		16,009		16,874
Totals	$	223,275	$	217,291	$	210,386	$	219,924

The following tables present the Company’s unrealized losses for securities by type and length of time the security was in a continuous unrealized loss position as of June 30, 2019 and December 31, 2018.

	June 30, 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		$	—		$	—		$	10,865		$	329		$	10,865		$	329
Corporate securities			2,051			5			32,070			2,378			34,121			2,383
Total temporarily impaired securities		$	2,051		$	5		$	42,935		$	2,707		$	44,986		$	2,712

	December 31, 2018
	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		$	—		$	—		$	24,786		$	1,061		$	24,786		$	1,061
Obligations of states and political subdivisions			—			—			3,980			72			3,980			72
Corporate securities			49,633			1,592			97,012			9,126			146,645			10,718
Total temporarily impaired securities		$	49,633		$	1,592		$	125,778		$	10,259		$	175,411		$	11,851

The evaluation for an other than temporary impairment (“OTTI”) is a quantitative and qualitative process, which is subject to risks and uncertainties in the determination of whether declines in the fair value of investments are other than temporary. Potential risks and uncertainties include, among other things, changes in general economic conditions, an issuer’s financial condition or near term recovery prospects and the effects of changes in interest rates. In evaluating a potential impairment, the Company considers, among other factors, management’s intent and ability to hold the securities until price recovery, the nature of the investment and the expectation of prospects for the issuer and its industry, the status of an issuer’s continued satisfaction of its obligations in accordance with their contractual terms, and management’s expectation as to the issuer’s ability and intent to continue to do so, as well as ratings actions that may affect the issuer’s credit status.

There were no OTTI charges recorded during the three month and six month periods ended June 30, 2019 and 2018.

As of June 30, 2019 and December 31, 2018, there were thirty-three and one hundred forty securities, respectively, in an unrealized loss position which primarily included certain of the Company’s investments in fixed maturities within the financial services, other diversified business and other diversified consumer sectors. The decrease in the number and value of securities in an unrealized loss position during the six month period ended June 30, 2019 was primarily attributable to the appreciation of fixed maturity market prices due to the current interest rate environment. The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position. Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, including those described above, the Company has deemed these securities to be temporarily impaired as of June 30, 2019.

The following table is a summary of realized investment gains (losses) for the three month and six month periods ended June 30, 2019 and 2018.

	Three Months Ended June 30, 2019
	Fixed Maturities			Equity Securities			Other Invested Assets			Total
Gains		$	610		$	—		$	—		$	610
Losses			—			—			—			—
Realized investment gains (losses), net		$	610		$	—		$	—		$	610

	Three Months Ended June 30, 2018
	Fixed Maturities				Equity Securities			Other Invested Assets			Total
Gains		$	247			$	—		$	—		$	247
Losses			(304	)			—			—			(304	)
Realized investment gains (losses), net		$	(57	)		$	—		$	—		$	(57	)

	Six Months Ended June 30, 2019
	Fixed Maturities			Equity Securities			Other Invested Assets			Total
Gains		$	882		$	1,113		$	—		$	1,995
Losses			—			—			—			—
Realized investment gains (losses), net		$	882		$	1,113		$	—		$	1,995

	Six Months Ended June 30, 2018
	Fixed Maturities				Equity Securities			Other Invested Assets			Total
Gains		$	617			$	—		$	—		$	617
Losses			(304	)			—			—			(304	)
Realized investment gains (losses), net		$	313			$	—		$	—		$	313

The following table presents the portion of unrealized gains (losses) related to equity securities still held for the three month and six month periods ended June 30, 2019 and 2018.

	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019		2018
Net gains (losses) recognized during the period on equity securities	$	(5,337	)	$	4,089	$	2,265	$	(330	)
Less: Net 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 still held at the reporting date	$	(5,337	)	$	4,089	$	1,152	$	(330	)

Variable Interest Entities

The Company holds passive interests in a number of entities that are considered to be variable interest entities (“VIEs”) under GAAP guidance. The Company’s VIE interests principally consist of interests in limited partnerships and limited liability companies formed for the purpose of achieving diversified equity returns. The Company’s VIE interests, carried as a part of other invested assets, totaled $7,380 and $7,424 as of June 30, 2019 and December 31, 2018, respectively. The Company’s VIE interests, carried as a part of investment in unconsolidated trusts, totaled $1,238 as of June 30, 2019 and December 31, 2018.

The Company does not have power over the activities that most significantly impact the economic performance of these VIEs and thus is not the primary beneficiary. Therefore, the Company has not consolidated these VIEs. The Company’s involvement with each VIE is limited to its direct ownership interest in the VIE. The Company has no arrangements with any of the VIEs to provide other financial support to or on behalf of the VIE. The Company’s maximum loss exposure relative to these investments was limited to the carrying value of the Company’s investment in the VIEs, which amount to $8,618 and $8,662, as of June 30, 2019 and December 31, 2018, respectively. As of June 30, 2019 and December 31, 2018, the Company has outstanding commitments totaling $4,900 and $0, respectively, whereby the Company is committed to fund these investments and may be called by such VIEs during the commitment period to fund the purchase of new investments and partnership expenses.

XML

Fair Values of Financial Instruments

6 Months Ended

Jun. 30, 2019

Fair Values of Financial Instruments [Abstract]

Fair Values of Financial Instruments

Note 4. Fair Values of Financial Instruments

The estimated fair values have been determined by the Company using available market information from various market sources and appropriate valuation methodologies as of the respective dates. However, considerable judgment is necessary to interpret market data and to develop the estimates of fair value. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, the estimates presented herein are not necessarily indicative of the amounts which the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The following describes the fair value hierarchy and provides information as to the extent to which the Company uses fair value to measure the value of its financial instruments and information about the inputs used to value those financial instruments. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three broad levels.

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, U.S. Treasury securities 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. 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 a matrix pricing concept, which is a mathematical technique used widely in the industry to value debt securities based on various relationships to other benchmark quoted prices.

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. The Company’s financial instruments valued using Level 3 criteria consist of a limited number of fixed maturities. As of June 30, 2019 and December 31, 2018, the value of the Company’s fixed maturities valued using Level 3 criteria was $1,174 and $1,066, respectively. The use of different criteria or assumptions regarding data may have yielded materially different valuations.

As of June 30, 2019, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	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	$	11,603	$	210,498		$	1,174	(1)	$	223,275
Equity securities		15,855		4,600	(1)		—			20,455
Cash equivalents		6,925		—			—			6,925
Total	$	34,383	$	215,098		$	1,174		$	250,655

⁽¹⁾ All underlying securities are financial services industry related.

As of December 31, 2018, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	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	$	11,413	$	197,907		$	1,066	(1)	$	210,386
Equity securities		16,398		4,360	(1)		—			20,758
Cash equivalents		8,250		—			—			8,250
Total	$	36,061	$	202,267		$	1,066		$	239,394

⁽¹⁾ All underlying securities are financial services industry related.

The following tables provide a roll-forward of the Company’s financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three month and six month periods ended June 30, 2019 and 2018.

	Fixed Maturities
Balance, December 31, 2018	$	1,066
Total unrealized gains included in other comprehensive loss		49
Balance, March 31, 2019		1,115
Total unrealized gains included in other comprehensive income		59
Balance, June 30, 2019	$	1,174

	Fixed Maturities
Balance, December 31, 2017	$	1,369
Total unrealized losses included in other comprehensive loss		(30	)
Balance, March 31, 2018		1,339
Total unrealized gains included in other comprehensive loss		7
Balance, June 30, 2018	$	1,346

The Company’s fixed maturities valued using Level 3 inputs consist solely of issuances of pooled debt obligations of multiple, smaller financial services companies that are not actively traded. There are no assumed prepayments and/or default probability assumptions as a majority of these instruments contain certain U.S. government agency strips to support repayment of the principal. Other qualitative and quantitative information received from the original underwriter of the pooled offerings is also considered, as applicable.

The following table sets forth the carrying amount, estimated fair value and level within the fair value hierarchy of the Company’s financial instruments as of June 30, 2019 and December 31, 2018.

			June 30, 2019				December 31, 2018
	Level in Fair Value Hierarchy (1)		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Cash and cash equivalents	Level 1		$	11,450	$	11,450	$	12,630	$	12,630
Fixed maturities	(1	)		223,275		223,275		210,386		210,386
Equity securities	(1	)		20,455		20,455		20,758		20,758
Other invested assets	Level 3			7,380		7,380		7,424		7,424
Policy loans	Level 2			2,007		2,007		2,085		2,085
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		33,738		33,738		33,738

⁽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.

There have not been any transfers between Level 1, Level 2 and Level 3 during the periods presented in these condensed consolidated financial statements.

XML

Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses

6 Months Ended

Jun. 30, 2019

Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses [Abstract]

Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses

Note 5. Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses

The roll-forward of liabilities for unpaid losses, claims and loss adjustment expenses is as follows:

	Six Months Ended June 30,
	2019			2018
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	72,612		$	65,689
Less: Reinsurance recoverable on unpaid losses		(14,354	)		(11,968	)
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net		58,258			53,721
Incurred related to:
Current accident year		68,157			63,230
Prior accident year development		103			(163	)
Total incurred		68,260			63,067
Paid related to:
Current accident year		38,875			36,508
Prior accident years		28,576			22,872
Total paid		67,451			59,380
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net		59,067			57,408
Plus: Reinsurance recoverable on unpaid losses		16,088			14,667
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	75,155		$	72,075

Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred:

	Six Months Ended June 30,
	2019		2018
Total incurred losses	$	68,260	$	63,067
Cash surrender value and matured endowments		588		707
Benefit reserve changes		610		1,617
Total insurance benefits and losses incurred	$	69,458	$	65,391

XML

Junior Subordinated Debentures

6 Months Ended

Jun. 30, 2019

Junior Subordinated Debentures [Abstract]

Junior Subordinated Debentures

Note 6. Junior Subordinated Debentures

The Company has two unconsolidated Connecticut statutory business trusts, which exist for the exclusive purposes of: (i) issuing trust preferred securities (“Trust Preferred Securities”) representing undivided beneficial interests in the assets of the trusts; (ii) investing the gross proceeds of the Trust Preferred Securities in junior subordinated deferrable interest debentures (“Junior Subordinated Debentures”) of Atlantic American; and (iii) engaging in those activities necessary or incidental thereto.

The financial structure of each of Atlantic American Statutory Trust I and II as of June 30, 2019 was as follows:

	Atlantic American Statutory Trust I			Atlantic American Statutory Trust II
JUNIOR SUBORDINATED DEBENTURES (1) (2)
Principal amount owed June 30, 2019	$	18,042		$	23,196
Less: Treasury debt (3)		—			(7,500	)
Net balance June 30, 2019	$	18,042		$	15,696
Net balance December 31, 2018	$	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.

XML

Earnings (Loss) Per Common Share

6 Months Ended

Jun. 30, 2019

Earnings (Loss) Per Common Share [Abstract]

Earnings (Loss) Per Common Share

Note 7. Earnings (Loss) Per Common Share

A reconciliation of the numerator and denominator used in the loss per common share calculations is as follows:

	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	)

	Three Months Ended June 30, 2018
	Income			Weighted Average Shares (In thousands)		Per Share Amount
Basic Earnings Per Common Share:
Net income	$	3,185			20,286
Less preferred stock dividends		(100	)
Net income applicable to common shareholders		3,085			20,286	$	.15
Diluted Earnings Per Common Share:
Effect of Series D preferred stock		100			1,378
Net income applicable to common shareholders	$	3,185			21,664	$	.15

	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	)

	Six Months Ended June 30, 2018
	Loss			Weighted Average Shares (In thousands)		Per Share Amount
Basic and Diluted Loss Per Common Share:
Net loss	$	(1,839	)		20,352
Less preferred stock dividends		(199	)		—
Net loss applicable to common shareholders	$	(2,038	)		20,352	$	(.10	)

The assumed conversion of the Company’s Series D preferred stock was excluded from the earnings (loss) per common share calculation for all periods presented, except for the three month period ended June 30, 2018, since its impact would have been antidilutive.

XML

Income Taxes

6 Months Ended

Jun. 30, 2019

Income Taxes [Abstract]

Income Taxes

Note 8. Income Taxes

A reconciliation of the differences between income taxes computed at the federal statutory income tax rate and income tax benefit is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Federal income tax provision at statutory rate of 21%	$	(1,174	)	$	847		$	(64	)	$	(487	)
Dividends-received deduction		(5	)		(10	)		(14	)		(20	)
Other permanent differences		16			11			38			28
Income tax expense (benefit)	$	(1,163	)	$	848		$	(40	)	$	(479	)

The components of income tax benefit were:

	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019			2018
Current - Federal	$	572		$	703	$	572		$	739
Deferred - Federal		(1,735	)		145		(612	)		(1,218	)
Total	$	(1,163	)	$	848	$	(40	)	$	(479	)

XML

Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Note 9. Leases

The Company has identified two operating lease agreements, each for the use of office space in the ordinary course of business. The first lease renews annually on an automatic basis and based on original assumptions, management is reasonably certain to exercise the renewal option for an additional eight years from the January 1, 2019 effective date of the new lease guidance. The original term of the second lease was ten years and amended in January 2017 to provide for an additional seven years, with a termination date on September 30, 2026. The rate used in determining the present value of lease payments is based upon an estimate of the Company’s incremental secured borrowing rate commensurate with the term of the underlying lease.

These leases are accounted for as operating leases, whereby lease expense is recognized on a straight-line basis over the term of the lease. Lease expense reported for the six months ended June 30, 2019 was $507. See the “Adoption of New Accounting Standards – Leases” section of Note 2 of Notes to Condensed Consolidated Financial Statements for additional information regarding the accounting for leases.

Additional information regarding the Company’s real estate operating leases is as follows:

	Six Months Ended June 30,
	2019
Other information on operating leases:
Cash payments included in the measurement of lease liabilities reported in operating cash flows	$	450
Right-of-use assets included in other assets on the condensed consolidated balance sheet		5,785
Weighted average discount rate		6.8	%
Weighted average remaining lease term in years	7.4 years

The following table presents maturities and present value of the Company’s lease liabilities:

	Lease Liability
Remainder of 2019	$	365
2020		978
2021		1,015
2022		1,031
2023		1,048
Thereafter		3,091
Total undiscounted lease payments		7,528
Less: present value adjustment		1,685
Operating lease liability included in other liabilities on the condensed consolidated balance sheet	$	5,843

As of June 30, 2019, the Company has no operating leases that have not yet commenced.

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 10. Commitments and Contingencies

From time to time, the Company is, and expects to continue to be, involved in various claims and lawsuits incidental to and in the ordinary course of its businesses. In the opinion of management, any such known claims are not expected to have a material effect on the financial condition or results of operations of the Company.

XML

Segment Information

6 Months Ended

Jun. 30, 2019

Segment Information [Abstract]

Segment Information

Note 11. Segment Information

The Parent’s primary insurance subsidiaries, American Southern and Bankers Fidelity, operate in two principal business units, each focusing on specific products. American Southern operates in the property and casualty insurance market, while Bankers Fidelity operates in the life and health insurance market. Each business unit is managed independently and is evaluated on its individual performance. The following sets forth the assets, revenue and income (loss) before income taxes for each business unit as of and for the periods ended 2019 and 2018.

Assets	June 30, 2019			December 31, 2018
American Southern	$	142,059		$	122,724
Bankers Fidelity		206,513			195,663
Corporate and Other		148,424			134,643
Adjustments & Eliminations		(125,266	)		(108,756	)
Total assets	$	371,730		$	344,274

Revenues	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
American Southern	$	15,740		$	14,643		$	30,975		$	28,176
Bankers Fidelity		31,244			31,641			65,620			61,754
Corporate and Other		(1,261	)		5,939			6,617			5,419
Adjustments & Eliminations		(2,596	)		(2,780	)		(5,067	)		(5,366	)
Total revenue	$	43,127		$	49,443		$	98,145		$	89,983

Income (Loss) Before Income Taxes	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019			2018
American Southern	$	1,396		$	1,929	$	3,378		$	2,897
Bankers Fidelity		(1,998	)		261		(2,494	)		(2,274	)
Corporate and Other		(4,987	)		1,843		(1,188	)		(2,941	)
Income (loss) before income taxes	$	(5,589	)	$	4,033	$	(304	)	$	(2,318	)

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Note 12. Related Party Transactions

During the three month period ended June 30, 2019, the Company transferred its remaining fractional interest in an aircraft arrangement to Gray Television, Inc., a related party, for $151.

XML

Recently Issued Accounting Standards (Policies)

6 Months Ended

Jun. 30, 2019

Recently Issued Accounting Standards [Abstract]

Adoption of New Accounting Standards

Adoption of New Accounting Standards

Leases. On January 1, 2019, the Company adopted the requirements of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The objective of this ASU, along with several related ASUs issued subsequently, is to increase transparency and comparability between organizations that enter into lease agreements. For lessees, the key difference of the new standard from the previous guidance (Topic 840) is the recognition of a right-of-use (“ROU”) asset and lease liability on the balance sheet. The most significant change is the requirement to recognize ROU assets and lease liabilities for leases classified as operating leases. The new standard requires disclosures to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

As part of the transition to the new standard, the Company was required to measure and recognize leases that existed at January 1, 2019 and elected to use a modified retrospective approach. For leases that existed at the effective date, the Company elected the package of three transition practical expedients and therefore did not reassess any of the following: (i) whether an arrangement is or contains a lease, (ii) lease classification, or (iii) what qualifies as an initial direct cost.

The adoption of this ASU resulted in the Company recognizing a ROU asset of $6,088 as part of other assets and a lease liability of $6,088 as part of other liabilities in the consolidated balance sheet. The adoption of this ASU did not have a material effect on the Company’s results of operations or liquidity.

Revenue from Contracts with Customers. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09, as modified, provides guidance for recognizing revenue which excludes insurance contracts and financial instruments. Revenue is to be recognized when, or as, goods or services are transferred to customers in an amount that reflects the consideration that an entity is expected to be entitled in exchange for those goods or services. For the six months ended June 30, 2019 and 2018, approximately $100 and $57, respectively, or approximately one-tenth of 1% of the Company’s total revenues, were within the scope of this updated guidance. The Company adopted ASU 2014-09 as of January 1, 2018. The adoption of this ASU did not have an impact on the Company’s consolidated financial statements.

Future Adoption of New Accounting Standards

For information regarding accounting standards that the Company has not yet adopted, see the “Recently Issued Accounting Standards - Future Adoption of New Accounting Standards” section of Note 1 of Notes to Consolidated Financial Statements in the 2018 Annual Report.

XML

Investments (Tables)

6 Months Ended

Jun. 30, 2019

Investments [Abstract]

Investments Aggregated by Type and Industry

The following tables set forth the estimated fair value, gross unrealized gains, gross unrealized losses and cost or amortized cost of the Company’s investments in fixed maturities and equity securities, aggregated by type and industry, as of June 30, 2019 and December 31, 2018.

Fixed maturities were comprised of the following:

	June 30, 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	$	27,929	$	560	$	329	$	27,698
Obligations of states and political subdivisions		4,999		420		-		4,579
Corporate securities:
Utilities and telecom		17,482		1,654		-		15,828
Financial services		61,103		2,506		474		59,071
Other business – diversified		43,516		1,667		658		42,507
Other consumer – diversified		68,054		1,889		1,251		67,416
Total corporate securities		190,155		7,716		2,383		184,822
Redeemable preferred stocks:
Other consumer – diversified		192		—		—		192
Total redeemable preferred stocks		192		—		—		192
Total fixed maturities	$	223,275	$	8,696	$	2,712	$	217,291

	December 31, 2018
	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	$	27,422	$	36	$	1,061	$	28,447
Obligations of states and political subdivisions		8,364		347		72		8,089
Corporate securities:
Utilities and telecom		19,642		873		431		19,200
Financial services		49,477		747		2,942		51,672
Other business – diversified		49,196		226		2,844		51,814
Other consumer – diversified		56,093		84		4,501		60,510
Total corporate securities		174,408		1,930		10,718		183,196
Redeemable preferred stocks:
Other consumer – diversified		192		—		—		192
Total redeemable preferred stocks		192		—		—		192
Total fixed maturities	$	210,386	$	2,313	$	11,851	$	219,924

Bonds having an amortized cost of $10,444 and $10,452 and included in the tables above were on deposit with insurance regulatory authorities as of June 30, 2019 and December 31, 2018, respectively, in accordance with statutory requirements.

Equity securities were comprised of the following:

	June 30, 2019
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost or Amortized Cost
Equity securities:
Common and non-redeemable preferred stocks:
Financial services	$	4,799	$	419	$	—	$	4,380
Other business – diversified		318		271		—		47
Other consumer – diversified		15,338		10,705		—		4,633
Total equity securities	$	20,455	$	11,395	$	—	$	9,060

	December 31, 2018
	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost or Amortized Cost
Equity securities:
Common and non-redeemable preferred stocks:
Utilities and telecom	$	1,686	$	722	$	—	$	964
Financial services		4,552		172		—		4,380
Other business – diversified		306		259		—		47
Other consumer – diversified		14,214		9,090		—		5,124
Total equity securities	$	20,758	$	10,243	$	—	$	10,515

Amortized Cost and Carrying Value of Fixed Maturities by Contractual Maturity

The carrying value and amortized cost of the Company’s investments in fixed maturities at June 30, 2019 and December 31, 2018 by contractual maturity were as follows. Actual maturities may differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.

	June 30, 2019				December 31, 2018
	Carrying Value		Amortized Cost		Carrying Value		Amortized Cost
Due in one year or less	$	-	$	-	$	3,150	$	3,150
Due after one year through five years		16,262		16,345		19,787		19,699
Due after five years through ten years		93,243		91,052		127,617		133,863
Due after ten years		97,444		93,488		43,823		46,338
Asset backed securities		16,326		16,406		16,009		16,874
Totals	$	223,275	$	217,291	$	210,386	$	219,924

Investment Securities with Continuous Unrealized Loss Position

The following tables present the Company’s unrealized losses for securities by type and length of time the security was in a continuous unrealized loss position as of June 30, 2019 and December 31, 2018.

	June 30, 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		$	—		$	—		$	10,865		$	329		$	10,865		$	329
Corporate securities			2,051			5			32,070			2,378			34,121			2,383
Total temporarily impaired securities		$	2,051		$	5		$	42,935		$	2,707		$	44,986		$	2,712

	December 31, 2018
	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		$	—		$	—		$	24,786		$	1,061		$	24,786		$	1,061
Obligations of states and political subdivisions			—			—			3,980			72			3,980			72
Corporate securities			49,633			1,592			97,012			9,126			146,645			10,718
Total temporarily impaired securities		$	49,633		$	1,592		$	125,778		$	10,259		$	175,411		$	11,851

Summary of Realized Investment Gains (Losses)

The following table is a summary of realized investment gains (losses) for the three month and six month periods ended June 30, 2019 and 2018.

	Three Months Ended June 30, 2019
	Fixed Maturities			Equity Securities			Other Invested Assets			Total
Gains		$	610		$	—		$	—		$	610
Losses			—			—			—			—
Realized investment gains (losses), net		$	610		$	—		$	—		$	610

	Three Months Ended June 30, 2018
	Fixed Maturities				Equity Securities			Other Invested Assets			Total
Gains		$	247			$	—		$	—		$	247
Losses			(304	)			—			—			(304	)
Realized investment gains (losses), net		$	(57	)		$	—		$	—		$	(57	)

	Six Months Ended June 30, 2019
	Fixed Maturities			Equity Securities			Other Invested Assets			Total
Gains		$	882		$	1,113		$	—		$	1,995
Losses			—			—			—			—
Realized investment gains (losses), net		$	882		$	1,113		$	—		$	1,995

	Six Months Ended June 30, 2018
	Fixed Maturities				Equity Securities			Other Invested Assets			Total
Gains		$	617			$	—		$	—		$	617
Losses			(304	)			—			—			(304	)
Realized investment gains (losses), net		$	313			$	—		$	—		$	313

Unrealized Gains (Losses) Related to Equity Securities

The following table presents the portion of unrealized gains (losses) related to equity securities still held for the three month and six month periods ended June 30, 2019 and 2018.

	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019		2018
Net gains (losses) recognized during the period on equity securities	$	(5,337	)	$	4,089	$	2,265	$	(330	)
Less: Net 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 still held at the reporting date	$	(5,337	)	$	4,089	$	1,152	$	(330	)

XML

Fair Values of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Fair Values of Financial Instruments [Abstract]

Financial Instruments Carried at Fair Value Measured on a Recurring Basis

As of June 30, 2019, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	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	$	11,603	$	210,498		$	1,174	(1)	$	223,275
Equity securities		15,855		4,600	(1)		—			20,455
Cash equivalents		6,925		—			—			6,925
Total	$	34,383	$	215,098		$	1,174		$	250,655

⁽¹⁾ All underlying securities are financial services industry related.

As of December 31, 2018, financial instruments carried at fair value were measured on a recurring basis as summarized below:

	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	$	11,413	$	197,907		$	1,066	(1)	$	210,386
Equity securities		16,398		4,360	(1)		—			20,758
Cash equivalents		8,250		—			—			8,250
Total	$	36,061	$	202,267		$	1,066		$	239,394

⁽¹⁾ All underlying securities are financial services industry related.

Roll-forward of Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The following tables provide a roll-forward of the Company’s financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three month and six month periods ended June 30, 2019 and 2018.

	Fixed Maturities
Balance, December 31, 2018	$	1,066
Total unrealized gains included in other comprehensive loss		49
Balance, March 31, 2019		1,115
Total unrealized gains included in other comprehensive income		59
Balance, June 30, 2019	$	1,174

	Fixed Maturities
Balance, December 31, 2017	$	1,369
Total unrealized losses included in other comprehensive loss		(30	)
Balance, March 31, 2018		1,339
Total unrealized gains included in other comprehensive loss		7
Balance, June 30, 2018	$	1,346

Carrying Amount, Estimated Fair Value and Level within the Fair Value Hierarchy of Financial Instruments

The following table sets forth the carrying amount, estimated fair value and level within the fair value hierarchy of the Company’s financial instruments as of June 30, 2019 and December 31, 2018.

			June 30, 2019				December 31, 2018
	Level in Fair Value Hierarchy (1)		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Cash and cash equivalents	Level 1		$	11,450	$	11,450	$	12,630	$	12,630
Fixed maturities	(1	)		223,275		223,275		210,386		210,386
Equity securities	(1	)		20,455		20,455		20,758		20,758
Other invested assets	Level 3			7,380		7,380		7,424		7,424
Policy loans	Level 2			2,007		2,007		2,085		2,085
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		33,738		33,738		33,738

⁽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.

XML

Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses (Tables)

6 Months Ended

Jun. 30, 2019

Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses [Abstract]

Roll-forward of Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses

The roll-forward of liabilities for unpaid losses, claims and loss adjustment expenses is as follows:

	Six Months Ended June 30,
	2019			2018
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	72,612		$	65,689
Less: Reinsurance recoverable on unpaid losses		(14,354	)		(11,968	)
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net		58,258			53,721
Incurred related to:
Current accident year		68,157			63,230
Prior accident year development		103			(163	)
Total incurred		68,260			63,067
Paid related to:
Current accident year		38,875			36,508
Prior accident years		28,576			22,872
Total paid		67,451			59,380
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net		59,067			57,408
Plus: Reinsurance recoverable on unpaid losses		16,088			14,667
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	75,155		$	72,075

Reconciliation of Total Incurred Losses to Total Insurance Benefits and Losses

Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred:

	Six Months Ended June 30,
	2019		2018
Total incurred losses	$	68,260	$	63,067
Cash surrender value and matured endowments		588		707
Benefit reserve changes		610		1,617
Total insurance benefits and losses incurred	$	69,458	$	65,391

XML

Junior Subordinated Debentures (Tables)

6 Months Ended

Jun. 30, 2019

Junior Subordinated Debentures [Abstract]

Financial Structure of Statutory Business Trusts

The financial structure of each of Atlantic American Statutory Trust I and II as of June 30, 2019 was as follows:

	Atlantic American Statutory Trust I			Atlantic American Statutory Trust II
JUNIOR SUBORDINATED DEBENTURES (1) (2)
Principal amount owed June 30, 2019	$	18,042		$	23,196
Less: Treasury debt (3)		—			(7,500	)
Net balance June 30, 2019	$	18,042		$	15,696
Net balance December 31, 2018	$	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.

XML

Earnings (Loss) Per Common Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings (Loss) Per Common Share [Abstract]

Reconciliation of Numerator and Denominator used in Earnings (Loss) per Common Share Calculations

A reconciliation of the numerator and denominator used in the loss per common share calculations is as follows:

	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	)

	Three Months Ended June 30, 2018
	Income			Weighted Average Shares (In thousands)		Per Share Amount
Basic Earnings Per Common Share:
Net income	$	3,185			20,286
Less preferred stock dividends		(100	)
Net income applicable to common shareholders		3,085			20,286	$	.15
Diluted Earnings Per Common Share:
Effect of Series D preferred stock		100			1,378
Net income applicable to common shareholders	$	3,185			21,664	$	.15

	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	)

	Six Months Ended June 30, 2018
	Loss			Weighted Average Shares (In thousands)		Per Share Amount
Basic and Diluted Loss Per Common Share:
Net loss	$	(1,839	)		20,352
Less preferred stock dividends		(199	)		—
Net loss applicable to common shareholders	$	(2,038	)		20,352	$	(.10	)

XML

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2019

Income Taxes [Abstract]

Reconciliation of Income Tax Expense (Benefit)

A reconciliation of the differences between income taxes computed at the federal statutory income tax rate and income tax benefit is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Federal income tax provision at statutory rate of 21%	$	(1,174	)	$	847		$	(64	)	$	(487	)
Dividends-received deduction		(5	)		(10	)		(14	)		(20	)
Other permanent differences		16			11			38			28
Income tax expense (benefit)	$	(1,163	)	$	848		$	(40	)	$	(479	)

Components of Income Tax Expense (Benefit)

The components of income tax benefit were:

	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019			2018
Current - Federal	$	572		$	703	$	572		$	739
Deferred - Federal		(1,735	)		145		(612	)		(1,218	)
Total	$	(1,163	)	$	848	$	(40	)	$	(479	)

XML

Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Additional Information of Operating Leases

Additional information regarding the Company’s real estate operating leases is as follows:

	Six Months Ended June 30,
	2019
Other information on operating leases:
Cash payments included in the measurement of lease liabilities reported in operating cash flows	$	450
Right-of-use assets included in other assets on the condensed consolidated balance sheet		5,785
Weighted average discount rate		6.8	%
Weighted average remaining lease term in years	7.4 years

Maturities and Present Value of Lease Liabilities

The following table presents maturities and present value of the Company’s lease liabilities:

	Lease Liability
Remainder of 2019	$	365
2020		978
2021		1,015
2022		1,031
2023		1,048
Thereafter		3,091
Total undiscounted lease payments		7,528
Less: present value adjustment		1,685
Operating lease liability included in other liabilities on the condensed consolidated balance sheet	$	5,843

XML

Segment Information (Tables)

6 Months Ended

Jun. 30, 2019

Segment Information [Abstract]

Assets, Revenue and Income (Loss) Before Income Taxes for Each Business Unit

The following sets forth the assets, revenue and income (loss) before income taxes for each business unit as of and for the periods ended 2019 and 2018.

Assets	June 30, 2019			December 31, 2018
American Southern	$	142,059		$	122,724
Bankers Fidelity		206,513			195,663
Corporate and Other		148,424			134,643
Adjustments & Eliminations		(125,266	)		(108,756	)
Total assets	$	371,730		$	344,274

Revenues	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
American Southern	$	15,740		$	14,643		$	30,975		$	28,176
Bankers Fidelity		31,244			31,641			65,620			61,754
Corporate and Other		(1,261	)		5,939			6,617			5,419
Adjustments & Eliminations		(2,596	)		(2,780	)		(5,067	)		(5,366	)
Total revenue	$	43,127		$	49,443		$	98,145		$	89,983

Income (Loss) Before Income Taxes	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019			2018
American Southern	$	1,396		$	1,929	$	3,378		$	2,897
Bankers Fidelity		(1,998	)		261		(2,494	)		(2,274	)
Corporate and Other		(4,987	)		1,843		(1,188	)		(2,941	)
Income (loss) before income taxes	$	(5,589	)	$	4,033	$	(304	)	$	(2,318	)

XML

Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2019 Segment
Basis of Presentation [Abstract]
Number of business units	2

XML

Recently Issued Accounting Standards (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Adoption of New Accounting Pronouncements [Abstract]
Right-of-use asset	$ 5,785		$ 5,785
Lease liability	5,843		5,843
Revenues within scope of updated accounting guidance	$ 43,127	$ 49,443	98,145	$ 89,983
ASU 2014-09 [Member]
Adoption of New Accounting Pronouncements [Abstract]
Revenues within scope of updated accounting guidance			$ 100	$ 57
Revenues within scope of updated accounting guidance, as a percentage of total revenues (less than)			0.10%	0.10%
ASU 2016-02 [Member] | Other Assets [Member]
Adoption of New Accounting Pronouncements [Abstract]
Right-of-use asset					$ 6,088
ASU 2016-02 [Member] | Other Liabilities [Member]
Adoption of New Accounting Pronouncements [Abstract]
Lease liability					$ 6,088

XML

Investments, Aggregated by Type and Industry (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) Securities	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) Securities	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($) Securities
Investments aggregated by type and industry [Abstract]
Estimated fair value	$ 223,275		$ 223,275		$ 210,386
Gross unrealized gains	8,696		8,696		2,313
Gross unrealized losses	2,712		2,712		11,851
Amortized cost	217,291		217,291		219,924
Estimated fair value	20,455		20,455		20,758
Gross unrealized gains	11,395		11,395		10,243
Gross unrealized losses	0		0		0
Cost	9,060		9,060		10,515
Amortized cost of bonds on deposit with insurance regulatory authorities	10,444		10,444		$ 10,452
Gross OTTI losses charged to realized gains	$ 0	$ 0	$ 0	$ 0
Number of securities in unrealized loss position | Securities	33		33		140
Fixed Maturities [Member] | U.S. Treasury Securities and Obligations of U.S. Government Agencies and Authorities [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	$ 27,929		$ 27,929		$ 27,422
Gross unrealized gains	560		560		36
Gross unrealized losses	329		329		1,061
Amortized cost	27,698		27,698		28,447
Fixed Maturities [Member] | Obligations of States and Political Subdivisions [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	4,999		4,999		8,364
Gross unrealized gains	420		420		347
Gross unrealized losses	0		0		72
Amortized cost	4,579		4,579		8,089
Fixed Maturities [Member] | Corporate Securities [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	190,155		190,155		174,408
Gross unrealized gains	7,716		7,716		1,930
Gross unrealized losses	2,383		2,383		10,718
Amortized cost	184,822		184,822		183,196
Fixed Maturities [Member] | Corporate Securities [Member] | Utilities and Telecom [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	17,482		17,482		19,642
Gross unrealized gains	1,654		1,654		873
Gross unrealized losses	0		0		431
Amortized cost	15,828		15,828		19,200
Fixed Maturities [Member] | Corporate Securities [Member] | Financial Services [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	61,103		61,103		49,477
Gross unrealized gains	2,506		2,506		747
Gross unrealized losses	474		474		2,942
Amortized cost	59,071		59,071		51,672
Fixed Maturities [Member] | Corporate Securities [Member] | Other Business - Diversified [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	43,516		43,516		49,196
Gross unrealized gains	1,667		1,667		226
Gross unrealized losses	658		658		2,844
Amortized cost	42,507		42,507		51,814
Fixed Maturities [Member] | Corporate Securities [Member] | Other Consumer - Diversified [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	68,054		68,054		56,093
Gross unrealized gains	1,889		1,889		84
Gross unrealized losses	1,251		1,251		4,501
Amortized cost	67,416		67,416		60,510
Fixed Maturities [Member] | Redeemable Preferred Stocks [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	192		192		192
Gross unrealized gains	0		0		0
Gross unrealized losses	0		0		0
Amortized cost	192		192		192
Fixed Maturities [Member] | Redeemable Preferred Stocks [Member] | Other Consumer - Diversified [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	192		192		192
Gross unrealized gains	0		0		0
Gross unrealized losses	0		0		0
Amortized cost	192		192		192
Equity Securities [Member] | Common and Non-redeemable Preferred Stocks [Member] | Utilities and Telecom [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value					1,686
Gross unrealized gains					722
Gross unrealized losses					0
Cost					964
Equity Securities [Member] | Common and Non-redeemable Preferred Stocks [Member] | Financial Services [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	4,799		4,799		4,552
Gross unrealized gains	419		419		172
Gross unrealized losses	0		0		0
Cost	4,380		4,380		4,380
Equity Securities [Member] | Common and Non-redeemable Preferred Stocks [Member] | Other Business - Diversified [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	318		318		306
Gross unrealized gains	271		271		259
Gross unrealized losses	0		0		0
Cost	47		47		47
Equity Securities [Member] | Common and Non-redeemable Preferred Stocks [Member] | Other Consumer - Diversified [Member]
Investments aggregated by type and industry [Abstract]
Estimated fair value	15,338		15,338		14,214
Gross unrealized gains	10,705		10,705		9,090
Gross unrealized losses	0		0		0
Cost	$ 4,633		$ 4,633		$ 5,124

XML

Investments, Fixed Maturities by Contractual Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Carrying Value [Abstract]
Due in one year or less	$ 0	$ 3,150
Due after one year through five years	16,262	19,787
Due after five years through ten years	93,243	127,617
Due after ten years	97,444	43,823
Asset backed securities	16,326	16,009
Totals	223,275	210,386
Amortized Cost [Abstract]
Due in one year or less	0	3,150
Due after one year through five years	16,345	19,699
Due after five years through ten years	91,052	133,863
Due after ten years	93,488	46,338
Asset backed securities	16,406	16,874
Amortized cost	$ 217,291	$ 219,924

XML

Investments, Securities with Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract]
Less than 12 months	$ 2,051	$ 49,633
12 months or longer	42,935	125,778
Total	44,986	175,411
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	5	1,592
12 months or longer	2,707	10,259
Total	2,712	11,851
U.S. Treasury Securities and Obligations of U.S. Government Agencies and Authorities [Member]
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract]
Less than 12 months	0	0
12 months or longer	10,865	24,786
Total	10,865	24,786
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	0	0
12 months or longer	329	1,061
Total	329	1,061
Obligations of States and Political Subdivisions [Member]
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract]
Less than 12 months		0
12 months or longer		3,980
Total		3,980
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months		0
12 months or longer		72
Total		72
Corporate Securities [Member]
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract]
Less than 12 months	2,051	49,633
12 months or longer	32,070	97,012
Total	34,121	146,645
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months	5	1,592
12 months or longer	2,378	9,126
Total	$ 2,383	$ 10,718

XML

Investments, Summary of Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Summary of realized investment gains (losses) [Abstract]
Gains	$ 610	$ 247	$ 1,995	$ 617
Losses	0	(304)	0	(304)
Realized investment gains (losses), net	610	(57)	1,995	313
Fixed Maturities [Member]
Summary of realized investment gains (losses) [Abstract]
Gains	610	247	882	617
Losses	0	(304)	0	(304)
Realized investment gains (losses), net	610	(57)	882	313
Equity Securities [Member]
Summary of realized investment gains (losses) [Abstract]
Gains	0	0	1,113	0
Losses	0	0	0	0
Realized investment gains (losses), net	0	0	1,113	0
Other Invested Assets [Member]
Summary of realized investment gains (losses) [Abstract]
Gains	0	0	0	0
Losses	0	0	0	0
Realized investment gains (losses), net	$ 0	$ 0	$ 0	$ 0

XML

Investments, Unrealized Gains (Losses) Related to Equity Securities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Investments [Abstract]
Net gains (losses) recognized during the period on equity securities	$ (5,337)	$ 4,089	$ 2,265	$ (330)
Less: Net gains (losses) recognized during the period on equity securities sold during the period	0	0	1,113	0
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$ (5,337)	$ 4,089	$ 1,152	$ (330)

XML

Investments, Variable Interest Entities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Variable Interest Entities [Abstract]
Investment in unconsolidated trusts	$ 1,238	$ 1,238
VIE, Not Primary Beneficiary [Member] | Other Invested Assets [Member]
Variable Interest Entities [Abstract]
Carrying amount of interest	7,380	7,424
Investment in unconsolidated trusts	1,238	1,238
Maximum loss exposure	8,618	8,662
Outstanding commitments	$ 4,900	$ 0

XML

Fair Values of Financial Instruments, Measured on a Recurring Basis (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Financial instruments carried at fair value measured on a recurring basis [Abstract]
Fixed maturities		$ 223,275	$ 210,386
Equity securities		20,455	20,758
Recurring [Member]
Financial instruments carried at fair value measured on a recurring basis [Abstract]
Fixed maturities		223,275	210,386
Equity securities		20,455	20,758
Cash equivalents		6,925	8,250
Assets at fair value		250,655	239,394
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Financial instruments carried at fair value measured on a recurring basis [Abstract]
Fixed maturities		11,603	11,413
Equity securities		15,855	16,398
Cash equivalents		6,925	8,250
Assets at fair value		34,383	36,061
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]
Financial instruments carried at fair value measured on a recurring basis [Abstract]
Fixed maturities		210,498	197,907
Equity securities	[1]	4,600	4,360
Cash equivalents		0	0
Assets at fair value		215,098	202,267
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Financial instruments carried at fair value measured on a recurring basis [Abstract]
Fixed maturities	[1]	1,174	1,066
Equity securities		0	0
Cash equivalents		0	0
Assets at fair value		$ 1,174	$ 1,066

[1] All underlying securities are financial services industry related.

XML

Fair Values of Financial Instruments, Roll-forward of Financial Instruments Measured at Fair Value (Details) - Fixed Maturities [Member] - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018
Assets measured at fair value on a recurring basis [Abstract]
Balance, beginning of period	$ 1,115	$ 1,066	$ 1,339	$ 1,369
Total unrealized gains (losses) included in other comprehensive income (loss)	59	49	7	(30)
Balance, end of period	$ 1,174	$ 1,115	$ 1,346	$ 1,339

XML

Fair Values of Financial Instruments, Estimated Fair Value and Level (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Assets [Abstract]
Fixed maturities		$ 223,275	$ 210,386
Equity securities		20,455	20,758
Carrying Amount [Member]
Assets [Abstract]
Fixed maturities	[1]	223,275	210,386
Equity securities	[1]	20,455	20,758
Carrying Amount [Member] | Level 1 [Member]
Assets [Abstract]
Cash and cash equivalents		11,450	12,630
Carrying Amount [Member] | Level 2 [Member]
Assets [Abstract]
Policy loans		2,007	2,085
Real estate		38	38
Investment in unconsolidated trusts		1,238	1,238
Liabilities [Abstract]
Junior subordinated debentures, net		33,738	33,738
Carrying Amount [Member] | Level 3 [Member]
Assets [Abstract]
Other invested assets		7,380	7,424
Estimated Fair Value [Member]
Assets [Abstract]
Fixed maturities	[1]	223,275	210,386
Equity securities	[1]	20,455	20,758
Estimated Fair Value [Member] | Level 1 [Member]
Assets [Abstract]
Cash and cash equivalents		11,450	12,630
Estimated Fair Value [Member] | Level 2 [Member]
Assets [Abstract]
Policy loans		2,007	2,085
Real estate		38	38
Investment in unconsolidated trusts		1,238	1,238
Liabilities [Abstract]
Junior subordinated debentures, net		33,738	33,738
Estimated Fair Value [Member] | Level 3 [Member]
Assets [Abstract]
Other invested assets		$ 7,380	$ 7,424

[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.

XML

Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses [Roll Forward]
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross			$ 72,612	$ 65,689
Less: Reinsurance recoverable on unpaid losses			(14,354)	(11,968)
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net			58,258	53,721
Incurred related to [Abstract]
Current accident year			68,157	63,230
Prior accident year development			103	(163)
Total incurred			68,260	63,067
Paid related to [Abstract]
Current accident year			38,875	36,508
Prior accident years			28,576	22,872
Total paid			67,451	59,380
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net	$ 59,067	$ 57,408	59,067	57,408
Plus: Reinsurance recoverable on unpaid losses	16,088	14,667	16,088	14,667
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross	75,155	72,075	75,155	72,075
Reconciliation of total incurred claims to total insurance benefits and losses incurred [Abstract]
Total incurred losses			68,260	63,067
Cash surrender value and matured endowments			588	707
Benefit reserve changes			610	1,617
Total insurance benefits and losses incurred	$ 34,151	$ 32,219	$ 69,458	$ 65,391

XML

Junior Subordinated Debentures (Details) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($) Trust Quarter $ / shares shares
Debt Instruments [Abstract]
Number of Connecticut statutory business trusts | Trust	2
Financial structure of statutory business trusts [Abstract]
Net balance June 30, 2019	$ 33,738
Net balance December 31, 2018	$ 33,738
Junior Subordinated Debentures [Member]
Financial structure of statutory business trusts [Abstract]
Number of consecutive quarters for which interest payments can be deferred | Quarter	20
Atlantic American Statutory Trust I [Member] | Junior Subordinated Debentures [Member]
Financial structure of statutory business trusts [Abstract]
Principal amount owed June 30, 2019	$ 18,042	[1],[2]
Less: Treasury debt	0	[1],[2],[3]
Net balance June 30, 2019	18,042	[1],[2]
Net balance December 31, 2018	$ 18,042	[1],[2]
Coupon rate	LIBOR + 4.00%	[1],[2]
Interest payable	Quarterly	[1],[2]
Maturity date	Dec. 04, 2032	[1],[2]
Redeemable by issuer	Yes	[1],[2]
Atlantic American Statutory Trust I [Member] | Junior Subordinated Debentures [Member] | LIBOR [Member]
Financial structure of statutory business trusts [Abstract]
Basis spread on variable rate	4.00%
Atlantic American Statutory Trust I [Member] | Trust Preferred Securities [Member]
Financial structure of statutory business trusts [Abstract]
Coupon rate	LIBOR + 4.00%
Issuance date	Dec. 04, 2002
Securities issued (in shares) | shares	17,500
Liquidation preference per security (in dollars per share) | $ / shares	$ 1
Liquidation value	$ 17,500
Distribution payable	Quarterly
Distribution guaranteed by	Atlantic American Corporation	[4]
Atlantic American Statutory Trust I [Member] | Trust Preferred Securities [Member] | LIBOR [Member]
Financial structure of statutory business trusts [Abstract]
Basis spread on variable rate	4.00%
Atlantic American Statutory Trust II [Member] | Junior Subordinated Debentures [Member]
Financial structure of statutory business trusts [Abstract]
Principal amount owed June 30, 2019	$ 23,196	[1],[2]
Less: Treasury debt	(7,500)	[1],[2],[3]
Net balance June 30, 2019	15,696	[1],[2]
Net balance December 31, 2018	$ 15,696	[1],[2]
Coupon rate	LIBOR + 4.10%	[1],[2]
Interest payable	Quarterly	[1],[2]
Maturity date	May 15, 2033	[1],[2]
Redeemable by issuer	Yes	[1],[2]
Atlantic American Statutory Trust II [Member] | Junior Subordinated Debentures [Member] | LIBOR [Member]
Financial structure of statutory business trusts [Abstract]
Basis spread on variable rate	4.10%
Atlantic American Statutory Trust II [Member] | Trust Preferred Securities [Member]
Financial structure of statutory business trusts [Abstract]
Coupon rate	LIBOR + 4.10%
Issuance date	May 15, 2003
Securities issued (in shares) | shares	22,500
Liquidation preference per security (in dollars per share) | $ / shares	$ 1
Liquidation value	$ 22,500
Distribution payable	Quarterly
Distribution guaranteed by	Atlantic American Corporation	[4]
Atlantic American Statutory Trust II [Member] | Trust Preferred Securities [Member] | LIBOR [Member]
Financial structure of statutory business trusts [Abstract]
Basis spread on variable rate	4.10%

[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.

XML

Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income (Loss) [Abstract]
Net income (loss)	$ (4,426)	$ 3,185	$ (264)	$ (1,839)
Less: preferred stock dividends	(100)	(100)	(199)	(199)
Net income (loss) applicable to common shareholders	$ (4,526)	3,085	$ (463)	$ (2,038)
Diluted Earnings Per Common Share [Abstract]
Net income applicable to common shareholders		$ 3,185
Shares [Abstract]
Weighted average shares outstanding, Basic (in shares)	20,146	20,286	20,152	20,352
Weighted average shares outstanding, Diluted (in shares)		21,664
Per Share Amount [Abstract]
Net income (loss) applicable to common shareholders, Basic (in dollars per share)	$ (0.22)	$ 0.15	$ (0.02)	$ (0.10)
Net income (loss) applicable to common shareholders, Diluted (in dollars per share)	(0.22)	$ 0.15	(0.02)	(0.10)
Net income (loss) applicable to common shareholders, Basic and Diluted (in dollars per share)	$ (0.22)		$ (0.02)	$ (0.10)
Series D Preferred Stock [Member]
Diluted Earnings Per Common Share [Abstract]
Effect of Series D preferred stock		$ 100
Shares [Abstract]
Effect of Series D preferred stock (in shares)		1,378

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Reconciliation of income tax expense (benefit) [Abstract]
Federal income tax provision at statutory rate of 21%	$ (1,174)	$ 847	$ (64)	$ (487)
Dividends-received deduction	(5)	(10)	(14)	(20)
Other permanent differences	16	11	38	28
Income tax expense (benefit)	(1,163)	848	$ (40)	(479)
Federal statutory income tax rate			21.00%
Components of income tax expense (benefit) [Abstract]
Current - Federal	572	703	$ 572	739
Deferred - Federal	(1,735)	145	(612)	(1,218)
Income tax expense (benefit)	$ (1,163)	$ 848	$ (40)	$ (479)

XML

Leases (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($) Lease
Lease description [Abstract]
Number of operating lease agreements | Lease	2
Lease expense	$ 507
Other information on operating leases [Abstract]
Cash payments included in the measurement of lease liabilities reported in operating cash flows	450
Right-of-use assets included in other assets on balance sheet	$ 5,785
Weighted average discount rate	6.80%
Weighted average remaining lease term in years	7 years 4 months 24 days
Maturities and present value of lease liabilities [Abstract]
Remainder of 2019	$ 365
2020	978
2021	1,015
2022	1,031
2023	1,048
Thereafter	3,091
Total undiscounted lease payments	7,528
Less: present value adjustment	1,685
Operating lease liability	$ 5,843
First Lease [Member]
Lease description [Abstract]
Renewal option period	8 years
Second Lease [Member]
Lease description [Abstract]
Renewal option period	7 years
Lease term	10 years

XML

Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) Segment	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Segment Information [Abstract]
Number of business units | Segment			2
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract]
Assets	$ 371,730		$ 371,730		$ 344,274
Revenue	43,127	$ 49,443	98,145	$ 89,983
Income (loss) before income taxes	(5,589)	4,033	(304)	(2,318)
Operating Segments [Member] | American Southern [Member]
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract]
Assets	142,059		142,059		122,724
Revenue	15,740	14,643	30,975	28,176
Income (loss) before income taxes	1,396	1,929	3,378	2,897
Operating Segments [Member] | Bankers Fidelity [Member]
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract]
Assets	206,513		206,513		195,663
Revenue	31,244	31,641	65,620	61,754
Income (loss) before income taxes	(1,998)	261	(2,494)	(2,274)
Corporate and Other [Member]
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract]
Assets	148,424		148,424		134,643
Revenue	(1,261)	5,939	6,617	5,419
Income (loss) before income taxes	(4,987)	1,843	(1,188)	(2,941)
Adjustments & Eliminations [Member]
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract]
Assets	(125,266)		(125,266)		$ (108,756)
Revenue	$ (2,596)	$ (2,780)	$ (5,067)	$ (5,366)

XML

Related Party Transactions (Details) $ in Thousands	3 Months Ended
	Jun. 30, 2019 USD ($)
Gray Television, Inc [Member]
Related Party Transaction [Abstract]
Interest in aircraft arrangement sold to related party	$ 151