QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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2
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||
Part I.
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Financial Information
|
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Item 1.
|
3
|
|
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
Item 2.
|
19
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Item 4.
|
25
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Part II.
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Other Information
|
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Item 2.
|
26
|
|
Item 6.
|
26
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|
27
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Unaudited
June 30,
2022
|
December 31,
2021
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Investments:
|
||||||||
Fixed maturities, available-for-sale, at fair value (amortized cost: $
|
|
|
||||||
Equity securities, at fair value (cost: $
|
|
|
||||||
Other invested assets (cost: $
|
|
|
||||||
Policy loans
|
|
|
||||||
Real estate
|
|
|
||||||
Investment in unconsolidated trusts
|
|
|
||||||
Total investments
|
|
|
||||||
Receivables:
|
||||||||
Reinsurance
|
|
|
||||||
Insurance premiums and other (net of allowance for doubtful accounts: $
|
|
|
||||||
Deferred income taxes, net
|
|
|
||||||
Deferred acquisition costs
|
|
|
||||||
Other assets
|
|
|
||||||
Intangibles
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Insurance reserves and policyholder funds:
|
||||||||
Future policy benefits
|
$
|
|
$
|
|
||||
Unearned premiums
|
|
|
||||||
Losses and claims
|
|
|
||||||
Other policy liabilities
|
|
|
||||||
Total insurance reserves and policyholder funds
|
|
|
||||||
Accounts payable and accrued expenses
|
|
|
||||||
Revolving credit facility |
||||||||
Junior subordinated debenture obligations, net
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Note 12)
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock, $
|
|
|
||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive income (loss)
|
(
|
)
|
|
|||||
Unearned stock grant compensation
|
(
|
)
|
(
|
)
|
||||
Treasury stock, at cost:
|
(
|
)
|
(
|
)
|
||||
Total shareholders’ equity
|
|
|
||||||
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022 | 2021 | |||||||||||||
Revenue:
|
||||||||||||||||
Insurance premiums, net
|
$
|
|
$
|
|
$ | $ | ||||||||||
Net investment income
|
|
|
||||||||||||||
Realized investment gains (losses), net
|
(
|
)
|
|
( |
) | |||||||||||
Unrealized gains (losses) on equity securities, net
|
(
|
)
|
|
( |
) | |||||||||||
Other income
|
|
|
||||||||||||||
Total revenue
|
|
|
||||||||||||||
Benefits and expenses:
|
||||||||||||||||
Insurance benefits and losses incurred
|
|
|
||||||||||||||
Commissions and underwriting expenses
|
|
|
||||||||||||||
Interest expense
|
|
|
||||||||||||||
Other expense
|
|
|
||||||||||||||
Total benefits and expenses
|
|
|
||||||||||||||
Income (loss) before income taxes
|
(
|
)
|
|
|||||||||||||
Income tax expense (benefit)
|
(
|
)
|
|
|||||||||||||
Net income (loss)
|
(
|
)
|
|
|||||||||||||
Preferred stock dividends
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Net income (loss) applicable to common shareholders
|
$
|
(
|
)
|
$
|
|
$ | $ | |||||||||
Earnings (loss) per common share (basic)
|
$ | ( |
) | $ | $ | $ | ||||||||||
Earnings (loss) per common share (diluted) | $ | ( |
) | $ | $ | $ |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022 | 2021 | |||||||||||||
Net income (loss)
|
$
|
(
|
)
|
$
|
|
$ | $ | |||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Available-for-sale fixed maturity securities:
|
||||||||||||||||
Gross unrealized holding gain (loss) arising in the period
|
(
|
)
|
|
( |
) | ( |
) | |||||||||
Related income tax effect
|
|
(
|
)
|
|||||||||||||
Subtotal
|
(
|
)
|
|
( |
) | ( |
) | |||||||||
Less: reclassification adjustment for net realized (gains) losses included in net income (loss)
|
|
(
|
)
|
( |
) | |||||||||||
Related income tax effect
|
(
|
)
|
|
( |
) | |||||||||||
Subtotal
|
|
(
|
)
|
( |
) | |||||||||||
Total other comprehensive income (loss), net of tax
|
(
|
)
|
|
( |
) | ( |
) | |||||||||
Total comprehensive income (loss)
|
$
|
(
|
)
|
$
|
|
$ | ( |
) | $ | ( |
) |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022 |
2021 |
|||||||||||||
Preferred stock:
|
||||||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$ | $ | ||||||||||
Balance, end of period
|
|
|
||||||||||||||
Common stock:
|
||||||||||||||||
Balance, beginning of period
|
|
|
||||||||||||||
Balance, end of period
|
|
|
||||||||||||||
Additional paid-in capital:
|
||||||||||||||||
Balance, beginning of period
|
|
|
||||||||||||||
Restricted stock grants, net of forfeitures
|
|
|
||||||||||||||
Issuance of shares under stock plans
|
|
|
||||||||||||||
Balance, end of period
|
|
|
||||||||||||||
Retained earnings:
|
||||||||||||||||
Balance, beginning of period
|
|
|
||||||||||||||
Net income (loss)
|
(
|
)
|
|
|||||||||||||
Dividends on common stock
|
|
|
( |
) | ( |
) | ||||||||||
Dividends accrued on preferred stock
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Balance, end of period
|
|
|
||||||||||||||
Accumulated other comprehensive income (loss):
|
||||||||||||||||
Balance, beginning of period
|
|
|
||||||||||||||
Other comprehensive income (loss), net of tax
|
(
|
)
|
|
( |
) | ( |
) | |||||||||
Balance, end of period
|
(
|
)
|
|
( |
) | |||||||||||
Unearned stock grant compensation:
|
||||||||||||||||
Balance, beginning of period
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Restricted stock grants, net of forfeitures
|
|
|
( |
) | ||||||||||||
Amortization of unearned compensation
|
|
|
||||||||||||||
Balance, end of period
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Treasury stock:
|
||||||||||||||||
Balance, beginning of period
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Restricted stock grants, net of forfeitures
|
|
|
||||||||||||||
Net shares acquired related to employee share-based compensation plans
|
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Issuance of shares under stock plans
|
|
|
||||||||||||||
Balance, end of period
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Total shareholders’ equity
|
$
|
|
$
|
|
$ | $ | ||||||||||
Dividends declared on common stock per share
|
$
|
|
$
|
|
$ | $ | ||||||||||
Common shares outstanding:
|
||||||||||||||||
Balance, beginning of period
|
||||||||||||||||
Net shares acquired under employee share-based compensation plans | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Issuance of shares under stock plans
|
||||||||||||||||
Restricted stock grants, net of forfeitures
|
||||||||||||||||
Balance, end of period |
Six Months Ended
June 30,
|
||||||||
2022
|
2021
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
(Additions to) amortization of acquisition costs, net
|
(
|
)
|
|
|||||
Realized investment losses (gains), net
|
|
(
|
)
|
|||||
Unrealized (gains) losses on equity securities, net
|
|
(
|
)
|
|||||
Earnings from equity method investees |
||||||||
Compensation expense related to share awards
|
|
|
||||||
Depreciation and amortization
|
|
|
||||||
Deferred income tax benefit
|
(
|
)
|
(
|
)
|
||||
Increase in receivables, net
|
( |
) |
(
|
)
|
||||
Increase in insurance reserves and policyholder funds
|
|
|
||||||
Decrease in accounts payable and accrued expenses
|
(
|
)
|
(
|
)
|
||||
Other, net
|
|
(
|
)
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from investments sold
|
|
|
||||||
Proceeds from investments matured, called or redeemed
|
|
|
||||||
Investments purchased
|
(
|
)
|
(
|
)
|
||||
Additions to property and equipment
|
(
|
)
|
(
|
)
|
||||
Net cash (used in) provided by investing activities
|
(
|
)
|
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payment of dividends on common stock
|
( |
) | ( |
) | ||||
Proceeds from shares issued under stock plans
|
|
|
||||||
Treasury stock acquired — net employee share-based compensation
|
( |
) | ( |
) | ||||
Proceeds from revolving credit facility, net
|
||||||||
Net cash provided by (used in) financing activities
|
|
(
|
)
|
|||||
Net decrease in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Cash paid for income taxes |
$ | $ |
Note 1. |
Basis of Presentation
|
Note 2. |
Recently Issued Accounting Standards
|
Note 3. |
Investments
|
June 30, 2022
|
||||||||||||||||
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
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Obligations of states and political subdivisions
|
||||||||||||||||
Corporate securities:
|
||||||||||||||||
Utilities and telecom
|
||||||||||||||||
Financial services
|
||||||||||||||||
Other business – diversified
|
||||||||||||||||
Other consumer – diversified
|
||||||||||||||||
Total corporate securities
|
||||||||||||||||
Redeemable preferred stocks:
|
||||||||||||||||
Other consumer – diversified
|
||||||||||||||||
Total redeemable preferred stocks
|
||||||||||||||||
Total fixed maturities
|
$
|
$ |
$ |
$ |
December 31, 2021
|
||||||||||||||||
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
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Obligations of states and political subdivisions
|
||||||||||||||||
Corporate securities:
|
||||||||||||||||
Utilities and telecom
|
||||||||||||||||
Financial services
|
||||||||||||||||
Other business – diversified
|
||||||||||||||||
Other consumer – diversified
|
||||||||||||||||
Total corporate securities
|
||||||||||||||||
Redeemable preferred stocks:
|
||||||||||||||||
Other consumer – diversified
|
||||||||||||||||
Total redeemable preferred stocks
|
||||||||||||||||
Total fixed maturities
|
$ |
$ |
$ |
$ |
June 30, 2022
|
||||||||||||||||
Estimated
Fair Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Cost
|
|||||||||||||
Equity securities:
|
||||||||||||||||
Common and non-redeemable preferred stocks:
|
||||||||||||||||
Financial services
|
$
|
$ |
$ |
$ |
||||||||||||
Other business – diversified
|
||||||||||||||||
Total equity securities
|
$
|
$ |
$ |
$ |
December 31, 2021
|
||||||||||||||||
Estimated
Fair Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Cost
|
|||||||||||||
Equity securities:
|
||||||||||||||||
Common and non-redeemable preferred stocks:
|
||||||||||||||||
Financial services
|
$
|
$ |
$ |
$ |
||||||||||||
Other business – diversified
|
||||||||||||||||
Total equity securities
|
$
|
$ |
$ |
$ |
June 30, 2022
|
December 31, 2021
|
|||||||||||||||
Carrying
Value
|
Amortized
Cost
|
Carrying
Value
|
Amortized
Cost
|
|||||||||||||
Due in one year or less
|
$
|
$ |
$ |
$ |
||||||||||||
Due after one year through five years
|
||||||||||||||||
Due after five years through ten years
|
||||||||||||||||
Due after ten years
|
||||||||||||||||
Asset backed securities
|
||||||||||||||||
Totals
|
$
|
$ |
$ |
$ |
June 30, 2022
|
||||||||||||||||||||||||
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
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Obligations of states and political subdivisions
|
||||||||||||||||||||||||
Corporate securities
|
||||||||||||||||||||||||
Total temporarily impaired securities
|
$ | $ | $ | $ | $ | $ |
December 31, 2021
|
||||||||||||||||||||||||
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
|
$
|
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Corporate securities
|
||||||||||||||||||||||||
Total temporarily impaired securities
|
$
|
$ |
$ |
$ |
$ |
$ |
Three Months Ended
June 30, 2022
|
||||||||||||||||
Fixed
Maturities
|
Equity
Securities
|
Other
Invested
Assets
|
Total
|
|||||||||||||
Gains
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Losses
|
( |
) | ( |
) | ( |
) | ||||||||||
Realized investment losses, net
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
Three Months Ended
June 30, 2021
|
||||||||||||||||
Fixed
Maturities
|
Equity
Securities
|
Other
Invested
Assets
|
Total
|
|||||||||||||
Gains
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Losses
|
|
|
|
|
||||||||||||
Realized investment gains, net
|
$
|
|
$
|
|
$
|
|
$
|
|
Six Months Ended
June 30, 2022
|
||||||||||||||||
Fixed
Maturities
|
Equity
Securities
|
Other
Invested
Assets
|
Total
|
|||||||||||||
Gains
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Losses
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Realized investment losses, net
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
Six Months Ended
June 30, 2021
|
||||||||||||||||
Fixed
Maturities
|
Equity
Securities
|
Other
Invested
Assets
|
Total
|
|||||||||||||
Gains | $ | $ | $ | $ | ||||||||||||
Losses
|
|
|
|
|
||||||||||||
Realized investment gains, net
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2022 | 2021 |
2022 |
2021 | |||||||||||||
Net realized and unrealized gains (losses) recognized during the period on equity securities
|
$
|
(
|
)
|
$
|
|
$ | ( |
) | $ | |||||||
Less: Net realized gains (losses) recognized during the period on equity securities sold during the period
|
|
|
||||||||||||||
Unrealized gains (losses) recognized during the reporting period on equity securities, net
|
$
|
(
|
)
|
$
|
|
$ | ( |
) | $ |
Note 4. |
Fair Values of Financial Instruments
|
Level 1 |
Observable inputs that reflect
quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. The Company’s financial instruments valued using Level 1 criteria include cash equivalents and exchange
traded common stocks.
|
Level 2 |
Observable inputs, other than quoted
prices included in Level 1, for an asset or liability or prices for similar assets or liabilities. The Company’s financial instruments valued using Level 2 criteria include significantly most of its fixed maturities, which consist of U.S.
Treasury securities, U.S. Government securities, obligations of states and political subdivisions, and certain corporate fixed maturities, as well as its non-redeemable preferred stocks. In determining fair value measurements of its fixed
maturities and non-redeemable preferred stocks using Level 2 criteria, the Company utilizes data from outside sources, including nationally recognized pricing services and broker/dealers. Prices for the majority of the Company’s Level 2
fixed maturities and non-redeemable preferred stocks were determined using unadjusted prices received from pricing services that utilize models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment
speeds, default rates, loss severities) or can be corroborated by observable market data.
|
Level 3 |
Valuations
that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Fair value is based on criteria that use assumptions or other data that are not readily observable from
objective sources. With little or no observable market, the determination of fair values uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or
liability. The Company’s financial instruments valued using Level 3 criteria consist of two fixed maturity securities and one equity security. As of June 30, 2022 and December 31, 2021, the value of the fixed maturities valued using Level
3 criteria was $
|
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
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Equity securities
|
|
|
|
|
||||||||||||
Cash equivalents
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
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
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Equity securities
|
|
|
|
|
||||||||||||
Cash equivalents
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
June 30, 2022
|
December 31, 2021
|
|||||||||||||||||
Level in Fair
Value
Hierarchy (1)
|
Carrying
Amount
|
Estimated
Fair Value
|
Carrying
Amount
|
Estimated
Fair Value
|
||||||||||||||
Assets:
|
||||||||||||||||||
Cash and cash equivalents
|
Level 1
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
Fixed maturities
|
|
(1) |
|
|
|
|
||||||||||||
Equity securities
|
(1)
|
|
|
|
|
|||||||||||||
Other invested assets
|
Level 3
|
|
|
|
|
|||||||||||||
Policy loans
|
Level 2
|
|
|
|
|
|||||||||||||
Investment in unconsolidated trusts
|
Level 2
|
|
|
|
|
|||||||||||||
Liabilities:
|
||||||||||||||||||
Junior subordinated debentures, net
|
Level 2
|
|
|
|
|
(1) |
|
Note 5. |
Internal-Use Software
|
Note 6. |
Insurance Reserves for Losses and Claims
|
Six Months Ended
June 30,
|
||||||||
2022
|
2021
|
|||||||
Beginning insurance reserves for losses and claims, gross |
$
|
|
$
|
|
||||
Less: Reinsurance recoverable on unpaid losses
|
(
|
)
|
(
|
)
|
||||
Beginning insurance reserves for losses and claims, net
|
|
|
||||||
Incurred related to:
|
||||||||
Current accident year
|
|
|
||||||
Prior accident year development (1)
|
( |
)(2) |
|
(3)
|
||||
Total incurred
|
|
|
||||||
Paid related to:
|
||||||||
Current accident year
|
|
|
||||||
Prior accident years
|
|
|
||||||
Total paid
|
|
|
||||||
Ending insurance reserves for losses and claims, net
|
|
|
||||||
Plus: Reinsurance recoverable on unpaid losses
|
|
|
||||||
Ending insurance reserves for losses and claims, gross
|
$
|
|
$
|
|
(1) |
|
(2) |
|
(3) |
|
Six Months Ended
June 30,
|
||||||||
2022
|
2021
|
|||||||
Total incurred losses
|
$
|
|
$
|
|
||||
Cash surrender value and matured endowments
|
|
|
||||||
Benefit reserve changes
|
(
|
)
|
(
|
)
|
||||
Total insurance benefits and losses incurred
|
$
|
|
$
|
|
Note 7. |
Credit
Arrangements
|
Atlantic American
Statutory Trust I
|
Atlantic American
Statutory Trust II
|
|||||||
JUNIOR SUBORDINATED DEBENTURES (1) (2)
|
||||||||
Principal amount owed June 30, 2022
|
$
|
|
$
|
|
||||
Less: Treasury debt (3)
|
|
(
|
)
|
|||||
Net balance June 30, 2022
|
$
|
|
$
|
|
||||
Net balance December 31, 2021
|
$
|
|
$
|
|
||||
Coupon rate
|
|
|
||||||
Interest payable
|
|
|
||||||
Maturity date | ||||||||
Redeemable by issuer
|
|
|
||||||
TRUST PREFERRED SECURITIES
|
||||||||
Issuance date
|
|
|
||||||
Securities issued
|
|
|
||||||
Liquidation preference per security
|
$
|
|
$
|
|
||||
Liquidation value
|
$
|
|
$
|
|
||||
Coupon rate
|
|
|||||||
Distribution payable
|
|
|
||||||
Distribution guaranteed by (4)
|
|
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
Note 8.
|
Earnings (Loss) Per Common Share
|
Three Months Ended
June 30, 2022
|
|||||||||||
Loss
|
Weighted
Average
Shares
(In thousands)
|
Per Share
Amount
|
|||||||||
Basic and Diluted Loss Per Common Share:
|
|||||||||||
Net loss
|
$ | ( |
) | ||||||||
Less preferred stock dividends
|
( |
) | — |
||||||||
Net loss applicable to common shareholders
|
$ | ( |
) | $ | ( |
) |
Three Months Ended
June 30,
2021
|
|||||||||||
Income
|
Weighted
Average
Shares
(In thousands)
|
Per Share
Amount
|
|||||||||
Basic Earnings Per Common Share:
|
|||||||||||
Net income
|
$ | ||||||||||
Less preferred stock dividends
|
( |
) |
— |
||||||||
Net income applicable to common shareholders
|
$ | ||||||||||
Diluted Earnings Per Common Share:
|
|||||||||||
Effect of Series D preferred stock
|
|||||||||||
Net income applicable to common shareholders
|
$ | $ |
Six Months Ended
June 30,
2022
|
|||||||||||
Income
|
Weighted
Average
Shares
(In thousands)
|
Per Share
Amount
|
|||||||||
Basic and Diluted Income Per Common Share:
|
|||||||||||
Net income
|
$ | ||||||||||
Less preferred stock dividends
|
( |
) | — |
||||||||
Net income applicable to common shareholders
|
$ | $ |
Six Months Ended
June 30,
2021
|
||||||||||||
Income
|
Weighted
Average
Shares
(In thousands)
|
Per Share
Amount
|
||||||||||
Basic and Diluted Income Per Common Share:
|
||||||||||||
Net income
|
$ | |||||||||||
Less preferred stock dividends
|
( |
) | — |
|||||||||
Net income applicable to common shareholders
|
$ | $ |
Note 9.
|
Equity and Incentive
Compensation Plan
|
Note 10.
|
Income Taxes
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Federal income tax provision at statutory rate of
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||
Dividends-received deduction
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Meals and entertainment
|
|
|
|
|
||||||||||||
Vested stock and club dues |
( |
) | ( |
) | ||||||||||||
Parking disallowance
|
|
|
|
|
||||||||||||
Penalties and fines |
||||||||||||||||
Income tax expense (benefit)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Current – Federal
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Deferred – Federal
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Total
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
Note 11. |
Leases
|
Six Months Ended
June 30,
|
||||||||
Other information on operating leases:
|
2022
|
2021
|
||||||
Cash payments included in the measurement of lease
liabilities reported in operating cash flows
|
$
|
|
$
|
|
||||
Right-of-use assets included in on the condensed consolidated balance sheet
|
|
|
||||||
Weighted average discount rate
|
|
%
|
|
%
|
||||
Weighted average remaining lease term in years
|
|
|
Lease Liability |
||||
Remainder of 2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
Thereafter
|
|
|||
Total undiscounted lease payments
|
|
|||
Less: present value adjustment
|
|
|||
Operating lease liability included in on the condensed consolidated balance sheet
|
$
|
|
Note 12. |
Commitments and Contingencies
|
Note 13. |
Segment Information
|
Assets
|
June 30,
2022
|
December 31,
2021
|
||||||
American Southern
|
$
|
|
$
|
|
||||
Bankers Fidelity
|
|
|
||||||
Corporate and Other
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
Revenues |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2022
|
2021 |
2022
|
2021 | |||||||||||||
American Southern
|
$
|
|
$
|
|
$ | $ | ||||||||||
Bankers Fidelity
|
|
|
||||||||||||||
Corporate and Other
|
(
|
)
|
|
( |
) | |||||||||||
Total revenue
|
$
|
|
$
|
|
$ | $ |
Income (Loss) Before Income Taxes |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
2022
|
2021
|
2022
|
2021 | ||||||||||||
American Southern
|
$
|
|
$
|
|
$ | $ | ||||||||||
Bankers Fidelity
|
(
|
)
|
|
|||||||||||||
Corporate and Other
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Income (loss) before income taxes
|
$
|
(
|
)
|
$
|
|
$ | $ |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Insurance premiums, net
|
$
|
47,065
|
$
|
45,133
|
$
|
94,146
|
$
|
91,223
|
||||||||
Net investment income
|
2,529
|
2,266
|
4,869
|
4,379
|
||||||||||||
Realized investment gains (losses), net
|
(62
|
)
|
50
|
(72
|
)
|
171
|
||||||||||
Unrealized gains (losses) on equity securities, net
|
(4,866
|
)
|
4,003
|
(2,673
|
)
|
4,747
|
||||||||||
Other income
|
3
|
5
|
7
|
12
|
||||||||||||
Total revenue
|
44,669
|
51,457
|
96,277
|
100,532
|
||||||||||||
Insurance benefits and losses incurred
|
32,753
|
31,703
|
63,922
|
64,975
|
||||||||||||
Commissions and underwriting expenses
|
10,215
|
12,179
|
23,051
|
24,743
|
||||||||||||
Interest expense
|
414
|
347
|
768
|
693
|
||||||||||||
Other expense
|
3,402
|
3,474
|
6,855
|
6,914
|
||||||||||||
Total benefits and expenses
|
46,784
|
47,703
|
94,596
|
97,325
|
||||||||||||
Income (loss) before income taxes
|
$
|
(2,115
|
)
|
$
|
3,754
|
$
|
1,681
|
$
|
3,207
|
|||||||
Net income (loss)
|
$
|
(1,679
|
)
|
$
|
2,962
|
$
|
1,163
|
$
|
2,531
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
Reconciliation of Non-GAAP Financial Measure
|
2022
|
2021
|
2022
|
2021
|
||||||||||||
(In thousands)
|
||||||||||||||||
Net income (loss)
|
$
|
(1,679
|
)
|
$
|
2,962
|
$
|
1,163
|
$
|
2,531
|
|||||||
Income tax expense (benefit)
|
(436
|
)
|
792
|
518
|
676
|
|||||||||||
Realized investment (gains) losses, net
|
62
|
(50
|
)
|
72
|
(171
|
)
|
||||||||||
Unrealized (gains) losses on equity securities, net
|
4,866
|
(4,003
|
)
|
2,673
|
(4,747
|
)
|
||||||||||
Non-GAAP operating income (loss)
|
$
|
2,813
|
$
|
(299
|
)
|
$
|
4,426
|
$
|
(1,711
|
)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Gross written premiums
|
$
|
39,600
|
$
|
33,053
|
$
|
51,158
|
$
|
44,515
|
||||||||
Ceded premiums
|
(1,722
|
)
|
(1,565
|
)
|
(3,339
|
)
|
(3,249
|
)
|
||||||||
Net written premiums
|
$
|
37,878
|
$
|
31,488
|
$
|
47,819
|
$
|
41,266
|
||||||||
Net earned premiums
|
$
|
18,769
|
$
|
16,362
|
$
|
36,112
|
$
|
32,977
|
||||||||
Insurance benefits and losses incurred
|
14,040
|
10,157
|
24,518
|
21,906
|
||||||||||||
Commissions and underwriting expenses
|
4,774
|
5,293
|
10,717
|
9,579
|
||||||||||||
Underwriting income
|
$
|
(45
|
)
|
$
|
912
|
$
|
877
|
$
|
1,492
|
|||||||
Loss ratio
|
74.8
|
%
|
62.1
|
%
|
67.9
|
%
|
66.4
|
%
|
||||||||
Expense ratio
|
25.4
|
32.3
|
29.7
|
29.0
|
||||||||||||
Combined ratio
|
100.2
|
%
|
94.4
|
%
|
97.6
|
%
|
95.4
|
%
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Automobile liability
|
$
|
8,560
|
$
|
7,276
|
$
|
16,185
|
$
|
15,013
|
||||||||
Automobile physical damage
|
6,447
|
5,483
|
12,470
|
11,017
|
||||||||||||
General liability
|
1,430
|
1,424
|
2,859
|
2,677
|
||||||||||||
Surety
|
1,503
|
1,327
|
2,968
|
2,644
|
||||||||||||
Other lines
|
829
|
852
|
1,630
|
1,626
|
||||||||||||
Total
|
$
|
18,769
|
$
|
16,362
|
$
|
36,112
|
$
|
32,977
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Medicare supplement
|
$
|
37,276
|
$
|
40,866
|
$
|
75,247
|
$
|
81,858
|
||||||||
Other health products
|
2,949
|
2,368
|
5,922
|
4,755
|
||||||||||||
Life insurance
|
3,570
|
2,450
|
8,087
|
5,337
|
||||||||||||
Gross earned premiums
|
43,795
|
45,684
|
89,256
|
91,950
|
||||||||||||
Ceded premiums
|
(15,499
|
)
|
(16,913
|
)
|
(31,222
|
)
|
(33,704
|
)
|
||||||||
Net earned premiums
|
28,296
|
28,771
|
58,034
|
58,246
|
||||||||||||
Insurance benefits and losses incurred
|
18,713
|
21,546
|
39,404
|
43,069
|
||||||||||||
Commissions and underwriting expenses
|
7,373
|
8,756
|
16,119
|
18,640
|
||||||||||||
Total expenses
|
26,086
|
30,302
|
55,523
|
61,709
|
||||||||||||
Underwriting income (loss)
|
$
|
2,210
|
$
|
(1,531
|
)
|
$
|
2,511
|
$
|
(3,463
|
)
|
||||||
Loss ratio
|
66.1
|
%
|
74.9
|
%
|
67.9
|
%
|
73.9
|
%
|
||||||||
Expense ratio
|
26.1
|
30.4
|
27.8
|
32.0
|
||||||||||||
Combined ratio
|
92.2
|
%
|
105.3
|
%
|
95.7
|
%
|
105.9
|
%
|
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, 2022
|
—
|
$
|
—
|
—
|
325,129
|
|||||||||||
May 1 – May 31, 2022
|
—
|
—
|
—
|
325,129
|
||||||||||||
June 1 – June 30, 2022
|
—
|
—
|
—
|
325,129
|
||||||||||||
Total
|
—
|
$
|
—
|
—
|
Atlantic American Corporation 2022 Equity and Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 the Registrant’s Current Report on Form 8-K filed May 31, 2022).
|
|
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101. INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline
XBRL document).
|
101. SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
101. CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
|
ATLANTIC AMERICAN CORPORATION
|
|||
(Registrant)
|
|||
Date: August 12, 2022
|
By:
|
/s/ J. Ross Franklin
|
|
J. Ross Franklin
|
|||
Vice President and Chief Financial Officer
|
|||
(Principal Financial and Accounting Officer)
|
1. |
I have reviewed this report on Form 10-Q of Atlantic American Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or
persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 12, 2022
|
/s/ Hilton H. Howell, Jr.
|
|
Hilton H. Howell, Jr.
|
||
President and Chief Executive Officer
|
1. |
I have reviewed this report on Form 10-Q of Atlantic American Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such
internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
d) |
disclosed in
this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The
registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or
persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 12, 2022
|
/s/ J. Ross Franklin
|
|
J. Ross Franklin
|
||
Vice President and
|
||
Chief Financial Officer
|
(1) |
The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
Date: August 12, 2022
|
/s/ Hilton H. Howell, Jr.
|
|
Hilton H. Howell, Jr.
|
||
President and Chief Executive Officer
|
||
Date: August 12, 2022
|
/s/ J. Ross Franklin
|
|
J. Ross Franklin
|
||
Vice President and
|
||
Chief Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Investments: | ||
Fixed maturities, cost | $ 238,401 | $ 238,597 |
Equity securities, cost | 4,906 | 4,907 |
Other invested assets, cost | 5,628 | 698 |
Receivables: | ||
Insurance premiums and other, allowance for doubtful accounts | $ 175 | $ 188 |
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) | 20,398,497 | 20,378,576 |
Treasury stock, at cost (in shares) | 2,002,397 | 2,022,318 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Revenue: | ||||
Insurance premiums, net | $ 47,065 | $ 45,133 | $ 94,146 | $ 91,223 |
Net investment income | 2,529 | 2,266 | 4,869 | 4,379 |
Realized investment gains (losses), net | (62) | 50 | (72) | 171 |
Unrealized gains (losses) on equity securities, net | (4,866) | 4,003 | (2,673) | 4,747 |
Other income | 3 | 5 | 7 | 12 |
Total revenue | 44,669 | 51,457 | 96,277 | 100,532 |
Benefits and expenses: | ||||
Insurance benefits and losses incurred | 32,753 | 31,703 | 63,922 | 64,975 |
Commissions and underwriting expenses | 10,215 | 12,179 | 23,051 | 24,743 |
Interest expense | 414 | 347 | 768 | 693 |
Other expense | 3,402 | 3,474 | 6,855 | 6,914 |
Total benefits and expenses | 46,784 | 47,703 | 94,596 | 97,325 |
Income (loss) before income taxes | (2,115) | 3,754 | 1,681 | 3,207 |
Income tax expense (benefit) | (436) | 792 | 518 | 676 |
Net Income (loss) | (1,679) | 2,962 | 1,163 | 2,531 |
Preferred stock dividends | (100) | (100) | (199) | (199) |
Net Income (loss) applicable to common shareholders | $ (1,779) | $ 2,862 | $ 964 | $ 2,332 |
Earnings (loss) per common share (basic) (in dollars per share) | $ (0.09) | $ 0.14 | $ 0.05 | $ 0.11 |
Earnings (loss) per common share (diluted) (in dollars per share) | $ (0.09) | $ 0.14 | $ 0.05 | $ 0.11 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | ||||
Net Income (loss) | $ (1,679) | $ 2,962 | $ 1,163 | $ 2,531 |
Available-for-sale fixed maturity securities: | ||||
Gross unrealized holding gain (loss) arising in the period | (19,748) | 7,940 | (41,561) | (5,807) |
Related income tax effect | 4,147 | (1,668) | 8,728 | 1,219 |
Subtotal | (15,601) | 6,272 | (32,833) | (4,588) |
Less: reclassification adjustment for net realized (gains) losses included in net income (loss) | 43 | (50) | 53 | (171) |
Related income tax effect | (8) | 11 | (11) | 36 |
Subtotal | 35 | (39) | 42 | (135) |
Total other comprehensive income (loss), net of tax | (15,566) | 6,233 | (32,791) | (4,723) |
Total comprehensive income (loss) | $ (17,245) | $ 9,195 | $ (31,628) | $ (2,192) |
Basis of Presentation |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 | |||
Basis of Presentation [Abstract] | |||
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, 2021
(the “2021 Annual Report”). The Company’s financial condition and results of operations and cash flows as of and for the three and six month periods ended June 30, 2022 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, 2022 or for any other future period.
The
Company’s significant accounting policies have not changed materially from those set out in the 2021 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.
|
Recently Issued Accounting Standards |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 | |||
Recently Issued Accounting Standards [Abstract] | |||
Recently Issued Accounting Standards |
Future
Adoption of New Accounting Standards
For more 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 2021 Annual Report.
|
Investments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2022 and December 31, 2021.
Fixed maturities were comprised of the following:
Bonds having an amortized cost of $11,049
and $11,169 and included in the tables above were on deposit with insurance regulatory authorities as of June 30, 2022 and December 31,
2021, respectively, in accordance with statutory requirements. Additionally, bonds having an amortized cost of $7,872 and $5,371 and included in the tables above were pledged as collateral to the Federal Home Loan Bank of Atlanta ("FHLB") at June 30, 2022 and December 31,
2021, respectively.
Equity securities were comprised of the following:
The carrying value and amortized cost of the Company’s investments in fixed maturities at June 30, 2022 and December 31, 2021 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.
The following tables present the Company’s unrealized loss aging for securities by type and length of time the security was in a continuous
unrealized loss position as of June 30, 2022 and December 31, 2021.
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, 2022 and 2021.
As of June 30, 2022 and December 31, 2021, there were 227
and 61 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 increase in the number of securities in an unrealized loss position during the six month period ended June 30, 2022 was primarily
attributable to a decline in market values in certain of the Company’s fixed maturity securities as a result of a rising 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, 2022.
The following tables summarize realized investment gains (losses) for the three month and six month periods ended June 30, 2022 and 2021.
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, 2022 and 2021.
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 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 $5,128 and $198 as of June 30, 2022 and
December 31, 2021, respectively. The Company’s VIE interests, carried as a part of investment in unconsolidated trusts, totaled $1,238
as of June 30, 2022 and December 31, 2021.
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 $6,366 and $1,436, as of June 30, 2022 and December 31, 2021,
respectively. As of June 30, 2022 and December 31, 2021, the Company had outstanding commitments totaling $5,872 and $1,997, respectively, whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to
fund the purchase of new investments and partnership expenses.
|
Fair Values of Financial Instruments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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.
As
of June 30, 2022, financial instruments carried at fair value were measured on a recurring basis as summarized below:
As
of December 31, 2021, financial instruments carried at fair value were measured on a recurring basis as summarized below:
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, 2022
and December 31, 2021.
|
Internal-Use Software |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 | |||
Internal-Use Software [Abstract] | |||
Internal-Use Software |
On March 3, 2021, the
Company entered into a hosting arrangement through a service contract with a third party software solutions vendor to provide a suite of policy, billing, claim, and customer management services. The software is managed, hosted, supported, and
delivered as a cloud-based software service product offering (software-as-a-service). The initial term of the arrangement is five years
from the effective date with a renewal term of an additional five years.
Service fees related to
the hosting arrangement are recorded as an expense in the Company’s condensed consolidated statement of operations as incurred. Implementation expenses incurred related to third party professional and consulting services have been capitalized.
The Company will begin amortizing, on a straight-line basis over the expected ten year term of the hosting arrangement, when the
software is substantially ready for its intended use. The Company incurred and capitalized implementation costs of $500 during the year
ended December 31, 2021, and $958 during the six months ended June 30, 2022. As a result, the Company has capitalized $1,458 in implementation costs in its condensed consolidated balance sheet as of June 30, 2022. The Company expects the software will be substantially
ready for its intended use during 2023. Accordingly, the Company has not recorded any amortization expense related to software
implementation costs for the six months ended June 30, 2022.
|
Insurance Reserves for Losses and Claims |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance Reserves for Losses and Claims [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance Reserves for Losses and Claims |
The
roll-forward of insurance reserves for losses and claims for the six months ended June 30, 2022 and 2021 is as follows:
Following is a reconciliation of total incurred losses to total
insurance benefits and losses incurred:
|
Credit Arrangements |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Arrangements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Arrangements |
The Company is preparing for the expected discontinuation of LIBOR by identifying, assessing and monitoring risks
associated with LIBOR transition. Preparation includes taking steps to update operational processes to support alternative reference rates and models, as well as evaluating legacy contracts for any changes that may be required, including the
determination of applicable fallbacks.
Bank Debt
On May 12, 2021, the Company entered into a Revolving Credit Agreement (the “Credit
Agreement”) with Truist Bank as the lender (the “Lender”). The Credit Agreement provides for an unsecured $10,000 revolving credit
facility that matures on April 12, 2024. Under the Credit Agreement, the Company will pay interest on the unpaid principal balance of
outstanding revolving loans at the LIBOR Rate (as defined in the Credit Agreement) plus 2.00%, subject to a LIBOR floor rate of 1.00%.
The Credit Agreement requires the Company to comply with certain covenants,
including a debt to capital ratio that restricts the Company from incurring consolidated indebtedness that exceeds 35% of the
Company’s consolidated capitalization at any time. The Credit Agreement also contains customary representations and warranties and events of default. Events of default include, among others, (a) the failure by the Company to pay any amounts owed
under the Credit Agreement when due, (b) the failure to perform and not timely remedy certain covenants, (c) a change in control of the Company and (d) the occurrence of bankruptcy or insolvency events. Upon an event of default, the Lender may,
among other things, declare all obligations under the Credit Agreement immediately due and payable and terminate the revolving commitments. As of June 30, 2022, the Company had outstanding borrowings of $1,000 under the Credit Agreement.
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, 2022 was as follows:
|
Earnings (Loss) Per Common Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Common Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Common Share |
A reconciliation of the numerator and denominator used in the earnings (loss) per
common share calculations is as follows:
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, 2021, since its impact would have
been antidilutive.
|
Equity and Incentive Compensation Plan |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 | |||
Equity and Incentive Compensation Plan [Abstract] | |||
Equity and Incentive Compensation Plan |
On May 1, 2012, the Company’s shareholders approved the 2012 Equity Incentive Plan (the “2012 Plan”). The 2012 Plan
authorizes the grant of up to 2,000,000 stock options, stock appreciation rights, restricted shares, restricted stock units, performance
shares, performance units and other awards for the purpose of providing the Company’s non-employee directors, consultants, officers and other employees incentives and rewards for superior performance. During the six month period ended June 30,
2022, a total of 25,000 restricted shares, with an estimated fair value of $69 were issued under the 2012 Plan. During 2021, there were no restricted
shares issued under the 2012 Plan. The estimated fair value of the restricted shares issued under the 2012 Plan during 2022 was based on the common stock price at date of grant. Stock grants are generally issued from treasury shares. Vesting of
restricted shares generally occurs after a following the date of grant. The Company accounts for forfeitures as they occur. There were no stock options granted or outstanding under the 2012 Plan in 2022 or 2021. Shares available for future grant under the 2012 Plan at
December 31, 2021 were 935,200. The 2012 Plan expired on April 30, 2022, ten years after its effective date. As such, no grants have been or will
be made under the 2012 Plan on or after its expiration, but outstanding awards granted thereunder will continue in accordance with their terms.
to three year period On May 24, 2022, the Company’s shareholders approved the 2022 Equity and Incentive Compensation Plan (the “2022 Plan”). The 2022 Plan authorizes the grant of up to 3,000,000 stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, performance units and other awards,
and succeeded the 2012 Plan for the purpose of providing the Company’s non-employee directors, consultants, officers and other employees incentives and rewards for superior performance. As of June 30, 2022, no shares have been issued under the 2022 Plan.
|
Income Taxes |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
A reconciliation of the differences between income taxes computed at the federal
statutory income tax rate and income tax expense (benefit) is as follows:
The components of income tax expense (benefit) were:
|
Leases |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases |
The Company has 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 through 2026. 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, 2022 and June 30, 2021 was $507.
Additional information regarding the Company’s real estate
operating leases is as follows:
The following table presents maturities and present value of
the Company’s lease liabilities:
As of June 30, 2022, the Company has no operating leases that
have not yet commenced.
|
Commitments and Contingencies |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 | |||
Commitments and Contingencies [Abstract] | |||
Commitments and Contingencies |
Litigation
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 business. 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.
Regulatory Matters
Like all domestic insurance companies, the Company’s insurance subsidiaries are subject to regulation and supervision in the jurisdictions in
which they do business. Statutes typically delegate regulatory, supervisory, and administrative powers to state insurance commissioners. From time to time, and in the ordinary course of business, the Company receives notices and inquiries from
state insurance departments with respect to various matters.
In November 2021, the Company was made aware by a state regulatory authority of alleged violations relating to certain sales of insurance policies and that the Company may be subject to
regulatory action, including fines. The Company agreed to settle the matter through a consent order which included a penalty that was recorded in the financial statements in March 2022.
|
Segment Information |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2022 and 2021.
|
Recently Issued Accounting Standards (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Recently Issued Accounting Standards [Abstract] | |
Future Adoption of New Accounting Standards |
Future
Adoption of New Accounting Standards
For more 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 2021 Annual Report.
|
Investments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Aggregated by Type and Industry |
Fixed maturities were comprised of the following:
Bonds having an amortized cost of $11,049
and $11,169 and included in the tables above were on deposit with insurance regulatory authorities as of June 30, 2022 and December 31,
2021, respectively, in accordance with statutory requirements. Additionally, bonds having an amortized cost of $7,872 and $5,371 and included in the tables above were pledged as collateral to the Federal Home Loan Bank of Atlanta ("FHLB") at June 30, 2022 and December 31,
2021, respectively.
Equity securities were comprised of the following:
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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, 2022 and December 31, 2021 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.
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Investment Securities with Continuous Unrealized Loss Position |
The following tables present the Company’s unrealized loss aging for securities by type and length of time the security was in a continuous
unrealized loss position as of June 30, 2022 and December 31, 2021.
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Summary of Realized Investment Gains |
The following tables summarize realized investment gains (losses) for the three month and six month periods ended June 30, 2022 and 2021.
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Unrealized Gains (Losses) on 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, 2022 and 2021.
|
Fair Values of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments Carried at Fair Value Measured on a Recurring Basis |
As
of June 30, 2022, financial instruments carried at fair value were measured on a recurring basis as summarized below:
As
of December 31, 2021, financial instruments carried at fair value were measured on a recurring basis as summarized below:
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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, 2022
and December 31, 2021.
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Insurance Reserves for Losses and Claims (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance Reserves for Losses and Claims [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Roll-forward of Insurance Reserves for Losses and Claims |
The
roll-forward of insurance reserves for losses and claims for the six months ended June 30, 2022 and 2021 is as follows:
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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:
|
Credit Arrangements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Arrangements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Structure of Statutory Business Trusts |
The financial structure of each of
Atlantic American Statutory Trust I and II as of June 30, 2022 was as follows:
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Earnings (Loss) Per Common Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 earnings (loss) per
common share calculations is as follows:
|
Income Taxes (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 expense (benefit) is as follows:
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Components of Income Tax Expense |
The components of income tax expense (benefit) were:
|
Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Information of Operating Leases |
Additional information regarding the Company’s real estate
operating leases is as follows:
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Maturities and Present Value of Lease Liabilities |
The following table presents maturities and present value of
the Company’s lease liabilities:
|
Segment Information (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets, Revenue 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 2022 and 2021.
|
Basis of Presentation (Details) |
6 Months Ended |
---|---|
Jun. 30, 2022
Segment
| |
Basis of Presentation [Abstract] | |
Number of business units | 2 |
Investments, Fixed Maturities by Contractual Maturities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Carrying Value [Abstract] | ||
Due in one year or less | $ 4,414 | $ 1,734 |
Due after one year through five years | 29,475 | 24,926 |
Due after five years through ten years | 58,472 | 73,725 |
Due after ten years | 92,483 | 122,045 |
Asset backed securities | 34,438 | 38,556 |
Carrying value total | 219,282 | 260,986 |
Amortized Cost [Abstract] | ||
Due in one year or less | 4,402 | 1,730 |
Due after one year through five years | 30,290 | 23,593 |
Due after five years through ten years | 62,750 | 68,338 |
Due after ten years | 103,117 | 106,181 |
Asset backed securities | 37,842 | 38,755 |
Amortized cost total | $ 238,401 | $ 238,597 |
Investments, Summary of Realized Investment Gains (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Summary of realized investment gains [Abstract] | ||||
Gains | $ 0 | $ 50 | $ 0 | $ 171 |
Losses | (62) | 0 | (72) | 0 |
Realized investment Losses (gains), net | (62) | 50 | (72) | 171 |
Fixed Maturities [Member] | ||||
Summary of realized investment gains [Abstract] | ||||
Gains | 0 | 50 | 0 | 171 |
Losses | (43) | 0 | (53) | 0 |
Realized investment Losses (gains), net | (43) | 50 | (53) | 171 |
Equity Securities [Member] | ||||
Summary of realized investment gains [Abstract] | ||||
Gains | 0 | 0 | 0 | 0 |
Losses | 0 | 0 | 0 | 0 |
Realized investment Losses (gains), net | 0 | 0 | 0 | 0 |
Other Invested Assets [Member] | ||||
Summary of realized investment gains [Abstract] | ||||
Gains | 0 | 0 | 0 | 0 |
Losses | (19) | 0 | (19) | 0 |
Realized investment Losses (gains), net | $ (19) | $ 0 | $ (19) | $ 0 |
Investments, Unrealized Gains (Losses) on Equity Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Investments [Abstract] | ||||
Net realized and unrealized gains (losses) recognized during the period on equity securities | $ (4,866) | $ 4,003 | $ (2,673) | $ 4,747 |
Less: Net realized gains (losses) recognized during the period on equity securities sold during the period | 0 | 0 | 0 | 0 |
Unrealized gains (losses) recognized during the reporting period on equity securities, net | $ (4,866) | $ 4,003 | $ (2,673) | $ 4,747 |
Investments, Variable Interest Entities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Variable Interest Entities [Abstract] | ||
Carrying amount of interest | $ 5,128 | $ 198 |
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 | 5,128 | 198 |
Investment in unconsolidated trusts | 1,238 | 1,238 |
Maximum loss exposure | 6,366 | 1,436 |
Outstanding commitments | $ 5,872 | $ 1,997 |
Internal-Use Software (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Internal Use Software [Abstract] | ||
Period of initial terms of arrangement | 5 years | |
Period of additional renewal term | 5 years | |
Incurred and capitalized implementation costs | $ 958 | $ 500 |
Capitalized implementation costs | 1,458 | |
Amortization expense | $ 0 | |
Software Capitalized Implementation Costs [Member] | ||
Internal Use Software [Abstract] | ||
Amortization period | 10 years |
Insurance Reserves for Losses and Claims (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|||||||||
Insurance Reserves for Losses and Claims [Roll Forward] | ||||||||||||
Beginning insurance reserves for losses and claims, gross | $ 85,620 | $ 79,147 | ||||||||||
Less: Reinsurance recoverable on unpaid losses | (17,690) | (17,600) | ||||||||||
Beginning insurance reserves for losses and claims, net | 67,930 | 61,547 | ||||||||||
Incurred related to [Abstract] | ||||||||||||
Current accident year | 66,260 | 63,836 | ||||||||||
Prior accident year development | [1] | (3,195) | [2] | 589 | [3] | |||||||
Total incurred | 63,065 | 64,425 | ||||||||||
Paid related to [Abstract] | ||||||||||||
Current accident year | 32,630 | 33,295 | ||||||||||
Prior accident years | 28,754 | 28,429 | ||||||||||
Total paid | 61,384 | 61,724 | ||||||||||
Ending insurance reserves for losses and claims, net | $ 69,611 | $ 64,248 | 69,611 | 64,248 | ||||||||
Plus: Reinsurance recoverable on unpaid losses | 17,487 | 17,225 | 17,487 | 17,225 | ||||||||
Ending insurance reserves for losses and claims, gross | 87,098 | 81,473 | 87,098 | 81,473 | ||||||||
Reconciliation of total incurred claims to total insurance benefits and losses incurred [Abstract] | ||||||||||||
Total incurred losses | 63,065 | 64,425 | ||||||||||
Cash surrender value and matured endowments | 1,154 | 1,692 | ||||||||||
Benefit reserve changes | (297) | (1,142) | ||||||||||
Total insurance benefits and losses incurred | $ 32,753 | $ 31,703 | $ 63,922 | $ 64,975 | ||||||||
|
Credit Arrangements, Bank Debt (Details) - Revolving Credit Facility [Member] $ in Thousands |
6 Months Ended | |
---|---|---|
May 12, 2021
USD ($)
|
Jun. 30, 2022
USD ($)
|
|
Bank Debt [Abstract] | ||
Unsecured credit facility | $ 10,000 | |
Maturity date | Apr. 12, 2024 | |
Outstanding borrowings | $ 1,000 | |
Minimum [Member] | ||
Bank Debt [Abstract] | ||
Indebtedness capital ratio | 0.35 | |
LIBOR [Member] | ||
Bank Debt [Abstract] | ||
Basis spread on variable rate | 2.00% | |
Interest rate floor | 1.00% |
Credit Arrangements, Junior Subordinated Debentures (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
6 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022
USD ($)
Quarter
Trust
$ / shares
shares
| ||||||||||
Debt Instruments [Abstract] | ||||||||||
Number of Connecticut statutory business trusts | Trust | 2 | |||||||||
Financial structure of statutory business trusts [Abstract] | ||||||||||
Net balance June 30, 2022 | $ 33,738 | |||||||||
Net balance December 31, 2021 | $ 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, 2022 | $ 18,042 | [1],[2] | ||||||||
Less: Treasury debt | 0 | [1],[2],[3] | ||||||||
Net balance June 30, 2022 | 18,042 | [1],[2] | ||||||||
Net balance December 31, 2021 | $ 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, 2022 | $ 23,196 | [1],[2] | ||||||||
Less: Treasury debt | (7,500) | [1],[2],[3] | ||||||||
Net balance June 30, 2022 | 15,696 | [1],[2] | ||||||||
Net balance December 31, 2021 | $ 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% | |||||||||
|
Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Basic Earnings (Loss) Per Common Share [Abstract] | ||||
Net Income (loss) | $ (1,679) | $ 2,962 | $ 1,163 | $ 2,531 |
Less: preferred stock dividends | (100) | (100) | (199) | (199) |
Net Income (loss) applicable to common shareholders | (1,779) | 2,862 | 964 | 2,332 |
Diluted Earnings Per Common Share: [Abstract] | ||||
Net income applicable to common shareholders | $ (1,779) | $ 2,962 | $ 964 | $ 2,332 |
Weighted Average Shares [Abstract] | ||||
Weighted average shares outstanding, Basic (in shares) | 20,402 | 20,414 | 20,391 | 20,415 |
Weighted average shares outstanding, Diluted (in shares) | 20,402 | 21,792 | 20,391 | 20,415 |
Per Share Amount, Basic [Abstract] | ||||
Net income (loss) applicable to common shareholders, Basic (in dollars per share) | $ (0.09) | $ 0.14 | $ 0.05 | $ 0.11 |
Per Share Amount, Diluted [Abstract] | ||||
Net income (loss) applicable to common shareholders, Diluted (in dollars per share) | $ (0.09) | $ 0.14 | $ 0.05 | $ 0.11 |
Series D Preferred Stock [Member] | ||||
Diluted Earnings Per Common Share: [Abstract] | ||||
Effect of Series D preferred stock | $ 100 | |||
Weighted Average Shares [Abstract] | ||||
Effect of Series D preferred stock (in shares) | 1,378 |
Equity and Incentive Compensation Plan (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
May 24, 2022 |
|
Plan 2012 [Member] | Share Awards [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Abstract] | |||
Number of shares authorized for issuance (in shares) | 2,000,000 | ||
Shares available for future grant (in shares) | 0 | 935,200 | |
Equity plan expiration period | 10 years | ||
Plan 2012 [Member] | Stock Option [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Abstract] | |||
Options granted (in shares) | 0 | 0 | |
Options outstanding (in shares) | 0 | 0 | |
Plan 2012 [Member] | Restricted Stock [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Abstract] | |||
Restricted shares issued (in shares) | 25,000 | 0 | |
Estimated fair value of shares issued | $ 69 | ||
Plan 2012 [Member] | Restricted Stock [Member] | Minimum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Abstract] | |||
Vesting period | 1 year | ||
Plan 2012 [Member] | Restricted Stock [Member] | Maximum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Abstract] | |||
Vesting period | 3 years | ||
Plan 2022 [Member] | Share Awards [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Abstract] | |||
Number of shares authorized for issuance (in shares) | 3,000,000 | ||
Shares issued (in shares) | 0 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Reconciliation of income tax expense (benefit) [Abstract] | ||||
Federal income tax provision at statutory rate of 21% | $ (444) | $ 788 | $ 353 | $ 673 |
Dividends-received deduction | (6) | (5) | (12) | (14) |
Meals and entertainment | 10 | 10 | 20 | 14 |
Vested stock and club dues | 0 | (5) | 0 | (5) |
Parking disallowance | 4 | 4 | 8 | 8 |
Penalties and fines | 0 | 0 | 149 | 0 |
Income tax expense (benefit) | (436) | 792 | $ 518 | 676 |
Federal statutory income tax rate | 21.00% | |||
Components of income tax expense (benefit) [Abstract] | ||||
Current - Federal | 1,144 | 693 | $ 1,212 | 1,069 |
Deferred - Federal | (1,580) | 99 | (694) | (393) |
Income tax expense (benefit) | $ (436) | $ 792 | $ 518 | $ 676 |
Leases (Details) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2022
USD ($)
Lease
|
Jun. 30, 2021
USD ($)
|
|
Lease description [Abstract] | ||
Number of operating lease agreements | Lease | 2 | |
Lease expense | $ 507 | $ 507 |
Other information on operating leases [Abstract] | ||
Cash payments included in the measurement of lease liabilities reported in operating cash flows | 512 | 504 |
Right-of-use assets included in other assets on the consolidated balance sheet | $ 3,781 | $ 4,493 |
Weighted average discount rate | 6.80% | 6.80% |
Weighted average remaining lease term in years | 4 years 4 months 24 days | 5 years 4 months 24 days |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets | Other Assets |
Maturities and present value of lease liabilities [Abstract] | ||
Remainder of 2022 | $ 519 | |
2023 | 1,048 | |
2024 | 1,065 | |
2025 | 1,083 | |
2026 | 942 | |
Thereafter | 0 | |
Total undiscounted lease payments | 4,657 | |
Less: present value adjustment | 647 | |
Operating lease liability included in accounts payable and accrued expenses on the condensed consolidated balance sheet | $ 4,010 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accounts Payable and Accrued Liabilities | |
Second Lease [Member] | ||
Lease description [Abstract] | ||
Lease term | 10 years | |
Renewal option period | 7 years |
Segment Information (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2021
USD ($)
|
Jun. 30, 2022
USD ($)
Segment
|
Jun. 30, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Segment Information [Abstract] | |||||
Number of business units | Segment | 2 | ||||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||||
Assets | $ 379,274 | $ 379,274 | $ 402,286 | ||
Revenues | 44,669 | $ 51,457 | 96,277 | $ 100,532 | |
Income (loss) before income taxes | (2,115) | 3,754 | 1,681 | 3,207 | |
Operating Segments [Member] | American Southern [Member] | |||||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||||
Assets | 153,533 | 153,533 | 161,788 | ||
Revenues | 19,496 | 17,522 | 38,002 | 35,048 | |
Income (loss) before income taxes | 682 | 2,073 | 2,767 | 3,563 | |
Operating Segments [Member] | Bankers Fidelity [Member] | |||||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||||
Assets | 202,864 | 202,864 | 227,395 | ||
Revenues | 25,569 | 33,680 | 58,458 | 65,220 | |
Income (loss) before income taxes | (517) | 3,377 | 2,934 | 3,511 | |
Corporate and Other [Member] | |||||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||||
Assets | 22,877 | 22,877 | $ 13,103 | ||
Revenues | (396) | 255 | (183) | 264 | |
Income (loss) before income taxes | $ (2,280) | $ (1,696) | $ (4,020) | $ (3,867) |
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