Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2024 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2024 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2024 |
Document Fiscal Period Focus | Q1 |
Document Transition Report | false |
Entity File Number | 0-3722 |
Entity Registrant Name | ATLANTIC AMERICAN CORP |
Entity Central Index Key | 0000008177 |
Entity Incorporation, State or Country Code | GA |
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 |
Title of 12(b) Security | Common Stock, par value $1.00 per share |
Trading Symbol | AAME |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 20,399,758 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
ASSETS | ||
Cash and cash equivalents | $ 21,189 | $ 28,301 |
Investments: | ||
Fixed maturities, available-for-sale, at fair value (amortized cost: $241,315 and $238,626; no allowance for credit losses) | 218,420 | 218,219 |
Equity securities, at fair value (cost: $4,940 and $4,936) | 9,303 | 9,413 |
Other invested assets (cost: $6,982 and $6,982) | 6,278 | 6,381 |
Policy loans | 1,810 | 1,778 |
Real estate | 38 | 38 |
Investment in unconsolidated trusts | 1,238 | 1,238 |
Total investments | 237,087 | 237,067 |
Receivables: | ||
Reinsurance (net of allowance for expected credit losses of $56 and $61) | 20,935 | 21,103 |
Insurance premiums and other (net of allowance for expected credit losses of $216 and $217) | 14,696 | 23,690 |
Deferred income taxes, net | 16,712 | 15,682 |
Deferred acquisition costs | 43,167 | 43,850 |
Other assets | 9,421 | 9,028 |
Intangibles | 2,544 | 2,544 |
Total assets | 365,751 | 381,265 |
Insurance reserves and policyholder funds: | ||
Future policy benefits | 93,680 | 92,495 |
Unearned premiums | 20,723 | 31,317 |
Losses and claims | 88,449 | 87,478 |
Other policy liabilities | 970 | 1,132 |
Total insurance reserves and policyholder funds | 203,822 | 212,422 |
Accounts payable and accrued expenses | 21,364 | 24,811 |
Revolving credit facility | 4,024 | 3,019 |
Junior subordinated debenture obligations, net | 33,738 | 33,738 |
Total liabilities | 262,948 | 273,990 |
Commitments and contingencies (Note 12) | ||
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: 20,399,758 and 20,402,288 | 22,401 | 22,401 |
Additional paid-in capital | 57,425 | 57,425 |
Retained earnings | 48,425 | 50,929 |
Accumulated other comprehensive loss | (18,087) | (16,121) |
Unearned stock grant compensation | (8) | (13) |
Treasury stock, at cost: 2,001,136 and 1,998,606 shares | (7,408) | (7,401) |
Total shareholders' equity | 102,803 | 107,275 |
Total liabilities and shareholders' equity | $ 365,751 | $ 381,265 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Investments: | ||
Fixed maturities, cost | $ 241,315 | $ 238,626 |
Allowance for credit losses | 0 | 0 |
Equity securities, cost | 4,940 | 4,936 |
Other invested assets, cost | 6,982 | 6,982 |
Receivables: | ||
Reinsurance, allowance for expected credit losses | 56 | 61 |
Insurance premiums and other, allowance for expected credit losses/allowance for doubtful accounts | $ 216 | $ 217 |
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) | 20,399,758 | 20,402,288 |
Treasury stock, at cost (in shares) | 2,001,136 | 1,998,606 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue: | ||
Insurance premiums, net | $ 44,552 | $ 46,100 |
Net investment income | 2,556 | 2,541 |
Unrealized losses on equity securities, net | (114) | (2,375) |
Other income | 3 | 3 |
Total revenue | 46,997 | 46,269 |
Benefits and expenses: | ||
Insurance benefits and losses incurred | 31,925 | 30,460 |
Commissions and underwriting expenses | 12,666 | 12,918 |
Interest expense | 855 | 750 |
Other expense | 4,057 | 3,959 |
Total benefits and expenses | 49,503 | 48,087 |
Loss before income taxes | (2,506) | (1,818) |
Income tax benefit | (508) | (372) |
Net loss | (1,998) | (1,446) |
Preferred stock dividends | (99) | (99) |
Net loss applicable to common shareholders | $ (2,097) | $ (1,545) |
Loss per common share (basic) (in dollars per share) | $ (0.1) | $ (0.08) |
Loss per common share (diluted) (in dollars per share) | $ (0.1) | $ (0.08) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | ||
Net loss | $ (1,998) | $ (1,446) |
Available-for-sale fixed maturity securities: | ||
Gross unrealized holding gains (losses) arising in the period | (2,488) | 4,733 |
Related income tax effect | 522 | (994) |
Subtotal | (1,966) | 3,739 |
Total other comprehensive income (loss), net of tax | (1,966) | 3,739 |
Total comprehensive income (loss) | $ (3,964) | $ 2,293 |
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] | Retained Earnings [Member] Cumulative Effect, Period of Adoption, Adjustment [Member] | Accumulated Other Comprehensive Loss [Member] | Unearned Stock Grant Compensation [Member] | Treasury Stock [Member] | Total |
Balance, beginning of period at Dec. 31, 2022 | $ 55 | $ 22,401 | $ 57,425 | $ 51,982 | $ (75) | $ (22,149) | $ (132) | $ (7,389) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Accounting Standards Update [Extensible Enumeration] | ASU 2016-13 [Member] | ||||||||
Net loss | (1,446) | $ (1,446) | |||||||
Other comprehensive loss, net of tax | 3,739 | 3,739 | |||||||
Dividends on common stock | 0 | ||||||||
Dividends accrued on preferred stock | (99) | ||||||||
Amortization of unearned compensation | 73 | ||||||||
Net shares acquired related to employee share-based compensation plans | (6) | ||||||||
Balance, end of period at Mar. 31, 2023 | 55 | $ 22,401 | 57,425 | 50,362 | (18,410) | (59) | (7,395) | $ 104,379 | |
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, 2022 | 20,407,229 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net shares acquired under employee share-based compensation plans (in shares) | (2,530) | ||||||||
Balance, end of period (in shares) at Mar. 31, 2023 | 20,404,699 | ||||||||
Balance, beginning of period at Dec. 31, 2023 | 55 | $ 22,401 | 57,425 | 50,929 | (16,121) | (13) | (7,401) | $ 107,275 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (1,998) | (1,998) | |||||||
Other comprehensive loss, net of tax | (1,966) | (1,966) | |||||||
Dividends on common stock | (407) | ||||||||
Dividends accrued on preferred stock | (99) | ||||||||
Amortization of unearned compensation | 5 | ||||||||
Net shares acquired related to employee share-based compensation plans | (7) | ||||||||
Balance, end of period at Mar. 31, 2024 | $ 55 | $ 22,401 | $ 57,425 | $ 48,425 | $ (18,087) | $ (8) | $ (7,408) | $ 102,803 | |
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, 2023 | 20,402,288 | 20,402,288 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net shares acquired under employee share-based compensation plans (in shares) | (2,530) | ||||||||
Balance, end of period (in shares) at Mar. 31, 2024 | 20,399,758 | 20,399,758 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,998) | $ (1,446) |
Adjustments to reconcile net loss income to net cash used in operating activities: | ||
Amortization of acquisition costs, net | 683 | 22 |
Unrealized losses on equity securities, net | 114 | 2,375 |
Losses from equity method investees | 103 | 15 |
Compensation expense related to share awards | 5 | 73 |
Provision for credit losses | (6) | 0 |
Depreciation and amortization | 113 | 188 |
Deferred income tax benefit | (508) | (552) |
Decrease in receivables, net | 9,168 | 4,828 |
Decrease in insurance reserves and policyholder funds | (8,600) | (11,408) |
Decrease in accounts payable and accrued expenses | (3,950) | (5,338) |
Other, net | (443) | (367) |
Net cash used in operating activities | (5,319) | (11,610) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from investments sold | 0 | 9 |
Proceeds from investments matured, called or redeemed | 2,857 | 1,769 |
Investments purchased | (5,604) | (6,418) |
Additions to property and equipment | (39) | (59) |
Net cash used in investing activities | (2,786) | (4,699) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Treasury stock acquired - net employee share-based compensation | (7) | (6) |
Proceeds from revolving credit facility, net | 1,000 | 1,000 |
Net cash provided by financing activities | 993 | 994 |
Net decrease in cash and cash equivalents | (7,112) | (15,315) |
Cash and cash equivalents at beginning of period | 28,301 | 28,863 |
Cash and cash equivalents at end of period | 21,189 | 13,548 |
Supplemental cash flow information: | ||
Cash paid for interest | $ 856 | $ 759 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Note 1. Basis of Presentation and Significant Accounting Policies 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, Bankers Fidelity Assurance Company and Atlantic Capital Life 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, 2023 (the “2023 Annual Report”). For more information regarding Significant Accounting Policies, see the “Summary of Significant Accounting Policies” section of Note 1 of Notes to Consolidated Financial Statements in the 2023 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, 2024 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, 2024 or for any other future period. 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. To the extent that the Company changes its accounting for, or presentation of, items in the financial statements, the presentation of such amounts in prior periods is changed to conform to the current period presentation, if appropriate, and disclosed, if material. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2024 | |
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 2023 Annual Report. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2024 | |
Investments [Abstract] | |
Investments | Note 3. Investments The following tables set forth the estimated fair value, gross unrealized gains, gross unrealized losses, allowance for credit 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, 2024 and December 31, 2023. Fixed maturities were comprised of the following: March 31, 2024 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Cost or Amortized Cost Fixed maturities: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies and authorities $ 49,277 $ 53 $ 5,119 $ — $ 54,343 Obligations of states and political subdivisions 8,133 9 1,388 — 9,512 Corporate securities: Utilities and telecom 21,854 80 2,939 — 24,713 Financial services 60,733 549 5,175 — 65,359 Other business – diversified 34,105 242 3,541 — 37,404 Other consumer – diversified 44,091 31 5,731 — 49,791 Total corporate securities 160,783 902 17,386 — 177,267 Redeemable preferred stocks: Other consumer – diversified 227 34 — — 193 Total redeemable preferred stocks 227 34 — — 193 Total fixed maturities $ 218,420 $ 998 $ 23,893 $ — $ 241,315 December 31, 2023 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Cost or Amortized Cost Fixed maturities: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies and authorities $ 50,059 $ 63 $ 4,944 $ — $ 54,940 Obligations of states and political subdivisions 8,106 15 1,424 — 9,515 Corporate securities: Utilities and telecom 21,309 143 2,582 — 23,748 Financial services 59,584 560 4,931 — 63,955 Other business – diversified 34,386 403 2,940 — 36,923 Other consumer – diversified 44,570 87 4,870 — 49,353 Total corporate securities 159,849 1,193 15,323 — 173,979 Redeemable preferred stocks: Other consumer – diversified 205 13 — — 192 Total redeemable preferred stocks 205 13 — — 192 Total fixed maturities $ 218,219 $ 1,284 $ 21,691 $ — $ 238,626 Bonds having an amortized cost of $14,676 and $14,647 and included in the tables above were on deposit with insurance regulatory authorities as of March 31, 2024 and December 31, 2023, respectively, in accordance with statutory requirements. In addition, the Company maintains cash and cash equivalents on deposit with insurance regulatory authorities of $226 as of March 31, 2024 and December 31, 2023. Equity securities were comprised of the following: March 31, 2024 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Cost or Amortized Cost Equity securities: Common and non-redeemable preferred stocks: Financial services $ 1,054 $ 747 $ — $ 307 Communications 8,249 3,616 — 4,633 Total equity securities $ 9,303 $ 4,363 $ — $ 4,940 December 31, 2023 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Cost or Amortized Equity securities: Common and non-redeemable preferred stocks: Financial services $ 924 $ 621 $ — $ 303 Communications 8,489 3,856 — 4,633 Total equity securities $ 9,413 $ 4,477 $ — $ 4,936 The carrying value and amortized cost of the Company’s investments in fixed maturities at March 31, 2024 and December 31, 2023 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, 2024 December 31, 2023 Carrying Value Amortized Cost Carrying Value Amortized Cost Due in one year or less $ 6,795 $ 6,887 $ 1,715 $ 1,750 Due after one year through five years 56,898 59,181 60,423 62,423 Due after five years through ten years 32,680 35,968 33,596 36,752 Due after ten years 87,772 100,890 86,857 97,984 Asset backed securities 34,275 38,389 35,628 39,717 Totals $ 218,420 $ 241,315 $ 218,219 $ 238,626 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, 2024 and December 31, 2023. March 31, 2024 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 $ 5,161 $ 44 $ 37,250 $ 5,075 $ 42,411 $ 5,119 Obligations of states and political subdivisions 1,130 16 5,985 1,372 7,115 1,388 Corporate securities 11,793 161 136,344 17,225 148,137 17,386 Total temporarily impaired securities $ 18,084 $ 221 $ 179,579 $ 23,672 $ 197,663 $ 23,893 December 31, 2023 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 $ 5,194 $ 37 $ 39,476 $ 4,907 $ 44,670 $ 4,944 Obligations of states and political subdivisions 1,145 3 5,936 1,421 7,081 1,424 Corporate securities 539 13 138,283 15,310 138,822 15,323 Total temporarily impaired securities $ 6,878 $ 53 $ 183,695 $ 21,638 $ 190,573 $ 21,691 Analysis of Securities in Unrealized Loss Positions As of March 31, 2024 and December 31, 2023, there were 224 and 222 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 unrealized losses on the Company’s fixed maturity securities investments have been primarily related to general market changes in interest rates and/or the levels of credit spreads rather than specific concerns with the issuer’s ability to pay interest and repay principal. For any of its fixed maturity securities with significant declines in fair value, the Company performs detailed analyses to identify whether the drivers of the declines are due to general market drivers, such as the recent rise in interest rates, or due to credit-related factors. Identifying the drivers of the declines in fair value helps to focus the Company’s attention on securities with credit-related concerns that could impact the ultimate collection of principal and interest. For any significant declines in fair value determined to be non-interest rate or market related, the Company performs a more focused review of the related issuer’s specific credit profile. For corporate issuers, the Company evaluates their assets, business profile including industry dynamics and competitive positioning, financial statements and other available financial data. For non-corporate issuers, the Company analyzes all reasonably available sources of credit support, including issuer-specific factors. The Company utilizes information available in the public domain and, for certain private placement issuers, from consultations with the issuers directly. The Company also considers ratings from Nationally Recognized Statistical Rating Organizations, as well as the specific characteristics of the security it owns including seniority in the issuer’s capital structure, covenant protections, or other relevant features. From these reviews, the Company evaluates the issuers’ continued ability to service the Company’s investment through payment of interest and principal. Assuming no credit-related factors develop, unrealized gains and losses on fixed maturity securities are expected to diminish as investments near maturity. Based on its credit analysis, the Company believes that the issuers of its fixed maturity investments in the sectors shown in the table above have the ability to service their obligations to the Company, and the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. However, from time to time the Company identifies certain available-for-sale fixed maturity securities where the amortized cost basis exceeds the present value of the cash flows expected to be collected due to credit-related factors and as a result, a credit allowance will be estimated. The Company had no allowance for expected credit losses on its available-for-sale fixed maturities as of March 31, 2024 and December 31, 2023. There were no realized investment gains for the three month periods ended March 31, 2024 and 2023. The following table presents the portion of unrealized losses related to equity securities still held for the three month period ended March 31, 2024 and 2023. Three Months Ended March 31, 2024 2023 Net realized and unrealized losses recognized during the period on equity securities $ (114 ) $ (2,375 ) Less: Net realized gains recognized during the period on equity securities sold during the period — — Unrealized losses recognized during the reporting period on equity securities, net $ (114 ) $ (2,375 ) 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 $6,278 and $6,381 as of March 31, 2024 and December 31, 2023, respectively. The Company’s VIE interests, carried as a part of investment in unconsolidated trusts, totaled $1,238 as of March 31, 2024 and December 31, 2023. 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 $7,516 and $7,619, as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, the Company had outstanding commitments totaling $4,518, 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, 2024 | |
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 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 one equity security. As of March 31, 2024 and December 31, 2023, the value of the equity security valued using Level 3 criteria was $189 and $185, respectively. As of March 31, 2024, 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 $ — $ 218,420 $ — $ 218,420 Equity securities 9,114 — 189 9,303 Cash equivalents 13,309 — — 13,309 Total $ 22,423 $ 218,420 $ 189 $ 241,032 As of December 31, 2023, 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 $ — $ 218,219 $ — $ 218,219 Equity securities 9,228 — 185 9,413 Cash equivalents 14,834 — — 14,834 Total $ 24,062 $ 218,219 $ 185 $ 242,466 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, 2024 and December 31, 2023. March 31, 2024 December 31, 2023 Level in Fair Value Hierarchy (1) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Cash and cash equivalents Level 1 $ 21,189 $ 21,189 $ 28,301 $ 28,301 Fixed maturities Level 2 218,420 218,420 218,219 218,219 Equity securities (1) 9,303 9,303 9,413 9,413 Policy loans Level 3 1,810 1,810 1,778 1,778 Liabilities: Junior subordinated debentures, net Level 2 33,738 34,508 33,738 33,670 Revolving credit facility Level 2 4,024 4,024 3,019 3,019 (1) See the aforementioned information for a description of the fair value hierarchy as well as a description of levels for classes of these financial assets. |
Allowance for Expected Credit L
Allowance for Expected Credit Losses | 3 Months Ended |
Mar. 31, 2024 | |
Allowance for Expected Credit Losses [Abstract] | |
Allowance for Expected Credit Losses | Note 5. Allowance for Expected Credit Losses Reinsurance Recoverables The following table presents the balances of reinsurance recoverables, net of the allowance for expected credit losses, at March 31, 2024 and 2023, and the changes in the allowance for expected credit losses for the three months ended March 31, 2024 and 2023. At and for the three months ended March 31, 2024 Reinsurance Recoverables, Net of Allowance for Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of period $ 21,103 $ 61 Current period change for expected credit losses — (5 ) Write-offs of uncollectible reinsurance recoverables — — Balance, end of period $ 20,935 $ 56 At and for the three months ended March 31, 2023 Reinsurance Recoverables, Net of Allowance for Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of period $ 25,913 $ — Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2023 — 75 Current period change for expected credit losses — (6 ) Write-offs of uncollectible reinsurance recoverables — — Balance, end of period $ 24,916 $ 69 Insurance Premium and Other Receivables The following table presents the balances of insurance premiums and other, net of the allowance for expected credit losses, at March 31, 2024 and 2023, and the changes in the allowance for expected credit losses for the three months ended March 31, 2024 and 2023. At and for the three months ended March 31, 2024 Insurance Premiums and Other, Net of Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of period $ 23,690 $ 217 Current period change for expected credit losses (1 ) Write-offs of uncollectible insurance premiums and other receivables — Balance, end of period $ 14,696 $ 216 At and for the three months ended March 31, 2023 Insurance Premiums and Other, Net of Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of period $ 15,386 $ 177 Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2023 — — Current period change for expected credit losses — 20 Write-offs of uncollectible insurance premiums and other receivables — — Balance, end of period $ 11,555 $ 197 |
Internal-Use Software
Internal-Use Software | 3 Months Ended |
Mar. 31, 2024 | |
Internal-Use Software [Abstract] | |
Internal-Use Software | Note 6. 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 $970 and $592 during the three months ended March 31, 2024 and 2023, respectively. As a result, the Company has capitalized $5,537 and $3,614 in implementation costs in other assets within its condensed consolidated balance sheet as of March 31, 2024 and 2023, respectively. The Company expects the software will be substantially ready for its intended use in the second half of 2024 |
Insurance Reserves for Losses a
Insurance Reserves for Losses and Claims | 3 Months Ended |
Mar. 31, 2024 | |
Insurance Reserves for Losses and Claims [Abstract] | |
Insurance Reserves for Losses and Claims | Note 7. Insurance Reserves for Losses and Claims The roll-forward of insurance reserves for losses and claims for the three months ended March 31, 2024 and 2023 is as follows: Three Months Ended March 31, 2024 2023 Beginning insurance reserves for losses and claims, gross $ 87,478 $ 87,484 Less: Reinsurance recoverable on unpaid losses (14,678 ) (17,647 ) Beginning insurance reserves for losses and claims, net 72,800 69,837 Incurred related to: Current accident year 30,748 30,836 Prior accident year development (591 ) (1) (638 ) (2) Total incurred 30,157 30,198 Paid related to: Current accident year 6,806 9,174 Prior accident years 23,261 21,504 Total paid 30,067 30,678 Ending insurance reserves for losses and claims, net 72,890 69,357 Plus: Reinsurance recoverable on unpaid losses 15,559 16,893 Ending insurance reserves for losses and claims, gross $ 88,449 $ 86,250 (1) Prior years’ development was primarily the result of favorable development in the property and casualty operations, partially offset by unfavorable development in the Medicare supplement line of business in the life and health operations. (2) Prior years’ development was primarily the result of favorable development in the property and casualty operations, as well as favorable development in the Medicare supplement line of business in the life and health operations. Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred: Three Months Ended March 31, 2024 2023 Total incurred losses $ 30,157 $ 30,198 Cash surrender value and matured endowments 265 257 Benefit reserve changes 1,503 5 Total insurance benefits and losses incurred $ 31,925 $ 30,460 |
Credit Arrangements
Credit Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Credit Arrangements [Abstract] | |
Credit Arrangements | Note 8. Credit Arrangements Bank Debt On May 12, 2021, the Company entered into a Revolving Credit Agreement with Truist Bank as the lender (the “Lender”). The Revolving Credit Agreement provides for an unsecured $10,000 revolving credit facility that originally matured on April 12, 2024. On March 22, 2024, the Company entered into a First Amendment (the “Amendment”) to its Revolving Credit Agreement (as amended, the “Credit Agreement”) with the Lender. The Amendment, among other things, (a) updates the interest rate provisions to memorialize that the Company pays interest on the unpaid principal balance of outstanding revolving loans at the Adjusted Term SOFR rate (as defined in the Credit Agreement), plus 2.00%, (b) extends the maturity date of the revolving credit facility to March 22, 2027, and (c) requires that the Company maintain a consolidated net worth of not less than $64.2 million. Except as modified by the Amendment, the existing terms of the original Credit Agreement remain in effect. 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 and maintained a minimum consolidated net worth, as previously mentioned. 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, 2024 and December 31, 2023, the Company had outstanding borrowings including accrued interest of $4,024 and $3,019, respectively, 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 the Company; and (iii) engaging in those activities necessary or incidental thereto. The outstanding $18.0 million and $15.7 million of Junior Subordinated Debentures mature on December 4, 2032 and May 15, 2033, respectively, are callable quarterly, in whole or in part, only at the option of the Company. Prior to July 1, 2023, the interest rate was based on 3-month LIBOR plus an applicable margin. Effective July 1, 2023, the interest rate is determined based on a reference rate of the 3-month SOFR plus applicable tenor spread of 0.26161 percent plus an applicable margin, ranging from 4.00% to 4.10%. The financial structure of each of Atlantic American Statutory Trust I and II as of March 31, 2024 was as follows: Atlantic American Statutory Trust I Atlantic American Statutory Trust II JUNIOR SUBORDINATED DEBENTURES (1) (2) Principal amount owed March 31 2024 $ 18,042 $ 23,196 Less: Treasury debt (3) — (7,500 ) Net balance March 31 2024 $ 18,042 $ 15,696 Net balance December 31, 2023 $ 18,042 $ 15,696 Coupon rate 3-Month SOFR + 0.26161 spread adj + 4.00% 3-Month SOFR + 0.26161 spread adj + 4.10% Interest payable Quarterly Quarterly Maturity date December 4, 2032 May 15, 2033 Redeemable by issuer Yes Yes TRUST PREFERRED SECURITIES Issuance date December 4, 2002 May 15, 2003 Securities issued 17,500 22,500 Liquidation preference per security $ 1 $ 1 Liquidation value $ 17,500 $ 22,500 Coupon rate 3-Month SOFR + 0.26161 spread adj + 4.00% 3-Month SOFR + 0.26161 spread adj + 4.10% Distribution payable Quarterly Quarterly Distribution guaranteed by (4) Atlantic American Corporation Atlantic American Corporation (1) For each of the respective debentures, the Company has the right at any time, and from time to time, to defer payments of interest on the Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters up to the debentures’ respective maturity dates. During any such period, interest will continue to accrue and the Company may not declare or pay any cash dividends or distributions on, or purchase, the Company’s common stock nor make any principal, interest or premium payments on or repurchase any debt securities that rank equally with or junior to the Junior Subordinated Debentures. The Company has the right at any time to dissolve each of the trusts and cause the Junior Subordinated Debentures to be distributed to the holders of the Trust Preferred Securities. (2) The Junior Subordinated Debentures are unsecured and rank junior and subordinate in right of payment to all senior debt of the Parent and are effectively subordinated to all existing and future liabilities of its subsidiaries. (3) On August 4, 2014, the Company acquired $7,500 of the Junior Subordinated Debentures. (4) The Parent has guaranteed, on a subordinated basis, all of the obligations under the Trust Preferred Securities, including payment of the redemption price and any accumulated and unpaid distributions to the extent of available funds and upon dissolution, winding up or liquidation. |
Loss Per Common Share
Loss Per Common Share | 3 Months Ended |
Mar. 31, 2024 | |
Loss Per Common Share [Abstract] | |
Loss Per Common Share | Note 9. Loss Per Common Share A reconciliation of the numerator and denominator used in the loss per common share calculations is as follows: Three Months Ended March 31, 2024 Loss Weighted Average Shares (In thousands) Per Share Amount Basic and Diluted Loss Per Common Share: Net loss $ (1,998 ) 20,402 Less preferred stock dividends (99 ) — Net loss applicable to common shareholders $ (2,097 ) 20,402 $ (0.10 ) Three Months Ended March 31, 2023 Loss Weighted Average Shares (In thousands) Per Share Amount Basic and Diluted Loss Per Common Share: Net loss $ (1,446 ) 20,407 Less preferred stock dividends (99 ) — Net loss applicable to common shareholders $ (1,545 ) 20,407 $ (0.08 ) The assumed conversion of the Company’s Series D preferred stock was excluded from the loss per common share calculation for three month periods ended March 31, 2024 and 2023, since its impact would have been antidilutive. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Taxes [Abstract] | |
Income Taxes | Note 10. Income Taxes A reconciliation of the differences between income taxes computed at the federal statutory income tax rate and income tax benefit is as follows: Three Months Ended March 31, 2024 2023 Federal income tax provision at statutory rate of 21 $ (526 ) $ (382 ) Dividends-received deduction (6 ) (7 ) Meals and entertainment 19 12 Vested stock and club dues 1 1 Parking disallowance 4 4 Income tax benefit $ (508 ) $ (372 ) The components of income tax benefit were: Three Months Ended March 31, 2024 2023 Current – Federal $ — $ 180 Deferred – Federal (508 ) (552 ) Total $ (508 ) $ (372 ) |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Note 11. 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, 2024 and March 31 Additional information regarding the Company’s real estate operating leases is as follows: Three Months Ended March 31, Other information on operating leases: 2024 2023 Cash payments included in the measurement of lease liabilities reported in operating cash flows $ 264 $ 260 Right-of-use assets included in other assets 2,407 3,213 Weighted average discount rate 6.8 % 6.8 % Weighted average remaining lease term in years 2.6 years 3.6 years The following table presents maturities and present value of the Company’s lease liabilities: Lease Liability Remainder of 2024 $ 802 2025 1,083 2026 942 Thereafter — Total undiscounted lease payments 2,827 Less: present value adjustment 247 Operating lease liability included in accounts payable and accrued expenses $ 2,580 As of March 31, 2024, the Company has no operating leases that have not yet commenced. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 12. 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 arising 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 the opinion of management, any such known regulatory matters are not expected to have a material effect on the financial condition or results of operations of the Company. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2024 | |
Segment Information [Abstract] | |
Segment Information | Note 13. 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 2024 and 2023. Assets March 31, 2024 December 31, 2023 American Southern $ 133,919 $ 149,236 Bankers Fidelity 200,084 203,079 Corporate and Other 31,748 28,950 Total assets $ 365,751 $ 381,265 Three Months Ended March 31, Revenues 2024 2023 American Southern $ 18,858 $ 18,200 Bankers Fidelity 28,171 28,190 Corporate and Other (32 ) (121 ) Total revenue $ 46,997 $ 46,269 Three Months Ended March 31, Income (Loss) Before Income Taxes 2024 2023 American Southern $ 1,507 $ 1,352 Bankers Fidelity (1,287 ) (330 ) Corporate and Other (2,726 ) (2,840 ) Loss before income taxes $ (2,506 ) $ (1,818 ) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
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 2023 Annual Report. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Investments [Abstract] | |
Investments Aggregated by Type and Industry | Fixed maturities were comprised of the following: March 31, 2024 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Cost or Amortized Cost Fixed maturities: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies and authorities $ 49,277 $ 53 $ 5,119 $ — $ 54,343 Obligations of states and political subdivisions 8,133 9 1,388 — 9,512 Corporate securities: Utilities and telecom 21,854 80 2,939 — 24,713 Financial services 60,733 549 5,175 — 65,359 Other business – diversified 34,105 242 3,541 — 37,404 Other consumer – diversified 44,091 31 5,731 — 49,791 Total corporate securities 160,783 902 17,386 — 177,267 Redeemable preferred stocks: Other consumer – diversified 227 34 — — 193 Total redeemable preferred stocks 227 34 — — 193 Total fixed maturities $ 218,420 $ 998 $ 23,893 $ — $ 241,315 December 31, 2023 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Cost or Amortized Cost Fixed maturities: Bonds: U.S. Treasury securities and obligations of U.S. Government agencies and authorities $ 50,059 $ 63 $ 4,944 $ — $ 54,940 Obligations of states and political subdivisions 8,106 15 1,424 — 9,515 Corporate securities: Utilities and telecom 21,309 143 2,582 — 23,748 Financial services 59,584 560 4,931 — 63,955 Other business – diversified 34,386 403 2,940 — 36,923 Other consumer – diversified 44,570 87 4,870 — 49,353 Total corporate securities 159,849 1,193 15,323 — 173,979 Redeemable preferred stocks: Other consumer – diversified 205 13 — — 192 Total redeemable preferred stocks 205 13 — — 192 Total fixed maturities $ 218,219 $ 1,284 $ 21,691 $ — $ 238,626 Bonds having an amortized cost of $14,676 and $14,647 and included in the tables above were on deposit with insurance regulatory authorities as of March 31, 2024 and December 31, 2023, respectively, in accordance with statutory requirements. In addition, the Company maintains cash and cash equivalents on deposit with insurance regulatory authorities of $226 as of March 31, 2024 and December 31, 2023. Equity securities were comprised of the following: March 31, 2024 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Cost or Amortized Cost Equity securities: Common and non-redeemable preferred stocks: Financial services $ 1,054 $ 747 $ — $ 307 Communications 8,249 3,616 — 4,633 Total equity securities $ 9,303 $ 4,363 $ — $ 4,940 December 31, 2023 Estimated Fair Value Gross Unrealized Gains Gross Unrealized Losses Cost or Amortized Equity securities: Common and non-redeemable preferred stocks: Financial services $ 924 $ 621 $ — $ 303 Communications 8,489 3,856 — 4,633 Total equity securities $ 9,413 $ 4,477 $ — $ 4,936 |
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, 2024 and December 31, 2023 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, 2024 December 31, 2023 Carrying Value Amortized Cost Carrying Value Amortized Cost Due in one year or less $ 6,795 $ 6,887 $ 1,715 $ 1,750 Due after one year through five years 56,898 59,181 60,423 62,423 Due after five years through ten years 32,680 35,968 33,596 36,752 Due after ten years 87,772 100,890 86,857 97,984 Asset backed securities 34,275 38,389 35,628 39,717 Totals $ 218,420 $ 241,315 $ 218,219 $ 238,626 |
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, 2024 and December 31, 2023. March 31, 2024 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 $ 5,161 $ 44 $ 37,250 $ 5,075 $ 42,411 $ 5,119 Obligations of states and political subdivisions 1,130 16 5,985 1,372 7,115 1,388 Corporate securities 11,793 161 136,344 17,225 148,137 17,386 Total temporarily impaired securities $ 18,084 $ 221 $ 179,579 $ 23,672 $ 197,663 $ 23,893 December 31, 2023 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 $ 5,194 $ 37 $ 39,476 $ 4,907 $ 44,670 $ 4,944 Obligations of states and political subdivisions 1,145 3 5,936 1,421 7,081 1,424 Corporate securities 539 13 138,283 15,310 138,822 15,323 Total temporarily impaired securities $ 6,878 $ 53 $ 183,695 $ 21,638 $ 190,573 $ 21,691 |
Unrealized Losses on Equity Securities | The following table presents the portion of unrealized losses related to equity securities still held for the three month period ended March 31, 2024 and 2023. Three Months Ended March 31, 2024 2023 Net realized and unrealized losses recognized during the period on equity securities $ (114 ) $ (2,375 ) Less: Net realized gains recognized during the period on equity securities sold during the period — — Unrealized losses recognized during the reporting period on equity securities, net $ (114 ) $ (2,375 ) |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Values of Financial Instruments [Abstract] | |
Financial Instruments Carried at Fair Value Measured on a Recurring Basis | As of March 31, 2024, 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 $ — $ 218,420 $ — $ 218,420 Equity securities 9,114 — 189 9,303 Cash equivalents 13,309 — — 13,309 Total $ 22,423 $ 218,420 $ 189 $ 241,032 As of December 31, 2023, 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 $ — $ 218,219 $ — $ 218,219 Equity securities 9,228 — 185 9,413 Cash equivalents 14,834 — — 14,834 Total $ 24,062 $ 218,219 $ 185 $ 242,466 |
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, 2024 and December 31, 2023. March 31, 2024 December 31, 2023 Level in Fair Value Hierarchy (1) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Cash and cash equivalents Level 1 $ 21,189 $ 21,189 $ 28,301 $ 28,301 Fixed maturities Level 2 218,420 218,420 218,219 218,219 Equity securities (1) 9,303 9,303 9,413 9,413 Policy loans Level 3 1,810 1,810 1,778 1,778 Liabilities: Junior subordinated debentures, net Level 2 33,738 34,508 33,738 33,670 Revolving credit facility Level 2 4,024 4,024 3,019 3,019 (1) See the aforementioned information for a description of the fair value hierarchy as well as a description of levels for classes of these financial assets. |
Allowance for Expected Credit_2
Allowance for Expected Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Allowance for Expected Credit Losses [Abstract] | |
Reinsurance Recoverables | The following table presents the balances of reinsurance recoverables, net of the allowance for expected credit losses, at March 31, 2024 and 2023, and the changes in the allowance for expected credit losses for the three months ended March 31, 2024 and 2023. At and for the three months ended March 31, 2024 Reinsurance Recoverables, Net of Allowance for Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of period $ 21,103 $ 61 Current period change for expected credit losses — (5 ) Write-offs of uncollectible reinsurance recoverables — — Balance, end of period $ 20,935 $ 56 At and for the three months ended March 31, 2023 Reinsurance Recoverables, Net of Allowance for Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of period $ 25,913 $ — Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2023 — 75 Current period change for expected credit losses — (6 ) Write-offs of uncollectible reinsurance recoverables — — Balance, end of period $ 24,916 $ 69 |
Insurance Premium and Other Receivables | The following table presents the balances of insurance premiums and other, net of the allowance for expected credit losses, at March 31, 2024 and 2023, and the changes in the allowance for expected credit losses for the three months ended March 31, 2024 and 2023. At and for the three months ended March 31, 2024 Insurance Premiums and Other, Net of Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of period $ 23,690 $ 217 Current period change for expected credit losses (1 ) Write-offs of uncollectible insurance premiums and other receivables — Balance, end of period $ 14,696 $ 216 At and for the three months ended March 31, 2023 Insurance Premiums and Other, Net of Expected Credit Losses Allowance for Expected Credit Losses Balance, beginning of period $ 15,386 $ 177 Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2023 — — Current period change for expected credit losses — 20 Write-offs of uncollectible insurance premiums and other receivables — — Balance, end of period $ 11,555 $ 197 |
Insurance Reserves for Losses_2
Insurance Reserves for Losses and Claims (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 and 2023 is as follows: Three Months Ended March 31, 2024 2023 Beginning insurance reserves for losses and claims, gross $ 87,478 $ 87,484 Less: Reinsurance recoverable on unpaid losses (14,678 ) (17,647 ) Beginning insurance reserves for losses and claims, net 72,800 69,837 Incurred related to: Current accident year 30,748 30,836 Prior accident year development (591 ) (1) (638 ) (2) Total incurred 30,157 30,198 Paid related to: Current accident year 6,806 9,174 Prior accident years 23,261 21,504 Total paid 30,067 30,678 Ending insurance reserves for losses and claims, net 72,890 69,357 Plus: Reinsurance recoverable on unpaid losses 15,559 16,893 Ending insurance reserves for losses and claims, gross $ 88,449 $ 86,250 (1) Prior years’ development was primarily the result of favorable development in the property and casualty operations, partially offset by unfavorable development in the Medicare supplement line of business in the life and health operations. (2) Prior years’ development was primarily the result of favorable development in the property and casualty operations, as well as favorable development in the Medicare supplement line of business in the life and health 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, 2024 2023 Total incurred losses $ 30,157 $ 30,198 Cash surrender value and matured endowments 265 257 Benefit reserve changes 1,503 5 Total insurance benefits and losses incurred $ 31,925 $ 30,460 |
Credit Arrangements (Tables)
Credit Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 was as follows: Atlantic American Statutory Trust I Atlantic American Statutory Trust II JUNIOR SUBORDINATED DEBENTURES (1) (2) Principal amount owed March 31 2024 $ 18,042 $ 23,196 Less: Treasury debt (3) — (7,500 ) Net balance March 31 2024 $ 18,042 $ 15,696 Net balance December 31, 2023 $ 18,042 $ 15,696 Coupon rate 3-Month SOFR + 0.26161 spread adj + 4.00% 3-Month SOFR + 0.26161 spread adj + 4.10% Interest payable Quarterly Quarterly Maturity date December 4, 2032 May 15, 2033 Redeemable by issuer Yes Yes TRUST PREFERRED SECURITIES Issuance date December 4, 2002 May 15, 2003 Securities issued 17,500 22,500 Liquidation preference per security $ 1 $ 1 Liquidation value $ 17,500 $ 22,500 Coupon rate 3-Month SOFR + 0.26161 spread adj + 4.00% 3-Month SOFR + 0.26161 spread adj + 4.10% Distribution payable Quarterly Quarterly Distribution guaranteed by (4) Atlantic American Corporation Atlantic American Corporation (1) For each of the respective debentures, the Company has the right at any time, and from time to time, to defer payments of interest on the Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters up to the debentures’ respective maturity dates. During any such period, interest will continue to accrue and the Company may not declare or pay any cash dividends or distributions on, or purchase, the Company’s common stock nor make any principal, interest or premium payments on or repurchase any debt securities that rank equally with or junior to the Junior Subordinated Debentures. The Company has the right at any time to dissolve each of the trusts and cause the Junior Subordinated Debentures to be distributed to the holders of the Trust Preferred Securities. (2) The Junior Subordinated Debentures are unsecured and rank junior and subordinate in right of payment to all senior debt of the Parent and are effectively subordinated to all existing and future liabilities of its subsidiaries. (3) On August 4, 2014, the Company acquired $7,500 of the Junior Subordinated Debentures. (4) The Parent has guaranteed, on a subordinated basis, all of the obligations under the Trust Preferred Securities, including payment of the redemption price and any accumulated and unpaid distributions to the extent of available funds and upon dissolution, winding up or liquidation. |
Loss Per Common Share (Tables)
Loss Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Loss Per Common Share [Abstract] | |
Reconciliation of Numerator and Denominator used in Loss per Common Share Calculations | A reconciliation of the numerator and denominator used in the loss per common share calculations is as follows: Three Months Ended March 31, 2024 Loss Weighted Average Shares (In thousands) Per Share Amount Basic and Diluted Loss Per Common Share: Net loss $ (1,998 ) 20,402 Less preferred stock dividends (99 ) — Net loss applicable to common shareholders $ (2,097 ) 20,402 $ (0.10 ) Three Months Ended March 31, 2023 Loss Weighted Average Shares (In thousands) Per Share Amount Basic and Diluted Loss Per Common Share: Net loss $ (1,446 ) 20,407 Less preferred stock dividends (99 ) — Net loss applicable to common shareholders $ (1,545 ) 20,407 $ (0.08 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Income Taxes [Abstract] | |
Reconciliation of Income Tax Benefit | A reconciliation of the differences between income taxes computed at the federal statutory income tax rate and income tax benefit is as follows: Three Months Ended March 31, 2024 2023 Federal income tax provision at statutory rate of 21 $ (526 ) $ (382 ) Dividends-received deduction (6 ) (7 ) Meals and entertainment 19 12 Vested stock and club dues 1 1 Parking disallowance 4 4 Income tax benefit $ (508 ) $ (372 ) |
Components of Income Tax Benefit | The components of income tax benefit were: Three Months Ended March 31, 2024 2023 Current – Federal $ — $ 180 Deferred – Federal (508 ) (552 ) Total $ (508 ) $ (372 ) |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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: 2024 2023 Cash payments included in the measurement of lease liabilities reported in operating cash flows $ 264 $ 260 Right-of-use assets included in other assets 2,407 3,213 Weighted average discount rate 6.8 % 6.8 % Weighted average remaining lease term in years 2.6 years 3.6 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 2024 $ 802 2025 1,083 2026 942 Thereafter — Total undiscounted lease payments 2,827 Less: present value adjustment 247 Operating lease liability included in accounts payable and accrued expenses $ 2,580 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Information [Abstract] | |
Assets, Revenue Loss Before Income Taxes for Each Business Unit | 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 2024 and 2023. Assets March 31, 2024 December 31, 2023 American Southern $ 133,919 $ 149,236 Bankers Fidelity 200,084 203,079 Corporate and Other 31,748 28,950 Total assets $ 365,751 $ 381,265 Three Months Ended March 31, Revenues 2024 2023 American Southern $ 18,858 $ 18,200 Bankers Fidelity 28,171 28,190 Corporate and Other (32 ) (121 ) Total revenue $ 46,997 $ 46,269 Three Months Ended March 31, Income (Loss) Before Income Taxes 2024 2023 American Southern $ 1,507 $ 1,352 Bankers Fidelity (1,287 ) (330 ) Corporate and Other (2,726 ) (2,840 ) Loss before income taxes $ (2,506 ) $ (1,818 ) |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2024 Segment | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Number of business units | 2 |
Investments, Aggregated by Type
Investments, Aggregated by Type and Industry (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | $ 218,420 | $ 218,219 |
Allowance for credit losses | 0 | 0 |
Amortized cost total | 241,315 | 238,626 |
Estimated fair value | 9,303 | 9,413 |
Cost | 4,940 | 4,936 |
Bonds Pledged as Collateral [Member] | FHLB Advances [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Amortized cost pledged as collateral to FHLB | 9,498 | 9,584 |
Bonds [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Assets held with insurance regulatory authorities | 14,676 | 14,647 |
Cash and Cash Equivalents [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Assets held with insurance regulatory authorities | 226 | 226 |
Fixed Maturities [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 218,420 | 218,219 |
Gross unrealized gains | 998 | 1,284 |
Gross unrealized losses | 23,893 | 21,691 |
Allowance for credit losses | 0 | 0 |
Amortized cost total | 241,315 | 238,626 |
U.S. Treasury Securities and Obligations of U.S. Government Agencies and Authorities [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 49,277 | 50,059 |
Gross unrealized gains | 53 | 63 |
Gross unrealized losses | 5,119 | 4,944 |
Allowance for credit losses | 0 | 0 |
Amortized cost total | 54,343 | 54,940 |
Obligations of States and Political Subdivisions [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 8,133 | 8,106 |
Gross unrealized gains | 9 | 15 |
Gross unrealized losses | 1,388 | 1,424 |
Allowance for credit losses | 0 | 0 |
Amortized cost total | 9,512 | 9,515 |
Corporate Securities [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 160,783 | 159,849 |
Gross unrealized gains | 902 | 1,193 |
Gross unrealized losses | 17,386 | 15,323 |
Allowance for credit losses | 0 | 0 |
Amortized cost total | 177,267 | 173,979 |
Corporate Securities [Member] | Utilities and Telecom [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 21,854 | 21,309 |
Gross unrealized gains | 80 | 143 |
Gross unrealized losses | 2,939 | 2,582 |
Allowance for credit losses | 0 | 0 |
Amortized cost total | 24,713 | 23,748 |
Corporate Securities [Member] | Financial Services [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 60,733 | 59,584 |
Gross unrealized gains | 549 | 560 |
Gross unrealized losses | 5,175 | 4,931 |
Allowance for credit losses | 0 | 0 |
Amortized cost total | 65,359 | 63,955 |
Corporate Securities [Member] | Other Business - Diversified [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 34,105 | 34,386 |
Gross unrealized gains | 242 | 403 |
Gross unrealized losses | 3,541 | 2,940 |
Allowance for credit losses | 0 | 0 |
Amortized cost total | 37,404 | 36,923 |
Corporate Securities [Member] | Other Consumer - Diversified [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 44,091 | 44,570 |
Gross unrealized gains | 31 | 87 |
Gross unrealized losses | 5,731 | 4,870 |
Allowance for credit losses | 0 | 0 |
Amortized cost total | 49,791 | 49,353 |
Redeemable Preferred Stocks [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 227 | 205 |
Gross unrealized gains | 34 | 13 |
Gross unrealized losses | 0 | 0 |
Allowance for credit 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 | 227 | 205 |
Gross unrealized gains | 34 | 13 |
Gross unrealized losses | 0 | 0 |
Allowance for credit losses | 0 | 0 |
Amortized cost total | 193 | 192 |
Equity Securities [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 9,303 | 9,413 |
Gross unrealized gains | 4,363 | 4,477 |
Gross unrealized losses | 0 | 0 |
Cost | 4,940 | 4,936 |
Common and Non-redeemable Preferred Stocks [Member] | Financial Services [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 1,054 | 924 |
Gross unrealized gains | 747 | 621 |
Gross unrealized losses | 0 | 0 |
Cost | 307 | 303 |
Common and Non-redeemable Preferred Stocks [Member] | Communications [Member] | ||
Investments aggregated by type and industry [Abstract] | ||
Estimated fair value | 8,249 | 8,489 |
Gross unrealized gains | 3,616 | 3,856 |
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, 2024 | Dec. 31, 2023 |
Carrying Value [Abstract] | ||
Due in one year or less | $ 6,795 | $ 1,715 |
Due after one year through five years | 56,898 | 60,423 |
Due after five years through ten years | 32,680 | 33,596 |
Due after ten years | 87,772 | 86,857 |
Asset backed securities | 34,275 | 35,628 |
Carrying value total | 218,420 | 218,219 |
Amortized Cost [Abstract] | ||
Due in one year or less | 6,887 | 1,750 |
Due after one year through five years | 59,181 | 62,423 |
Due after five years through ten years | 35,968 | 36,752 |
Due after ten years | 100,890 | 97,984 |
Asset backed securities | 38,389 | 39,717 |
Amortized cost total | $ 241,315 | $ 238,626 |
Investments, Securities with Co
Investments, Securities with Continuous Unrealized Loss Position (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) Securities | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) Securities | |
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract] | |||
Less than 12 months | $ 18,084 | $ 6,878 | |
12 months or longer | 179,579 | 183,695 | |
Total | 197,663 | 190,573 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract] | |||
Less than 12 months | 221 | 53 | |
12 months or longer | 23,672 | 21,638 | |
Total | $ 23,893 | $ 21,691 | |
Number of securities in unrealized loss position | Securities | 224 | 222 | |
Allowance for expected credit losses on available-for-sale fixed maturities | $ 0 | $ 0 | |
Realized investment gains | 0 | $ 0 | |
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 | 5,161 | 5,194 | |
12 months or longer | 37,250 | 39,476 | |
Total | 42,411 | 44,670 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract] | |||
Less than 12 months | 44 | 37 | |
12 months or longer | 5,075 | 4,907 | |
Total | 5,119 | 4,944 | |
Allowance for expected credit losses on available-for-sale fixed maturities | 0 | 0 | |
Obligations of States and Political Subdivisions [Member] | |||
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract] | |||
Less than 12 months | 1,130 | 1,145 | |
12 months or longer | 5,985 | 5,936 | |
Total | 7,115 | 7,081 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract] | |||
Less than 12 months | 16 | 3 | |
12 months or longer | 1,372 | 1,421 | |
Total | 1,388 | 1,424 | |
Allowance for expected credit losses on available-for-sale fixed maturities | 0 | 0 | |
Corporate Securities [Member] | |||
Available-for-sale securities, continuous unrealized loss position, Fair Value [Abstract] | |||
Less than 12 months | 11,793 | 539 | |
12 months or longer | 136,344 | 138,283 | |
Total | 148,137 | 138,822 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses [Abstract] | |||
Less than 12 months | 161 | 13 | |
12 months or longer | 17,225 | 15,310 | |
Total | 17,386 | 15,323 | |
Allowance for expected credit losses on available-for-sale fixed maturities | $ 0 | $ 0 |
Investments, Unrealized Losses
Investments, Unrealized Losses on Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Investments [Abstract] | ||
Net realized and unrealized losses recognized during the period on equity securities | $ (114) | $ (2,375) |
Less: Net realized gains recognized during the period on equity securities sold during the period | 0 | 0 |
Unrealized losses recognized during the reporting period on equity securities, net | $ (114) | $ (2,375) |
Investments, Variable Interest
Investments, Variable Interest Entities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Variable Interest Entities [Abstract] | ||
Carrying amount of interest | $ 6,278 | $ 6,381 |
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 | 6,278 | 6,381 |
Investment in unconsolidated trusts | 1,238 | 1,238 |
Maximum loss exposure | 7,516 | 7,619 |
Outstanding commitments | $ 4,518 | $ 4,518 |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments, Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Financial instruments carried at fair value measured on a recurring basis [Abstract] | ||
Fixed maturities | $ 218,420 | $ 218,219 |
Equity securities | 9,303 | 9,413 |
Recurring [Member] | ||
Financial instruments carried at fair value measured on a recurring basis [Abstract] | ||
Fixed maturities | 218,420 | 218,219 |
Equity securities | 9,303 | 9,413 |
Cash equivalents | 13,309 | 14,834 |
Assets at fair value | 241,032 | 242,466 |
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 | 0 |
Equity securities | 9,114 | 9,228 |
Cash equivalents | 13,309 | 14,834 |
Assets at fair value | 22,423 | 24,062 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Financial instruments carried at fair value measured on a recurring basis [Abstract] | ||
Fixed maturities | 218,420 | 218,219 |
Equity securities | 0 | 0 |
Cash equivalents | 0 | 0 |
Assets at fair value | 218,420 | 218,219 |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Financial instruments carried at fair value measured on a recurring basis [Abstract] | ||
Fixed maturities | 0 | 0 |
Equity securities | 189 | 185 |
Cash equivalents | 0 | 0 |
Assets at fair value | $ 189 | $ 185 |
Fair Values of Financial Inst_4
Fair Values of Financial Instruments, Estimated Fair Value and Level (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | |
Assets [Abstract] | |||
Fixed maturities | $ 218,420 | $ 218,219 | |
Equity securities | 9,303 | 9,413 | |
Carrying Amount [Member] | |||
Assets [Abstract] | |||
Equity securities | [1] | 9,303 | 9,413 |
Carrying Amount [Member] | Level 1 [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | 21,189 | 28,301 | |
Carrying Amount [Member] | Level 2 [Member] | |||
Assets [Abstract] | |||
Fixed maturities | 218,420 | 218,219 | |
Liabilities [Abstract] | |||
Junior subordinated debentures, net | 33,738 | 33,738 | |
Revolving credit facility | 4,024 | 3,019 | |
Carrying Amount [Member] | Level 3 [Member] | |||
Assets [Abstract] | |||
Policy loans | 1,810 | 1,778 | |
Estimated Fair Value [Member] | |||
Assets [Abstract] | |||
Equity securities | [1] | 9,303 | 9,413 |
Estimated Fair Value [Member] | Level 1 [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | 21,189 | 28,301 | |
Estimated Fair Value [Member] | Level 2 [Member] | |||
Assets [Abstract] | |||
Fixed maturities | 218,420 | 218,219 | |
Liabilities [Abstract] | |||
Junior subordinated debentures, net | 34,508 | 33,670 | |
Revolving credit facility | 4,024 | 3,019 | |
Estimated Fair Value [Member] | Level 3 [Member] | |||
Assets [Abstract] | |||
Policy loans | $ 1,810 | $ 1,778 | |
[1] See the aforementioned information for a description of the fair value hierarchy as well as a description of levels for classes of these financial assets. |
Allowance for Expected Credit_3
Allowance for Expected Credit Losses, Reinsurance Recoverables (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Reinsurance Recoverables, Net of Allowance for Expected Credit Losses [Abstract] | ||
Balance, beginning of period | $ 21,103 | $ 25,913 |
Balance, end of period | 20,935 | 24,916 |
Allowance for Expected Credit Losses [Abstract] | ||
Balance, beginning of period | 61 | 0 |
Current period change for expected credit losses | (5) | (6) |
Write-offs of uncollectible reinsurance recoverables | 0 | 0 |
Balance, end of period | $ 56 | 69 |
ASU 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Reinsurance Recoverables, Net of Allowance for Expected Credit Losses [Abstract] | ||
Balance, beginning of period | 0 | |
Allowance for Expected Credit Losses [Abstract] | ||
Balance, beginning of period | $ 75 |
Allowance for Expected Credit_4
Allowance for Expected Credit Losses, Insurance Premium and Other Receivables (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Insurance Premiums and Other, Net of Expected Credit Losses [Abstract] | ||
Balance, beginning of period | $ 23,690 | $ 15,386 |
Balance, end of period | 14,696 | 11,555 |
Allowance for Expected Credit Losses [Abstract] | ||
Balance, beginning of period | 217 | 177 |
Current period change for expected credit losses | (1) | 20 |
Write-offs of uncollectible insurance premiums and other receivables | 0 | 0 |
Balance, end of period | $ 216 | 197 |
ASU 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Insurance Premiums and Other, Net of Expected Credit Losses [Abstract] | ||
Balance, beginning of period | 0 | |
Allowance for Expected Credit Losses [Abstract] | ||
Balance, beginning of period | $ 0 |
Internal-Use Software (Details)
Internal-Use Software (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Internal Use Software [Abstract] | ||
Period of initial terms of arrangement | 5 years | |
Period of additional renewal term | 5 years | |
Incurred and capitalized implementation costs | $ 970 | $ 592 |
Capitalized implementation costs | 5,537 | 3,614 |
Amortization expense | $ 0 | $ 0 |
Software Capitalized Implementation Costs [Member] | ||
Internal Use Software [Abstract] | ||
Amortization period | 10 years |
Insurance Reserves for Losses_3
Insurance Reserves for Losses and Claims (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | |||
Insurance Reserves for Losses and Claims [Roll Forward] | ||||
Beginning insurance reserves for losses and claims, gross | $ 87,478 | $ 87,484 | ||
Less: Reinsurance recoverable on unpaid losses | (14,678) | (17,647) | ||
Beginning insurance reserves for losses and claims, net | 72,800 | 69,837 | ||
Incurred related to [Abstract] | ||||
Current accident year | 30,748 | 30,836 | ||
Prior accident year development | (591) | [1] | (638) | [2] |
Total incurred | 30,157 | 30,198 | ||
Paid related to [Abstract] | ||||
Current accident year | 6,806 | 9,174 | ||
Prior accident years | 23,261 | 21,504 | ||
Total paid | 30,067 | 30,678 | ||
Ending insurance reserves for losses and claims, net | 72,890 | 69,357 | ||
Plus: Reinsurance recoverable on unpaid losses | 15,559 | 16,893 | ||
Ending insurance reserves for losses and claims, gross | 88,449 | 86,250 | ||
Reconciliation of total incurred claims to total insurance benefits and losses incurred [Abstract] | ||||
Total incurred losses | 30,157 | 30,198 | ||
Cash surrender value and matured endowments | 265 | 257 | ||
Benefit reserve changes | 1,503 | 5 | ||
Total insurance benefits and losses incurred | $ 31,925 | $ 30,460 | ||
[1] Prior years’ development was primarily the result of favorable development in the property and casualty operations, partially offset by unfavorable development in the Medicare supplement line of business in the life and health operations. Prior years’ development was primarily the result of favorable development in the property and casualty operations, as well as favorable development in the Medicare supplement line of business in the life and health operations. |
Credit Arrangements, Bank Debt
Credit Arrangements, Bank Debt (Details) $ in Thousands | 3 Months Ended | ||||
Mar. 22, 2024 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Mar. 31, 2023 USD ($) | May 12, 2021 USD ($) | |
Bank Debt [Abstract] | |||||
Net worth | $ 102,803 | $ 107,275 | $ 104,379 | ||
Revolving Credit Facility [Member] | |||||
Bank Debt [Abstract] | |||||
Unsecured credit facility | $ 10,000 | ||||
Maturity date | Apr. 12, 2024 | ||||
Outstanding borrowings | $ 4,024 | $ 3,019 | |||
Revolving Credit Facility [Member] | Minimum [Member] | |||||
Bank Debt [Abstract] | |||||
Indebtedness capital ratio | 0.35 | ||||
Revolving Credit Facility [Member] | Amendment [Member] | |||||
Bank Debt [Abstract] | |||||
Maturity date | Mar. 22, 2027 | ||||
Revolving Credit Facility [Member] | Amendment [Member] | Minimum [Member] | |||||
Bank Debt [Abstract] | |||||
Net worth | $ 64,200 | ||||
Revolving Credit Facility [Member] | Amendment [Member] | SOFR [Member] | |||||
Bank Debt [Abstract] | |||||
Basis spread on variable rate | 2% |
Credit Arrangements, Junior Sub
Credit Arrangements, Junior Subordinated Debentures (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) Trust Quarter $ / shares shares | ||
Debt Instruments [Abstract] | ||
Number of Connecticut statutory business trusts | Trust | 2 | |
Financial structure of statutory business trusts [Abstract] | ||
Net balance March 31, 2024 | $ 33,738 | |
Net balance December 31, 2023 | $ 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 | |
Junior Subordinated Debentures [Member] | LIBOR [Member] | ||
Financial structure of statutory business trusts [Abstract] | ||
Variable rate term | 3 months | |
Junior Subordinated Debentures [Member] | SOFR [Member] | ||
Financial structure of statutory business trusts [Abstract] | ||
Basis spread on variable rate | 0.26161% | |
Variable rate term | 3 months | |
Atlantic American Statutory Trust I [Member] | Junior Subordinated Debentures [Member] | ||
Financial structure of statutory business trusts [Abstract] | ||
Principal amount owed March 31, 2024 | $ 18,042 | [1],[2] |
Less: Treasury debt | 0 | [1],[2],[3] |
Net balance March 31, 2024 | 18,042 | [1],[2] |
Net balance December 31, 2023 | $ 18,042 | [1],[2] |
Coupon rate | 3-Month SOFR + 0.26161 spread adj + 4.00% | |
Interest payable | Quarterly | |
Maturity date | Dec. 04, 2032 | [1],[2] |
Redeemable by issuer | Yes | [1],[2] |
Atlantic American Statutory Trust I [Member] | Trust Preferred Securities [Member] | ||
Financial structure of statutory business trusts [Abstract] | ||
Coupon rate | 3-Month SOFR + 0.26161 spread adj + 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] | SOFR [Member] | ||
Financial structure of statutory business trusts [Abstract] | ||
Basis spread on variable rate | 4% | |
Atlantic American Statutory Trust II [Member] | Junior Subordinated Debentures [Member] | ||
Financial structure of statutory business trusts [Abstract] | ||
Principal amount owed March 31, 2024 | $ 23,196 | [1],[2] |
Less: Treasury debt | (7,500) | [1],[2],[3] |
Net balance March 31, 2024 | 15,696 | [1],[2] |
Net balance December 31, 2023 | $ 15,696 | [1],[2] |
Coupon rate | 3-Month SOFR + 0.26161 spread adj + 4.10% | |
Interest payable | Quarterly | |
Maturity date | May 15, 2033 | [1],[2] |
Redeemable by issuer | Yes | [1],[2] |
Atlantic American Statutory Trust II [Member] | Trust Preferred Securities [Member] | ||
Financial structure of statutory business trusts [Abstract] | ||
Coupon rate | 3-Month SOFR + 0.26161 spread adj + 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] | SOFR [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. 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. On August 4, 2014, the Company acquired $7,500 of the Junior Subordinated Debentures. The Parent has guaranteed, on a subordinated basis, all of the obligations under the Trust Preferred Securities, including payment of the redemption price and any accumulated and unpaid distributions to the extent of available funds and upon dissolution, winding up or liquidation. |
Loss Per Common Share (Details)
Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Basic Loss Per Common Share [Abstract] | ||
Net loss | $ (1,998) | $ (1,446) |
Less: preferred stock dividends | (99) | (99) |
Net loss applicable to common shareholders | (2,097) | (1,545) |
Diluted Loss Per Common Share [Abstract] | ||
Net loss applicable to common shareholders | $ (2,097) | $ (1,545) |
Weighted Average Shares [Abstract] | ||
Weighted average shares outstanding, Basic (in shares) | 20,402 | 20,407 |
Weighted average shares outstanding, Diluted (in shares) | 20,402 | 20,407 |
Per Share Amount, Basic [Abstract] | ||
Net loss applicable to common shareholders, Basic (in dollars per share) | $ (0.1) | $ (0.08) |
Per Share Amount, Diluted [Abstract] | ||
Net loss applicable to common shareholders, Diluted (in dollars per share) | $ (0.1) | $ (0.08) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Reconciliation of income tax benefit [Abstract] | ||
Federal income tax provision at statutory rate of 21% | $ (526) | $ (382) |
Dividends-received deduction | (6) | (7) |
Meals and entertainment | 19 | 12 |
Vested stock and club dues | 1 | 1 |
Parking disallowance | 4 | 4 |
Income tax benefit | $ (508) | (372) |
Federal statutory income tax rate | 21% | |
Components of income tax benefit [Abstract] | ||
Current - Federal | $ 0 | 180 |
Deferred - Federal | (508) | (552) |
Income tax benefit | $ (508) | $ (372) |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) Lease | Mar. 31, 2023 USD ($) | |
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 | 264 | 260 |
Right-of-use assets included in other assets on the condensed consolidated balance sheet | $ 2,407 | $ 3,213 |
Weighted average discount rate | 6.80% | 6.80% |
Weighted average remaining lease term in years | 2 years 7 months 6 days | 3 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 2024 | $ 802 | |
2025 | 1,083 | |
2026 | 942 | |
Thereafter | 0 | |
Total undiscounted lease payments | 2,827 | |
Less: present value adjustment | 247 | |
Operating lease liability included in accounts payable and accrued expenses on the condensed consolidated balance sheet | $ 2,580 | |
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, 2024 USD ($) Segment | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Segment Information [Abstract] | |||
Number of business units | Segment | 2 | ||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | $ 365,751 | $ 381,265 | |
Revenues | 46,997 | $ 46,269 | |
Loss before income taxes | (2,506) | (1,818) | |
Operating Segments [Member] | American Southern [Member] | |||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | 133,919 | 149,236 | |
Revenues | 18,858 | 18,200 | |
Loss before income taxes | 1,507 | 1,352 | |
Operating Segments [Member] | Bankers Fidelity [Member] | |||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | 200,084 | 203,079 | |
Revenues | 28,171 | 28,190 | |
Loss before income taxes | (1,287) | (330) | |
Corporate and Other [Member] | |||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | 31,748 | $ 28,950 | |
Revenues | (32) | (121) | |
Loss before income taxes | $ (2,726) | $ (2,840) |