Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity Registrant Name | ATLANTIC AMERICAN CORP | |
Entity Incorporation, State or Country Code | GA | |
Entity File Number | 0-3722 | |
Entity Tax Identification Number | 58-1027114 | |
Entity Address, Address Line One | 4370 Peachtree Road, N.E. | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30319 | |
City Area Code | 404 | |
Local Phone Number | 266-5500 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 20,403,576 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000008177 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | AAME | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 15,612 | $ 24,753 |
Investments: | ||
Fixed maturities, available-for-sale, at fair value (amortized cost: $239,452 and $238,597) | 240,038 | 260,986 |
Equity securities, at fair value (cost: $4,906 and $4,907) | 21,316 | 19,124 |
Other invested assets (cost: $918 and $698) | 420 | 198 |
Policy loans | 1,814 | 1,858 |
Real estate | 38 | 38 |
Investment in unconsolidated trusts | 1,238 | 1,238 |
Total investments | 264,864 | 283,442 |
Receivables: | ||
Reinsurance | 27,036 | 27,416 |
Insurance premiums and other (net of allowance for doubtful accounts: $185 and $188) | 11,550 | 14,959 |
Deferred income taxes, net | 5,447 | 1,755 |
Deferred acquisition costs | 39,875 | 38,698 |
Other assets | 8,103 | 8,719 |
Intangibles | 2,544 | 2,544 |
Total assets | 375,031 | 402,286 |
Insurance reserves and policyholder funds: | ||
Future policy benefits | 85,541 | 87,348 |
Unearned premiums | 19,834 | 27,469 |
Losses and claims | 85,235 | 85,620 |
Other policy liabilities | 961 | 1,360 |
Total insurance reserves and policyholder funds | 191,571 | 201,797 |
Accounts payable and accrued expenses | 23,299 | 25,465 |
Junior subordinated debenture obligations, net | 33,738 | 33,738 |
Total liabilities | 248,608 | 261,000 |
Commitments and contingencies (Note 11) | ||
Shareholders' equity: | ||
Preferred stock, $1 par, 4,000,000 shares authorized; Series D preferred, 55,000 shares issued and outstanding; $5,500 redemption value | 55 | 55 |
Common stock, $1 par, 50,000,000 shares authorized; shares issued: 22,400,894; shares outstanding: 20,403,576 and 20,378,576 | 22,401 | 22,401 |
Additional paid-in capital | 57,443 | 57,441 |
Retained earnings | 53,599 | 51,264 |
Accumulated other comprehensive income | 463 | 17,688 |
Unearned stock grant compensation | (117) | (73) |
Treasury stock, at cost, 1,997,318 and 2,022,318 shares | (7,421) | (7,490) |
Total shareholders' equity | 126,423 | 141,286 |
Total liabilities and shareholders' equity | $ 375,031 | $ 402,286 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Investments: | ||
Fixed maturities, cost | $ 239,452 | $ 238,597 |
Equity securities, cost | 4,906 | 4,907 |
Other invested assets, cost | 918 | 698 |
Receivables: | ||
Insurance premiums and other, allowance for doubtful accounts | $ 185 | $ 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) | 20,403,576 | 20,378,576 |
Treasury stock, at cost (in shares) | 1,997,318 | 2,022,318 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue: | ||
Insurance premiums, net | $ 47,081 | $ 46,090 |
Net investment income | 2,340 | 2,113 |
Realized investment gains (losses), net | (10) | 121 |
Unrealized gains on equity securities, net | 2,193 | 744 |
Other income | 4 | 7 |
Total revenue | 51,608 | 49,075 |
Benefits and expenses: | ||
Insurance benefits and losses incurred | 31,169 | 33,272 |
Commissions and underwriting expenses | 12,836 | 12,564 |
Interest expense | 354 | 346 |
Other expense | 3,453 | 3,440 |
Total benefits and expenses | 47,812 | 49,622 |
Income (loss) before income taxes | 3,796 | (547) |
Income tax expense (benefit) | 954 | (116) |
Net Income (loss) | 2,842 | (431) |
Preferred stock dividends | (99) | (99) |
Net Income (loss) applicable to common shareholders | $ 2,743 | $ (530) |
Earnings (loss) per common share (basic) (in dollars per share) | $ 0.13 | $ (0.03) |
Earnings (loss) per common share (diluted) (in dollars per share) | $ 0.13 | $ (0.03) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | ||
Net Income (loss) | $ 2,842 | $ (431) |
Available-for-sale fixed maturity securities: | ||
Gross unrealized holding loss arising in the period | (21,813) | (13,747) |
Related income tax effect | 4,581 | 2,887 |
Subtotal | (17,232) | (10,860) |
Less: reclassification adjustment for net realized (gains) losses included in net income (loss) | 10 | (121) |
Related income tax effect | (3) | 25 |
Subtotal | 7 | (96) |
Total other comprehensive loss, net of tax | (17,225) | (10,956) |
Total comprehensive loss | $ (14,383) | $ (11,387) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Unearned Stock Grant Compensation [Member] | Treasury Stock [Member] | Total |
Balance, beginning of period at Dec. 31, 2020 | $ 55 | $ 22,401 | $ 57,437 | $ 47,790 | $ 25,000 | $ (284) | $ (7,339) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income (loss) | (431) | $ (431) | ||||||
Other comprehensive loss, net of tax | (10,956) | (10,956) | ||||||
Dividends on common stock | (408) | |||||||
Dividends accrued on preferred stock | (99) | |||||||
Restricted stock grants, net of forfeitures | 0 | 0 | 0 | |||||
Amortization of unearned compensation | 67 | |||||||
Issuance of shares under stock plans | 1 | 1 | ||||||
Balance, end of period at Mar. 31, 2021 | 55 | $ 22,401 | 57,438 | 46,852 | 14,044 | (217) | (7,338) | $ 133,235 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividends declared on common stock per share (in dollars per share) | $ 0.02 | |||||||
Balance, beginning of period (in shares) at Dec. 31, 2020 | 20,415,243 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of shares under stock plans (in shares) | 539 | |||||||
Restricted stock grants, net of forfeitures (in shares) | 0 | |||||||
Balance, end of period (in shares) at Mar. 31, 2021 | 20,415,782 | |||||||
Balance, beginning of period at Dec. 31, 2021 | 55 | $ 22,401 | 57,441 | 51,264 | 17,688 | (73) | (7,490) | $ 141,286 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income (loss) | 2,842 | 2,842 | ||||||
Other comprehensive loss, net of tax | (17,225) | (17,225) | ||||||
Dividends on common stock | (408) | |||||||
Dividends accrued on preferred stock | (99) | |||||||
Restricted stock grants, net of forfeitures | 2 | (71) | 69 | |||||
Amortization of unearned compensation | 27 | |||||||
Issuance of shares under stock plans | 0 | 0 | ||||||
Balance, end of period at Mar. 31, 2022 | $ 55 | $ 22,401 | $ 57,443 | $ 53,599 | $ 463 | $ (117) | $ (7,421) | $ 126,423 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividends declared on common stock per share (in dollars per share) | $ 0.02 | |||||||
Balance, beginning of period (in shares) at Dec. 31, 2021 | 20,378,576 | 20,378,576 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of shares under stock plans (in shares) | 0 | |||||||
Restricted stock grants, net of forfeitures (in shares) | 25,000 | |||||||
Balance, end of period (in shares) at Mar. 31, 2022 | 20,403,576 | 20,403,576 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 2,842 | $ (431) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
(Additions to) amortization of acquisition costs, net | (1,177) | 1,513 |
Realized investment losses (gains), net | 10 | (121) |
Unrealized gains on equity securities, net | (2,193) | (744) |
Earnings from equity method investees | (2) | 0 |
Compensation expense related to share awards | 27 | 67 |
Depreciation and amortization | 240 | 264 |
Deferred income tax expense (benefit) | 886 | (492) |
Decrease in receivables, net | 3,789 | 4,559 |
Decrease in insurance reserves and policyholder funds | (10,226) | (6,693) |
Decrease in accounts payable and accrued expenses | (2,676) | (2,250) |
Other, net | 473 | (1,716) |
Net cash used in operating activities | (8,007) | (6,044) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from investments sold | 44 | 13,266 |
Proceeds from investments matured, called or redeemed | 3,875 | 4,506 |
Investments purchased | (5,052) | (10,564) |
Additions to property and equipment | (1) | (39) |
Net cash (used in) provided by investing activities | (1,134) | 7,169 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from shares issued under stock plans | 0 | 2 |
Net cash provided by financing activities | 0 | 2 |
Net (decrease) increase in cash and cash equivalents | (9,141) | 1,127 |
Cash and cash equivalents at beginning of period | 24,753 | 19,319 |
Cash and cash equivalents at end of period | 15,612 | 20,446 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | $ 346 | $ 351 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Atlantic American Corporation (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”). The Parent’s primary operating subsidiaries, American Southern Insurance Company and American Safety Insurance Company (together known as “American Southern”) and Bankers Fidelity Life Insurance Company and Bankers Fidelity Assurance Company (together known as “Bankers Fidelity”), operate in two principal business units. American Southern operates in the property and casualty insurance market, while Bankers Fidelity operates in the life and health insurance market. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The unaudited condensed consolidated financial statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”). The Company’s financial condition and results of operations and cash flows as of and for the three month period ended March 31, 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 Stan
Recently Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2022 | |
Recently Issued Accounting Standards [Abstract] | |
Recently Issued Accounting Standards | Note 2 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
Investments | 3 Months Ended |
Mar. 31, 2022 | |
Investments [Abstract] | |
Investments | Note 3. Investments The following tables set forth the estimated fair value, gross unrealized gains, gross unrealized losses and cost or amortized cost of the Company’s investments in fixed maturities and equity securities, aggregated by type and industry, as of March 31, 2022 and December 31, 2021. Fixed maturities were comprised of the following: March 31, 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 $ 47,852 $ 172 $ 2,098 $ 49,778 Obligations of states and political subdivisions 11,058 228 63 10,893 Corporate securities: Utilities and telecom 27,051 955 695 26,791 Financial services 65,895 1,868 1,250 65,277 Other business – diversified 36,107 1,255 823 35,675 Other consumer – diversified 51,832 1,701 714 50,845 Total corporate securities 180,885 5,779 3,482 178,588 Redeemable preferred stocks: Other consumer – diversified 243 50 — 193 Total redeemable preferred stocks 243 50 — 193 Total fixed maturities $ 240,038 $ 6,229 $ 5,643 $ 239,452 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 $ 50,298 $ 763 $ 416 $ 49,951 Obligations of states and political subdivisions 11,644 749 — 10,895 Corporate securities: Utilities and telecom 29,717 2,961 44 26,800 Financial services 70,921 6,759 48 64,210 Other business – diversified 40,216 4,631 106 35,691 Other consumer – diversified 57,940 7,185 103 50,858 Total corporate securities 198,794 21,536 301 177,559 Redeemable preferred stocks: Other consumer – diversified 250 58 — 192 Total redeemable preferred stocks 250 58 — 192 Total fixed maturities $ 260,986 $ 23,106 $ 717 $ 238,597 Bonds having an amortized cost of $10,879 and $11,169 and included in the tables above were on deposit with insurance regulatory authorities as of March 31, 2022 and December 31, 2021, respectively, in accordance with statutory requirements. Additionally, bonds having an amortized cost of $4,762 and $5,371 and included in the tables above were pledged as collateral to the Federal Home Loan Bank of Atlanta (“FHLB”) at March 31, 2022 and December 31, 2021, respectively. Equity securities were comprised of the following: March 31, 2022 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Cost or Amortized Cost Equity securities: Common and non-redeemable preferred stocks: Financial services $ 878 $ 605 $ — $ 273 Other business – diversified 20,438 15,805 — 4,633 Total equity securities $ 21,316 $ 16,410 $ — $ 4,906 December 31, 2021 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Cost or Amortized Cost Equity securities: Common and non-redeemable preferred stocks: Financial services $ 799 525 — 274 Other business – diversified 18,325 13,692 — 4,633 Total equity securities $ 19,124 $ 14,217 $ — $ 4,907 The carrying value and amortized cost of the Company’s investments in fixed maturities at March 31, 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. March 31, 2022 December 31, 2021 Carrying Value Amortized Cost Carrying Value Amortized Cost Due in one year or less $ 1,407 $ 1,403 $ 1,734 $ 1,730 Due after one year through five years 29,051 28,969 24,926 23,593 Due after five years through ten years 65,067 65,159 73,725 68,338 Due after ten years 107,568 105,175 122,045 106,181 Asset backed securities 36,945 38,746 38,556 38,755 Totals $ 240,038 $ 239,452 $ 260,986 $ 238,597 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 March 31, 2022 and December 31, 2021. March 31, 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 $ 33,399 $ 1,555 $ 5,041 $ 543 $ 38,440 $ 2,098 Obligations of states and political subdivisions 3,394 63 — — 3,394 63 Corporate securities 65,680 2,732 4,978 750 70,658 3,482 Total temporarily impaired securities $ 102,473 $ 4,350 $ 10,019 $ 1,293 $ 112,492 $ 5,643 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 $ 30,141 $ 416 $ — $ — $ 30,141 $ 416 Corporate securities 3,326 49 4,761 252 8,087 301 Total temporarily impaired securities $ 33,467 $ 465 $ 4,761 $ 252 $ 38,228 $ 717 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 periods ended March 31, 2022 and 2021. As of March 31, 2022 and December 31, 2021, there were 141 and 61 securities, respectively, in an unrealized loss position which primarily included certain of the Company’s investments in fixed maturities within the utilities and telecom, financial services, other diversified business and other diversified consumer sectors. The increase in the number of securities in an unrealized loss position during the three month period ended March 31, 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 March 31, 2022. The following table is a summary of realized investment gains (losses) for the three month period ended March 31, 2022 and 2021. Three Months Ended March 31, 2022 Fixed Maturities Equity Securities Other Invested Assets Total Gains $ — $ — $ — $ — Losses (10 ) — — (10 ) Realized investment losses, net $ (10 ) $ — $ — $ (10 ) Three Months Ended March 31, 2021 Fixed Maturities Equity Securities Other Invested Assets Total Gains $ 121 $ — $ — $ 121 Losses — — — — Realized investment gains, net $ 121 $ — $ — $ 121 The following table presents the portion of unrealized gains related to equity securities still held for the three month period ended March 31, 2022 and 2021. Three Months Ended March 31, 2022 2021 Net realized and unrealized gains recognized during the period on equity securities $ 2,193 $ 744 Less: Net realized gains recognized during the period on equity securities sold during the period — — Unrealized gains recognized during the reporting period on equity securities, net $ 2,193 $ 744 Variable Interest Entities The Company holds passive interests in a number of entities that are considered to be variable interest entities (“VIEs”) under GAAP guidance. The Company’s VIE interests principally consist of interests in limited partnerships and limited liability companies formed for the purpose of achieving diversified equity returns. The Company’s VIE interests, carried as a part of other invested assets, totaled $420 and $198 as of March 31, 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 March 31, 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 $1,658 and $1,436, as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, the Company had outstanding commitments totaling $12,777 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 Instru
Fair Values of Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Fair Values of Financial Instruments [Abstract] | |
Fair Values of Financial Instruments | Note 4. Fair Values of Financial Instruments The estimated fair values have been determined by the Company using available market information from various market sources and appropriate valuation methodologies as of the respective dates. However, considerable judgment is necessary to interpret market data and to develop the estimates of fair value. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, the estimates presented herein are not necessarily indicative of the amounts which the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The following describes the fair value hierarchy and provides information as to the extent to which the Company uses fair value to measure the value of its financial instruments and information about the inputs used to value those financial instruments. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three broad levels. Level 1 Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. The Company’s financial instruments valued using Level 1 criteria include cash equivalents 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 March 31, 2022 and December 31, 2021, the value of the fixed maturities valued using Level 3 criteria was $0 and $ , respectively. As of March 31, 2022 and December 31, 2021, the value of the equity security valued using Level 3 criteria was $ and $ , respectively. The equity security is not traded and is valued at cost. The use of different criteria or assumptions regarding data may have yielded materially different valuations. As of March 31, 2022, financial instruments carried at fair value were measured on a recurring basis as summarized below: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Fixed maturities $ — $ 240,038 $ — $ 240,038 Equity securities 21,160 — 156 21,316 Cash equivalents 11,534 — — 11,534 Total $ 32,694 $ 240,038 $ 156 $ 272,888 As of December 31, 2021, financial instruments carried at fair value were measured on a recurring basis as summarized below: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Fixed maturities $ 250 $ 260,486 $ 250 $ 260,986 Equity securities 18,967 — 157 19,124 Cash equivalents 12,713 — — 12,713 Total $ 31,930 $ 260,486 $ 407 $ 292,823 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 March 31, 2022 and December 31, 2021. March 31, 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 $ 15,612 $ 15,612 $ 24,753 $ 24,753 Fixed maturities (1) 240,038 240,038 260,986 260,986 Equity securities (1) 21,316 21,316 19,124 19,124 Other invested assets Level 3 420 420 198 198 Policy loans Level 2 1,814 1,814 1,858 1,858 Investment in unconsolidated trusts Level 2 1,238 1,238 1,238 1,238 Liabilities: Junior subordinated debentures, net Level 2 33,738 33,115 33,738 33,728 (1) See the aforementioned information for a description of the fair value hierarchy as well as a disclosure of levels for classes of these financial assets. |
Insurance Reserves for Losses a
Insurance Reserves for Losses and Claims | 3 Months Ended |
Mar. 31, 2022 | |
Insurance Reserves for Losses and Claims [Abstract] | |
Insurance Reserves for Losses and Claims | Note 5. Insurance Reserves for Losses and Claims The roll-forward of insurance reserves for losses and claims for the three months ended March 31, 2022 and 2021 is as follows: Three Months Ended March 31, 2022 2021 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: Current accident year 32,542 32,928 Prior accident year development (1) (1,523 ) (2) 475 (3) Total incurred 31,019 33,403 Paid related to: Current accident year 10,629 10,917 Prior accident years 19,966 20,984 Total paid 30,595 31,901 Ending insurance reserves for losses and claims, net 68,354 63,049 Plus: Reinsurance recoverable on unpaid losses 16,881 18,236 Ending insurance reserves for losses and claims, gross $ 85,235 $ 81,285 (1) In establishing property and casualty reserves, the Company initially reserves for losses at the higher end of the reasonable range if no other value within the range is determined to be more probable. Selection of such an initial loss estimate is an attempt by management to give recognition that initial claims information received generally is not conclusive with respect to legal liability, is generally not comprehensive with respect to magnitude of loss and generally, based on historical experience, will develop more adversely as time passes and more information becomes available. Accordingly, the Company generally experiences reserve redundancies when analyzing the development of prior year losses in a current period. (2) Prior years’ development was primarily the result of favorable development in both the life and health and the property and casualty operations. (3) Prior years’ development was primarily the result of unfavorable development in the loss and claim reserves for the Medicare supplement line of business in Bankers Fidelity. Partially offsetting the unfavorable development was favorable development in the property and casualty operations. Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred: Three Months Ended March 31, 2022 2021 Total incurred losses $ 31,019 $ 33,403 Cash surrender value and matured endowments 362 247 Benefit reserve changes (212 ) (378 ) Total insurance benefits and losses incurred $ 31,169 $ 33,272 |
Credit Arrangements
Credit Arrangements | 3 Months Ended |
Mar. 31, 2022 | |
Credit Arrangements [Abstract] | |
Credit Arrangements | Note 6. 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 million 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 March 31, 2022, the Company does not have any outstanding borrowings under the Credit Agreement. Junior Subordinated Debentures The The financial structure of each of Atlantic American Statutory Trust I and II as of March 31, 2022 was as follows: Atlantic American Statutory Trust I Atlantic American Statutory Trust II JUNIOR SUBORDINATED DEBENTURES (1) (2) Principal amount owed March 31, 2022 $ 18,042 $ 23,196 Less: Treasury debt (3) — (7,500 ) Net balance March 31, 2022 $ 18,042 $ 15,696 Net balance December 31, 2021 $ 18,042 $ 15,696 Coupon rate LIBOR + LIBOR + Interest payable Quarterly Quarterly Maturity date December 4, 2032 May 15, 2033 Redeemable by issuer Yes Yes TRUST PREFERRED SECURITIES Issuance date December 4, 2002 May 15, 2003 Securities issued 17,500 22,500 Liquidation preference per security $ 1 $ 1 Liquidation value $ 17,500 $ 22,500 Coupon rate LIBOR + LIBOR + Distribution payable Quarterly Quarterly Distribution guaranteed by (4) Atlantic American Corporation Atlantic American Corporation (1) For each of the respective debentures, the Company has the right at any time, and from time to time, to defer payments of interest on the Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters up to the debentures’ respective maturity dates. During any such period, interest will continue to accrue and the Company may not declare or pay any cash dividends or distributions on, or purchase, the Company’s common stock nor make any principal, interest or premium payments on or repurchase any debt securities that rank equally with or junior to the Junior Subordinated Debentures. The Company has the right at any time to dissolve each of the trusts and cause the Junior Subordinated Debentures to be distributed to the holders of the Trust Preferred Securities. (2) The Junior Subordinated Debentures are unsecured and rank junior and subordinate in right of payment to all senior debt of the Parent and are effectively subordinated to all existing and future liabilities of its subsidiaries. (3) On August 4, 2014, the Company acquired $7,500 of the Junior Subordinated Debentures. (4) The Parent has guaranteed, on a subordinated basis, all of the obligations under the Trust Preferred Securities, including payment of the redemption price and any accumulated and unpaid distributions to the extent of available funds and upon dissolution, winding up or liquidation. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings (Loss) Per Common Share [Abstract] | |
Earnings (Loss) Per Common Share | Note 7. Earnings (Loss) Per Common Share A reconciliation of the numerator and denominator used in the earnings (loss) per common share calculations is as follows: Three Months Ended March 31, 2022 Income Weighted Average Shares (In thousands) Per Share Amount Basic Earnings Per Common Share: Net income $ 2,842 20,380 Less preferred stock dividends (99 ) — Net income applicable to common shareholders 2,743 20,380 $ 0.13 Diluted Earnings Per Common Share: Effect of Series D preferred stock 99 1,378 Net income applicable to common shareholders $ 2,842 21,758 $ 0.13 Three Months Ended March 31, 2021 Loss Weighted Average Shares (In thousands) Per Share Amount Basic and Diluted Loss Per Common Share: Net loss $ (431 ) 20,415 Less preferred stock dividends (99 ) — Net loss applicable to common shareholders $ (530 ) 20,415 (0.03 ) The assumed conversion of the Company’s Series D preferred stock was excluded from the loss per common share calculation for three month period ended March 31, 2021 since its impact would have been antidilutive. |
Equity Incentive Plan
Equity Incentive Plan | 3 Months Ended |
Mar. 31, 2022 | |
Equity Incentive Plan [Abstract] | |
Equity Incentive Plan | Note 8. Equity Incentive 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 three month period ended March 31, 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 for 2022 and 2021 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 one |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Taxes [Abstract] | |
Income Taxes | Note 9. 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: Three Months Ended March 31, 2022 2021 Federal income tax provision at statutory rate of 21 $ 797 $ (115 ) Dividends-received deduction (6 ) (9 ) Meals and entertainment 10 4 Parking disallowance 4 4 Penalties and fines 149 — Income tax expense (benefit) $ 954 $ (116 ) The components of income tax expense (benefit) were: Three Months Ended March 31, 2022 2021 Current – Federal $ 68 $ 376 Deferred – Federal 886 (492 ) Total $ 954 $ (116 ) |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 10. 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 three months ended March 31, 2022 and March 31, 2021 was $254. Additional information regarding the Company’s real estate operating leases is as follows: Three Months Ended March 31, Other information on operating leases: 2022 2021 Cash payments included in the measurement of lease liabilities reported in operating cash flows $ 255 $ 251 Right-of-use assets included in other assets 3,963 4,664 Weighted average discount rate 6.8 % 6.8 % Weighted average remaining lease term in years 4.6 years 5.6 years The following table presents maturities and present value of the Company’s lease liabilities: Lease Liability Remainder of 2022 $ 776 2023 1,048 2024 1,065 2025 1,083 2026 942 Thereafter — Total undiscounted lease payments 4,914 Less: present value adjustment 717 Operating lease liability included in accounts payable and accrued expenses $ 4,197 As of March 31, 2022, the Company has no operating leases that have not yet commenced. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 11. 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. Subsequent to March 31, 2022, the Company agreed to settle the matter through a consent order which included a penalty that has been recorded as a liability in the financial statements as of March 31, 2022. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Information [Abstract] | |
Segment Information | Note 12. 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. Assets March 31, 2022 December 31, 2021 American Southern $ 141,480 $ 161,788 Bankers Fidelity 217,617 227,395 Corporate and Other 15,934 13,103 Total assets $ 375,031 $ 402,286 Three Months Ended March 31, Revenues 2022 2021 American Southern $ 18,506 $ 17,526 Bankers Fidelity 32,889 31,540 Corporate and Other 213 9 Total revenue $ 51,608 $ 49,075 Three Months Ended March 31, Income (Loss) Before Income Taxes 2022 2021 American Southern $ 2,085 $ 1,490 Bankers Fidelity 3,451 134 Corporate and Other (1,740 ) (2,171 ) Income (loss) before income taxes $ 3,796 $ (547 ) |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Policies) | 3 Months Ended |
Mar. 31, 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)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Investments [Abstract] | |
Investments Aggregated by Type and Industry | Fixed maturities were comprised of the following: March 31, 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 $ 47,852 $ 172 $ 2,098 $ 49,778 Obligations of states and political subdivisions 11,058 228 63 10,893 Corporate securities: Utilities and telecom 27,051 955 695 26,791 Financial services 65,895 1,868 1,250 65,277 Other business – diversified 36,107 1,255 823 35,675 Other consumer – diversified 51,832 1,701 714 50,845 Total corporate securities 180,885 5,779 3,482 178,588 Redeemable preferred stocks: Other consumer – diversified 243 50 — 193 Total redeemable preferred stocks 243 50 — 193 Total fixed maturities $ 240,038 $ 6,229 $ 5,643 $ 239,452 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 $ 50,298 $ 763 $ 416 $ 49,951 Obligations of states and political subdivisions 11,644 749 — 10,895 Corporate securities: Utilities and telecom 29,717 2,961 44 26,800 Financial services 70,921 6,759 48 64,210 Other business – diversified 40,216 4,631 106 35,691 Other consumer – diversified 57,940 7,185 103 50,858 Total corporate securities 198,794 21,536 301 177,559 Redeemable preferred stocks: Other consumer – diversified 250 58 — 192 Total redeemable preferred stocks 250 58 — 192 Total fixed maturities $ 260,986 $ 23,106 $ 717 $ 238,597 Bonds having an amortized cost of $10,879 and $11,169 and included in the tables above were on deposit with insurance regulatory authorities as of March 31, 2022 and December 31, 2021, respectively, in accordance with statutory requirements. Additionally, bonds having an amortized cost of $4,762 and $5,371 and included in the tables above were pledged as collateral to the Federal Home Loan Bank of Atlanta (“FHLB”) at March 31, 2022 and December 31, 2021, respectively. Equity securities were comprised of the following: March 31, 2022 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Cost or Amortized Cost Equity securities: Common and non-redeemable preferred stocks: Financial services $ 878 $ 605 $ — $ 273 Other business – diversified 20,438 15,805 — 4,633 Total equity securities $ 21,316 $ 16,410 $ — $ 4,906 December 31, 2021 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Cost or Amortized Cost Equity securities: Common and non-redeemable preferred stocks: Financial services $ 799 525 — 274 Other business – diversified 18,325 13,692 — 4,633 Total equity securities $ 19,124 $ 14,217 $ — $ 4,907 |
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 March 31, 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. March 31, 2022 December 31, 2021 Carrying Value Amortized Cost Carrying Value Amortized Cost Due in one year or less $ 1,407 $ 1,403 $ 1,734 $ 1,730 Due after one year through five years 29,051 28,969 24,926 23,593 Due after five years through ten years 65,067 65,159 73,725 68,338 Due after ten years 107,568 105,175 122,045 106,181 Asset backed securities 36,945 38,746 38,556 38,755 Totals $ 240,038 $ 239,452 $ 260,986 $ 238,597 |
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 March 31, 2022 and December 31, 2021. March 31, 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 $ 33,399 $ 1,555 $ 5,041 $ 543 $ 38,440 $ 2,098 Obligations of states and political subdivisions 3,394 63 — — 3,394 63 Corporate securities 65,680 2,732 4,978 750 70,658 3,482 Total temporarily impaired securities $ 102,473 $ 4,350 $ 10,019 $ 1,293 $ 112,492 $ 5,643 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 $ 30,141 $ 416 $ — $ — $ 30,141 $ 416 Corporate securities 3,326 49 4,761 252 8,087 301 Total temporarily impaired securities $ 33,467 $ 465 $ 4,761 $ 252 $ 38,228 $ 717 |
Summary of Realized Investment Gains | The following table is a summary of realized investment gains (losses) for the three month period ended March 31, 2022 and 2021. Three Months Ended March 31, 2022 Fixed Maturities Equity Securities Other Invested Assets Total Gains $ — $ — $ — $ — Losses (10 ) — — (10 ) Realized investment losses, net $ (10 ) $ — $ — $ (10 ) Three Months Ended March 31, 2021 Fixed Maturities Equity Securities Other Invested Assets Total Gains $ 121 $ — $ — $ 121 Losses — — — — Realized investment gains, net $ 121 $ — $ — $ 121 |
Unrealized Gains (Losses) on Equity Securities | The following table presents the portion of unrealized gains related to equity securities still held for the three month period ended March 31, 2022 and 2021. Three Months Ended March 31, 2022 2021 Net realized and unrealized gains recognized during the period on equity securities $ 2,193 $ 744 Less: Net realized gains recognized during the period on equity securities sold during the period — — Unrealized gains recognized during the reporting period on equity securities, net $ 2,193 $ 744 |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Values of Financial Instruments [Abstract] | |
Financial Instruments Carried at Fair Value Measured on a Recurring Basis | As of March 31, 2022, financial instruments carried at fair value were measured on a recurring basis as summarized below: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Fixed maturities $ — $ 240,038 $ — $ 240,038 Equity securities 21,160 — 156 21,316 Cash equivalents 11,534 — — 11,534 Total $ 32,694 $ 240,038 $ 156 $ 272,888 As of December 31, 2021, financial instruments carried at fair value were measured on a recurring basis as summarized below: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Fixed maturities $ 250 $ 260,486 $ 250 $ 260,986 Equity securities 18,967 — 157 19,124 Cash equivalents 12,713 — — 12,713 Total $ 31,930 $ 260,486 $ 407 $ 292,823 |
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 March 31, 2022 and December 31, 2021. March 31, 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 $ 15,612 $ 15,612 $ 24,753 $ 24,753 Fixed maturities (1) 240,038 240,038 260,986 260,986 Equity securities (1) 21,316 21,316 19,124 19,124 Other invested assets Level 3 420 420 198 198 Policy loans Level 2 1,814 1,814 1,858 1,858 Investment in unconsolidated trusts Level 2 1,238 1,238 1,238 1,238 Liabilities: Junior subordinated debentures, net Level 2 33,738 33,115 33,738 33,728 (1) See the aforementioned information for a description of the fair value hierarchy as well as a disclosure of levels for classes of these financial assets. |
Insurance Reserves for Losses_2
Insurance Reserves for Losses and Claims (Tables) | 3 Months Ended |
Mar. 31, 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 three months ended March 31, 2022 and 2021 is as follows: Three Months Ended March 31, 2022 2021 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: Current accident year 32,542 32,928 Prior accident year development (1) (1,523 ) (2) 475 (3) Total incurred 31,019 33,403 Paid related to: Current accident year 10,629 10,917 Prior accident years 19,966 20,984 Total paid 30,595 31,901 Ending insurance reserves for losses and claims, net 68,354 63,049 Plus: Reinsurance recoverable on unpaid losses 16,881 18,236 Ending insurance reserves for losses and claims, gross $ 85,235 $ 81,285 (1) In establishing property and casualty reserves, the Company initially reserves for losses at the higher end of the reasonable range if no other value within the range is determined to be more probable. Selection of such an initial loss estimate is an attempt by management to give recognition that initial claims information received generally is not conclusive with respect to legal liability, is generally not comprehensive with respect to magnitude of loss and generally, based on historical experience, will develop more adversely as time passes and more information becomes available. Accordingly, the Company generally experiences reserve redundancies when analyzing the development of prior year losses in a current period. (2) Prior years’ development was primarily the result of favorable development in both the life and health and the property and casualty operations. (3) Prior years’ development was primarily the result of unfavorable development in the loss and claim reserves for the Medicare supplement line of business in Bankers Fidelity. Partially offsetting the unfavorable development was favorable development in the property and casualty operations. |
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: Three Months Ended March 31, 2022 2021 Total incurred losses $ 31,019 $ 33,403 Cash surrender value and matured endowments 362 247 Benefit reserve changes (212 ) (378 ) Total insurance benefits and losses incurred $ 31,169 $ 33,272 |
Credit Arrangements (Tables)
Credit Arrangements (Tables) | 3 Months Ended |
Mar. 31, 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 March 31, 2022 was as follows: Atlantic American Statutory Trust I Atlantic American Statutory Trust II JUNIOR SUBORDINATED DEBENTURES (1) (2) Principal amount owed March 31, 2022 $ 18,042 $ 23,196 Less: Treasury debt (3) — (7,500 ) Net balance March 31, 2022 $ 18,042 $ 15,696 Net balance December 31, 2021 $ 18,042 $ 15,696 Coupon rate LIBOR + LIBOR + Interest payable Quarterly Quarterly Maturity date December 4, 2032 May 15, 2033 Redeemable by issuer Yes Yes TRUST PREFERRED SECURITIES Issuance date December 4, 2002 May 15, 2003 Securities issued 17,500 22,500 Liquidation preference per security $ 1 $ 1 Liquidation value $ 17,500 $ 22,500 Coupon rate LIBOR + LIBOR + Distribution payable Quarterly Quarterly Distribution guaranteed by (4) Atlantic American Corporation Atlantic American Corporation (1) For each of the respective debentures, the Company has the right at any time, and from time to time, to defer payments of interest on the Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters up to the debentures’ respective maturity dates. During any such period, interest will continue to accrue and the Company may not declare or pay any cash dividends or distributions on, or purchase, the Company’s common stock nor make any principal, interest or premium payments on or repurchase any debt securities that rank equally with or junior to the Junior Subordinated Debentures. The Company has the right at any time to dissolve each of the trusts and cause the Junior Subordinated Debentures to be distributed to the holders of the Trust Preferred Securities. (2) The Junior Subordinated Debentures are unsecured and rank junior and subordinate in right of payment to all senior debt of the Parent and are effectively subordinated to all existing and future liabilities of its subsidiaries. (3) On August 4, 2014, the Company acquired $7,500 of the Junior Subordinated Debentures. (4) The Parent has guaranteed, on a subordinated basis, all of the obligations under the Trust Preferred Securities, including payment of the redemption price and any accumulated and unpaid distributions to the extent of available funds and upon dissolution, winding up or liquidation. |
Earnings (Loss) Per Common Sh_2
Earnings (Loss) Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 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: Three Months Ended March 31, 2022 Income Weighted Average Shares (In thousands) Per Share Amount Basic Earnings Per Common Share: Net income $ 2,842 20,380 Less preferred stock dividends (99 ) — Net income applicable to common shareholders 2,743 20,380 $ 0.13 Diluted Earnings Per Common Share: Effect of Series D preferred stock 99 1,378 Net income applicable to common shareholders $ 2,842 21,758 $ 0.13 Three Months Ended March 31, 2021 Loss Weighted Average Shares (In thousands) Per Share Amount Basic and Diluted Loss Per Common Share: Net loss $ (431 ) 20,415 Less preferred stock dividends (99 ) — Net loss applicable to common shareholders $ (530 ) 20,415 (0.03 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 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: Three Months Ended March 31, 2022 2021 Federal income tax provision at statutory rate of 21 $ 797 $ (115 ) Dividends-received deduction (6 ) (9 ) Meals and entertainment 10 4 Parking disallowance 4 4 Penalties and fines 149 — Income tax expense (benefit) $ 954 $ (116 ) |
Components of Income Tax Expense | The components of income tax expense (benefit) were: Three Months Ended March 31, 2022 2021 Current – Federal $ 68 $ 376 Deferred – Federal 886 (492 ) Total $ 954 $ (116 ) |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Additional Information of Operating Leases | Additional information regarding the Company’s real estate operating leases is as follows: Three Months Ended March 31, Other information on operating leases: 2022 2021 Cash payments included in the measurement of lease liabilities reported in operating cash flows $ 255 $ 251 Right-of-use assets included in other assets 3,963 4,664 Weighted average discount rate 6.8 % 6.8 % Weighted average remaining lease term in years 4.6 years 5.6 years |
Maturities and Present Value of Lease Liabilities | The following table presents maturities and present value of the Company’s lease liabilities: Lease Liability Remainder of 2022 $ 776 2023 1,048 2024 1,065 2025 1,083 2026 942 Thereafter — Total undiscounted lease payments 4,914 Less: present value adjustment 717 Operating lease liability included in accounts payable and accrued expenses $ 4,197 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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. Assets March 31, 2022 December 31, 2021 American Southern $ 141,480 $ 161,788 Bankers Fidelity 217,617 227,395 Corporate and Other 15,934 13,103 Total assets $ 375,031 $ 402,286 Three Months Ended March 31, Revenues 2022 2021 American Southern $ 18,506 $ 17,526 Bankers Fidelity 32,889 31,540 Corporate and Other 213 9 Total revenue $ 51,608 $ 49,075 Three Months Ended March 31, Income (Loss) Before Income Taxes 2022 2021 American Southern $ 2,085 $ 1,490 Bankers Fidelity 3,451 134 Corporate and Other (1,740 ) (2,171 ) Income (loss) before income taxes $ 3,796 $ (547 ) |
Basis of Presentation (Details)
Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2022Segment | |
Basis of Presentation [Abstract] | |
Number of business units | 2 |
Investments, Aggregated by Type
Investments, Aggregated by Type and Industry (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | $ 240,038 | $ 260,986 |
Amortized cost total | 239,452 | 238,597 |
Estimated fair value | 21,316 | 19,124 |
Cost | 4,906 | 4,907 |
Amortized cost of bonds on deposit with insurance regulatory authorities | 10,879 | 11,169 |
Amortized cost pledged as collateral to FHLB | 4,762 | 5,371 |
Fixed Maturities [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 240,038 | 260,986 |
Gross unrealized gains | 6,229 | 23,106 |
Gross unrealized losses | 5,643 | 717 |
Amortized cost total | 239,452 | 238,597 |
U.S. Treasury Securities and Obligations of U.S. Government Agencies and Authorities [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 47,852 | 50,298 |
Gross unrealized gains | 172 | 763 |
Gross unrealized losses | 2,098 | 416 |
Amortized cost total | 49,778 | 49,951 |
Obligations of States and Political Subdivisions [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 11,058 | 11,644 |
Gross unrealized gains | 228 | 749 |
Gross unrealized losses | 63 | 0 |
Amortized cost total | 10,893 | 10,895 |
Corporate Securities [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 180,885 | 198,794 |
Gross unrealized gains | 5,779 | 21,536 |
Gross unrealized losses | 3,482 | 301 |
Amortized cost total | 178,588 | 177,559 |
Corporate Securities [Member] | Utilities and Telecom [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 27,051 | 29,717 |
Gross unrealized gains | 955 | 2,961 |
Gross unrealized losses | 695 | 44 |
Amortized cost total | 26,791 | 26,800 |
Corporate Securities [Member] | Financial Services [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 65,895 | 70,921 |
Gross unrealized gains | 1,868 | 6,759 |
Gross unrealized losses | 1,250 | 48 |
Amortized cost total | 65,277 | 64,210 |
Corporate Securities [Member] | Other Business - Diversified [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 36,107 | 40,216 |
Gross unrealized gains | 1,255 | 4,631 |
Gross unrealized losses | 823 | 106 |
Amortized cost total | 35,675 | 35,691 |
Corporate Securities [Member] | Other Consumer - Diversified [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 51,832 | 57,940 |
Gross unrealized gains | 1,701 | 7,185 |
Gross unrealized losses | 714 | 103 |
Amortized cost total | 50,845 | 50,858 |
Redeemable Preferred Stocks [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 243 | 250 |
Gross unrealized gains | 50 | 58 |
Gross unrealized losses | 0 | 0 |
Amortized cost total | 193 | 192 |
Redeemable Preferred Stocks [Member] | Other Consumer - Diversified [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 243 | 250 |
Gross unrealized gains | 50 | 58 |
Gross unrealized losses | 0 | 0 |
Amortized cost total | 193 | 192 |
Equity Securities [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 21,316 | 19,124 |
Gross unrealized gains | 16,410 | 14,217 |
Gross unrealized losses | 0 | 0 |
Cost | 4,906 | 4,907 |
Common and Non-redeemable Preferred Stocks [Member] | Financial Services [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 878 | 799 |
Gross unrealized gains | 605 | 525 |
Gross unrealized losses | 0 | 0 |
Cost | 273 | 274 |
Common and Non-redeemable Preferred Stocks [Member] | Other Business - Diversified [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 20,438 | 18,325 |
Gross unrealized gains | 15,805 | 13,692 |
Gross unrealized losses | 0 | 0 |
Cost | $ 4,633 | $ 4,633 |
Investments, Fixed Maturities b
Investments, Fixed Maturities by Contractual Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Carrying Value [Abstract] | ||
Due in one year or less | $ 1,407 | $ 1,734 |
Due after one year through five years | 29,051 | 24,926 |
Due after five years through ten years | 65,067 | 73,725 |
Due after ten years | 107,568 | 122,045 |
Asset backed securities | 36,945 | 38,556 |
Carrying value total | 240,038 | 260,986 |
Amortized Cost [Abstract] | ||
Due in one year or less | 1,403 | 1,730 |
Due after one year through five years | 28,969 | 23,593 |
Due after five years through ten years | 65,159 | 68,338 |
Due after ten years | 105,175 | 106,181 |
Asset backed securities | 38,746 | 38,755 |
Amortized cost total | $ 239,452 | $ 238,597 |
Investments, Securities with Co
Investments, Securities with Continuous Unrealized Loss Position (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)Securities | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)Securities | |
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract] | |||
Less than 12 months | $ 102,473 | $ 33,467 | |
12 months or longer | 10,019 | 4,761 | |
Total | 112,492 | 38,228 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract] | |||
Less than 12 months | 4,350 | 465 | |
12 months or longer | 1,293 | 252 | |
Total | 5,643 | $ 717 | |
Gross OTTI losses charged to realized gains | $ 0 | $ 0 | |
Number of securities in unrealized loss position | Securities | 141 | 61 | |
U.S. Treasury Securities and Obligations of U.S. Government Agencies and Authorities [Member] | |||
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract] | |||
Less than 12 months | $ 33,399 | $ 30,141 | |
12 months or longer | 5,041 | 0 | |
Total | 38,440 | 30,141 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract] | |||
Less than 12 months | 1,555 | 416 | |
12 months or longer | 543 | 0 | |
Total | 2,098 | 416 | |
Obligations of States and Political Subdivisions [Member] | |||
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract] | |||
Less than 12 months | 3,394 | ||
12 months or longer | 0 | ||
Total | 3,394 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract] | |||
Less than 12 months | 63 | ||
12 months or longer | 0 | ||
Total | 63 | ||
Corporate Securities [Member] | |||
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract] | |||
Less than 12 months | 65,680 | 3,326 | |
12 months or longer | 4,978 | 4,761 | |
Total | 70,658 | 8,087 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract] | |||
Less than 12 months | 2,732 | 49 | |
12 months or longer | 750 | 252 | |
Total | $ 3,482 | $ 301 |
Investments, Summary of Realize
Investments, Summary of Realized Investment Gains (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Summary of realized investment gains [Abstract] | ||
Gains | $ 0 | $ 121 |
Losses | (10) | 0 |
Realized investment Losses (gains), net | (10) | 121 |
Fixed Maturities [Member] | ||
Summary of realized investment gains [Abstract] | ||
Gains | 0 | 121 |
Losses | (10) | 0 |
Realized investment Losses (gains), net | (10) | 121 |
Equity Securities [Member] | ||
Summary of realized investment gains [Abstract] | ||
Gains | 0 | 0 |
Losses | 0 | 0 |
Realized investment Losses (gains), net | 0 | 0 |
Other Invested Assets [Member] | ||
Summary of realized investment gains [Abstract] | ||
Gains | 0 | 0 |
Losses | 0 | 0 |
Realized investment Losses (gains), net | $ 0 | $ 0 |
Investments, Unrealized Gains (
Investments, Unrealized Gains (Losses) on Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Investments [Abstract] | ||
Net realized and unrealized gains recognized during the period on equity securities | $ 2,193 | $ 744 |
Less: Net realized gains recognized during the period on equity securities sold during the period | 0 | 0 |
Unrealized gains recognized during the reporting period on equity securities, net | $ 2,193 | $ 744 |
Investments, Variable Interest
Investments, Variable Interest Entities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Variable Interest Entities [Abstract] | ||
Carrying amount of interest | $ 420 | $ 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 | 420 | 198 |
Investment in unconsolidated trusts | 1,238 | 1,238 |
Maximum loss exposure | 1,658 | 1,436 |
Outstanding commitments | $ 12,777 | $ 1,997 |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments, Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Financial instruments carried at fair value measured on a recurring basis [Abstract] | ||
Fixed maturities | $ 240,038 | $ 260,986 |
Equity securities | 21,316 | 19,124 |
Recurring [Member] | ||
Financial instruments carried at fair value measured on a recurring basis [Abstract] | ||
Fixed maturities | 240,038 | 260,986 |
Equity securities | 21,316 | 19,124 |
Cash equivalents | 11,534 | 12,713 |
Assets at fair value | 272,888 | 292,823 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Financial instruments carried at fair value measured on a recurring basis [Abstract] | ||
Fixed maturities | 0 | 250 |
Equity securities | 21,160 | 18,967 |
Cash equivalents | 11,534 | 12,713 |
Assets at fair value | 32,694 | 31,930 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Financial instruments carried at fair value measured on a recurring basis [Abstract] | ||
Fixed maturities | 240,038 | 260,486 |
Equity securities | 0 | 0 |
Cash equivalents | 0 | 0 |
Assets at fair value | 240,038 | 260,486 |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Financial instruments carried at fair value measured on a recurring basis [Abstract] | ||
Fixed maturities | 0 | 250 |
Equity securities | 156 | 157 |
Cash equivalents | 0 | 0 |
Assets at fair value | $ 156 | $ 407 |
Fair Values of Financial Inst_4
Fair Values of Financial Instruments, Estimated Fair Value and Level (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Assets [Abstract] | |||
Fixed maturities | $ 240,038 | $ 260,986 | |
Equity securities | 21,316 | 19,124 | |
Carrying Amount [Member] | |||
Assets [Abstract] | |||
Fixed maturities | [1] | 240,038 | 260,986 |
Equity securities | [1] | 21,316 | 19,124 |
Carrying Amount [Member] | Level 1 [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | 15,612 | 24,753 | |
Carrying Amount [Member] | Level 2 [Member] | |||
Assets [Abstract] | |||
Policy loans | 1,814 | 1,858 | |
Investment in unconsolidated trusts | 1,238 | 1,238 | |
Liabilities [Abstract] | |||
Junior subordinated debentures, net | 33,738 | 33,738 | |
Carrying Amount [Member] | Level 3 [Member] | |||
Assets [Abstract] | |||
Other invested assets | 420 | 198 | |
Estimated Fair Value [Member] | |||
Assets [Abstract] | |||
Fixed maturities | [1] | 240,038 | 260,986 |
Equity securities | [1] | 21,316 | 19,124 |
Estimated Fair Value [Member] | Level 1 [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | 15,612 | 24,753 | |
Estimated Fair Value [Member] | Level 2 [Member] | |||
Assets [Abstract] | |||
Policy loans | 1,814 | 1,858 | |
Investment in unconsolidated trusts | 1,238 | 1,238 | |
Liabilities [Abstract] | |||
Junior subordinated debentures, net | 33,115 | 33,728 | |
Estimated Fair Value [Member] | Level 3 [Member] | |||
Assets [Abstract] | |||
Other invested assets | $ 420 | $ 198 | |
[1] | See the aforementioned information for a description of the fair value hierarchy as well as a disclosure of levels for classes of these financial assets. |
Insurance Reserves for Losses_3
Insurance Reserves for Losses and Claims (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 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 | 32,542 | 32,928 | |||
Prior accident year development | [1] | (1,523) | [2] | 475 | [3] |
Total incurred | 31,019 | 33,403 | |||
Paid related to [Abstract] | |||||
Current accident year | 10,629 | 10,917 | |||
Prior accident years | 19,966 | 20,984 | |||
Total paid | 30,595 | 31,901 | |||
Ending insurance reserves for losses and claims, net | 68,354 | 63,049 | |||
Plus: Reinsurance recoverable on unpaid losses | 16,881 | 18,236 | |||
Ending insurance reserves for losses and claims, gross | 85,235 | 81,285 | |||
Reconciliation of total incurred claims to total insurance benefits and losses incurred [Abstract] | |||||
Total incurred losses | 31,019 | 33,403 | |||
Cash surrender value and matured endowments | 362 | 247 | |||
Benefit reserve changes | (212) | (378) | |||
Total insurance benefits and losses incurred | $ 31,169 | $ 33,272 | |||
[1] | In establishing property and casualty reserves, the Company initially reserves for losses at the higher end of the reasonable range if no other value within the range is determined to be more probable. Selection of such an initial loss estimate is an attempt by management to give recognition that initial claims information received generally is not conclusive with respect to legal liability, is generally not comprehensive with respect to magnitude of loss and generally, based on historical experience, will develop more adversely as time passes and more information becomes available. Accordingly, the Company generally experiences reserve redundancies when analyzing the development of prior year losses in a current period. | ||||
[2] | Prior years’ development was primarily the result of favorable development in both the life and health and the property and casualty operations. | ||||
[3] | Prior years’ development was primarily the result of unfavorable development in the loss and claim reserves for the Medicare supplement line of business in Bankers Fidelity. Partially offsetting the unfavorable development was favorable development in the property and casualty operations. |
Credit Arrangements, Bank Debt
Credit Arrangements, Bank Debt (Details) - Revolving Credit Facility [Member] | May 12, 2021USD ($) | Mar. 31, 2022USD ($) |
Bank Debt [Abstract] | ||
Unsecured credit facility | $ 10,000,000 | |
Maturity date | Apr. 12, 2024 | |
Outstanding borrowings | $ 0 | |
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 Sub
Credit Arrangements, Junior Subordinated Debentures (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)TrustQuarter$ / sharesshares | ||
Debt Instruments [Abstract] | ||
Number of Connecticut statutory business trusts | Trust | 2 | |
Financial structure of statutory business trusts [Abstract] | ||
Net balance March 31, 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 March 31, 2022 | $ 18,042 | [1],[2] |
Less: Treasury debt | 0 | [1],[2],[3] |
Net balance March 31, 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. 4, 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. 4, 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 March 31, 2022 | $ 23,196 | [1],[2] |
Less: Treasury debt | (7,500) | [1],[2],[3] |
Net balance March 31, 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% | |
[1] | For each of the respective debentures, the Company has the right at any time, and from time to time, to defer payments of interest on the Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters up to the debentures’ respective maturity dates. During any such period, interest will continue to accrue and the Company may not declare or pay any cash dividends or distributions on, or purchase, the Company’s common stock nor make any principal, interest or premium payments on or repurchase any debt securities that rank equally with or junior to the Junior Subordinated Debentures. The Company has the right at any time to dissolve each of the trusts and cause the Junior Subordinated Debentures to be distributed to the holders of the Trust Preferred Securities. | |
[2] | The Junior Subordinated Debentures are unsecured and rank junior and subordinate in right of payment to all senior debt of the Parent and are effectively subordinated to all existing and future liabilities of its subsidiaries. | |
[3] | On August 4, 2014, the Company acquired $7,500 of the Junior Subordinated Debentures. | |
[4] | The Parent has guaranteed, on a subordinated basis, all of the obligations under the Trust Preferred Securities, including payment of the redemption price and any accumulated and unpaid distributions to the extent of available funds and upon dissolution, winding up or liquidation. |
Earnings (Loss) Per Common Sh_3
Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Basic Earnings (Loss) Per Common Share [Abstract] | ||
Net Income (loss) | $ 2,842 | $ (431) |
Less: preferred stock dividends | (99) | (99) |
Net Income (loss) applicable to common shareholders | 2,743 | (530) |
Diluted Earnings Per Common Share: [Abstract] | ||
Effect of Series D preferred stock | 99 | |
Net income applicable to common shareholders | $ 2,842 | $ (530) |
Weighted Average Shares [Abstract] | ||
Weighted average shares outstanding, Basic (in shares) | 20,380 | 20,415 |
Effect of Series D preferred stock (in shares) | 1,378 | |
Weighted average shares outstanding, Diluted (in shares) | 21,758 | 20,415 |
Per Share Amount [Abstract] | ||
Net income (loss) applicable to common shareholders, Basic (in dollars per share) | $ 0.13 | $ (0.03) |
Net income (loss) applicable to common shareholders, Diluted (in dollars per share) | $ 0.13 | $ (0.03) |
Equity Incentive Plan (Details)
Equity Incentive Plan (Details) - Plan 2012 [Member] - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
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) | 910,200 | 935,200 |
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 |
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 | |
Restricted Stock [Member] | Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Abstract] | ||
Vesting period | 1 year | |
Restricted Stock [Member] | Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Abstract] | ||
Vesting period | 3 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Reconciliation of income tax expense (benefit) [Abstract] | ||
Federal income tax provision at statutory rate of 21% | $ 797 | $ (115) |
Dividends-received deduction | (6) | (9) |
Meals and entertainment | 10 | 4 |
Parking disallowance | 4 | 4 |
Penalties and fines | 149 | 0 |
Income tax expense (benefit) | $ 954 | (116) |
Federal statutory income tax rate | 21.00% | |
Components of income tax expense (benefit) [Abstract] | ||
Current - Federal | $ 68 | 376 |
Deferred - Federal | 886 | (492) |
Income tax expense (benefit) | $ 954 | $ (116) |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)Lease | Mar. 31, 2021USD ($) | |
Lease description [Abstract] | ||
Number of operating lease agreements | Lease | 2 | |
Lease expense | $ 254 | $ 254 |
Other information on operating leases [Abstract] | ||
Cash payments included in the measurement of lease liabilities reported in operating cash flows | 255 | 251 |
Right-of-use assets included in other assets on the consolidated balance sheet | $ 3,963 | $ 4,664 |
Weighted average discount rate | 6.80% | 6.80% |
Weighted average remaining lease term in years | 4 years 7 months 6 days | 5 years 7 months 6 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 | $ 776 | |
2022 | 1,048 | |
2023 | 1,065 | |
2024 | 1,083 | |
2025 | 942 | |
Thereafter | 0 | |
Total undiscounted lease payments | 4,914 | |
Less: present value adjustment | 717 | |
Operating lease liability included in accounts payable and accrued expenses on the condensed consolidated balance sheet | $ 4,197 | |
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)
Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)Segment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Segment Information [Abstract] | |||
Number of business units | Segment | 2 | ||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | $ 375,031 | $ 402,286 | |
Revenues | 51,608 | $ 49,075 | |
Income (loss) before income taxes | 3,796 | (547) | |
Operating Segments [Member] | American Southern [Member] | |||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | 141,480 | 161,788 | |
Revenues | 18,506 | 17,526 | |
Income (loss) before income taxes | 2,085 | 1,490 | |
Operating Segments [Member] | Bankers Fidelity [Member] | |||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | 217,617 | 227,395 | |
Revenues | 32,889 | 31,540 | |
Income (loss) before income taxes | 3,451 | 134 | |
Corporate and Other [Member] | |||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | 15,934 | $ 13,103 | |
Revenues | 213 | 9 | |
Income (loss) before income taxes | $ (1,740) | $ (2,171) |