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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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|X| Quarterly Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1997
OR
|_| Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Commission File Number 0-3722
ATLANTIC AMERICAN CORPORATION
Incorporated pursuant to the laws of the State of Georgia
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Internal Revenue Service-- Employer Identification No.
58-1027114
Address of Principal Executive Offices:
4370 Peachtree Road, N.E., Atlanta, Georgia 30319
(404) 266-5500
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES |X| NO |_|
The total number of shares of the registrant's Common Stock, $1 par value,
outstanding on August 7, 1997, was 18,594,369.
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ATLANTIC AMERICAN CORPORATION
INDEX
Part 1. Financial Information Page No.
- ------------------------------ --------
Item 1. Financial Statements:
Consolidated Balance Sheets -
December 31, 1996 and June 30, 1997 2
Consolidated Statements of Operations -
Three months and six months ended June 30, 1996 3
and 1997
Consolidated Statements of Cash Flows -
Six months ended June 30, 1996 and 1997 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial 6 - 9
Condition and Results of Operations
Part II. Other Information
- ---------------------------
Item 4. Submission of matters to a vote of security holders 10
Item 6. Exhibits and report on Form 8-K 10
Signature 11
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- --------------------------------
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands, except share and per share data)
June 30, December 31,
1997 1996
-------- ------------
Cash, including short-term investments of $ 32,734 $ 45,499
$30,047 and $41,614 -------------------------
Investments:
Bonds (cost: $105,978 and $91,611) 105,642 91,310
Common and preferred stocks (cost: $19,543
and $19,748) 39,335 37,762
Mortgage loans 6,700 6,812
Policy and student loans 2,612 6,555
Real estate 46 46
-------------------------
Total investments 154,335 142,485
-------------------------
Receivables:
Reinsurance 26,083 26,854
Other (net of allowance for bad debts:
$1,042 and $1,151) 26,590 16,301
Deferred acquisition costs 15,925 15,179
Other assets 4,397 4,576
Goodwill 2,025 2,100
=========================
Total assets $262,089 $252,994
=========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Insurance reserves and policy funds:
Future policy benefits $ 35,881 $ 36,385
Unearned premiums 33,127 25,100
Losses and claims 84,595 84,074
Other policy liabilities 4,045 3,639
-------------------------
Total policy liabilities 157,648 149,198
Accounts payable and accrued expenses 7,720 9,049
Debt payable (due to affiliates: $0 and $1,058) 33,611 35,611
-------------------------
Total liabilities 198,979 193,858
-------------------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $1 par, 4,000,000 shares
authorized;
Series A preferred, 30,000 shares issued
and outstanding, $3,000 redemption value 30 30
Series B preferred, 134,000 shares issued
and outstanding, $13,400 redemption value 134 134
Common stock, $1 par, 30,000,000 shares
authorized; 18,712,167 shares issued in
1997 and 1996; 18,591,222 shares
outstanding in 1997 and 18,684,217 shares
outstanding in 1996 18,712 18,712
Additional paid-in capital 53,300 54,062
Accumulated deficit (28,140) (31,426)
Net unrealized investment gains 19,456 17,713
Treasury stock, at cost, 120,945 shares in
1997 and 27,950 shares in 1996 (382) (89)
-------------------------
Total shareholders' equity 63,110 59,136
=========================
Total liabilities and
shareholders' equity $262,089 $252,994
=========================
The accompanying notes are an integral part of these financial statements.
-2-
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------
(In thousands, except per share data) 1997 1996 1997 1996
Revenue:
Insurance premiums $21,229 $21,458 $43,003 $42,843
Investment income 2,836 2,878 5,712 5,558
Realized investment gains, net 248 11 286 681
Other income 26 67 28 105
--------------------------------------
Total revenue 24,339 24,414 49,029 49,187
--------------------------------------
Benefits and expenses:
Insurance benefits and losses incurred 14,937 13,953 29,468 28,045
Commissions and underwriting expenses 5,747 6,260 11,792 12,648
Interest expense 738 801 1,471 1,724
Other 1,451 1,551 2,854 2,944
--------------------------------------
Total benefits and expenses 22,873 22,565 45,585 45,361
--------------------------------------
Income before income tax expense and
discontinued operations 1,466 1,849 3,444 3,826
Income tax expense (20) (59) (60) (59)
--------------------------------------
Income from continuing operations 1,446 1,790 3,384 3,767
Loss from discontinued operations - (4,447) - (4,447)
--------------------------------------
Net income (loss) $ 1,446 $(2,657) $ 3,384 $ (680)
======================================
Net income (loss) per common share data:
Continuing operations $ 0.06 $ 0.08 $ 0.14 $ 0.16
Discontinued operations - (0.24) - (0.24)
--------------------------------------
Net income (loss) $ 0.06 (0.16) 0.14 (0.08)
======================================
Weighted average common shares
outstanding 18,730 18,901 18,801 18,855
======================================
The accompanying notes are an integral part of these financial statements.
-3-
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
------------------
1997 1996
------------------
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 3,384 $ (680)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Amortization of deferred acquisition costs 4,188 1,805
Acquisition costs deferred (4,934) (2,273)
Realized investment gains (286) (681)
Increase in insurance reserves 8,450 10,163
Depreciation and amortization 544 557
Increase in receivables, net (8,728) (8,380)
Decrease in other liabilities (2,587) (861)
Other, net 97 1,430
---------------------
Net cash provided by continuing operations 128 1,080
Net cash used by discontinued operations - (5,902)
---------------------
Net cash provided (used) by operating
activities 128 (4,822)
---------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from investments sold or matured 24,663 56,741
Investments purchased (34,553) (42,727)
Reduction in minority interest liability payable (54) (698)
Additions to property and equipment (346) (404)
---------------------
Net cash (used) provided by continuing
operations (10,290) 12,912
Net cash used by discontinued operations - (440)
---------------------
Net cash (used) provided by investing
activities (10,290) 12,472
---------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Preferred stock dividends (158) (158)
Proceeds from exercise of stock options 48 9
Purchase of treasury shares (493) (22)
Repayments of debt (2,000) (6,300)
---------------------
Net cash used by continuing operations (2,603) (6,471)
Net cash provided discontinued operations - 6,342
---------------------
Net cash used by financing activities (2,603) (129)
---------------------
Net (decrease) increase in cash and cash
equivalents (12,765) 7,521
Cash and cash equivalents at beginning of period 45,499 15,069
---------------------
Cash and cash equivalents at end of period $ 32,734 $22,590
=====================
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ (1,527) $(1,989)
=====================
Cash paid for income taxes $ (85) $ (27)
=====================
The accompanying notes are an integral part of these financial statements.
-4-
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
Note 1. Basis of presentation.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. All significant intercompany accounts and transactions have been
eliminated in consolidation. Operating results for the six month period ended
June 30, 1997, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997. For further information, refer
to the financial statements and footnotes thereto included in the Company's
annual report on Form 10-K for the year ended December 31, 1996.
-5-
Item 2. Management's Discussion and Analysis of Financial Condition and Results
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of Operations
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Management's discussion of financial condition and results of operations
for the periods ended June 30, 1997 and 1996 analyzes the results of operations,
consolidated financial condition, liquidity and capital resources of Atlantic
American Corporation (the "Company") and its consolidated subsidiaries: Georgia
Casualty & Surety Company ("Georgia Casualty"), American Southern Insurance
Company ("American Southern" and together with Georgia Casualty, the "Casualty
Division"), and Bankers Fidelity Life Insurance Company (the "Life and Health
Division"). Effective January 1, 1997, Atlantic American Life Insurance Company,
which was a wholly-owned subsidiary of the Company, was merged with and into
Bankers Fidelity.
The Company's net income for the second quarter of 1997 was $1.4 million
($0.06 per share) compared with net income from continuing operations of $1.8
million ($0.08 per share) for the second quarter of 1996. Net income
year-to-date for 1997 was $3.4 million ($0.14 per share) compared with net
income from continuing operations of $3.8 million ($0.16 per share) in 1996. The
primary reason for the decline in earnings for the second quarter and
year-to-date was an increase in insurance benefits and losses incurred of 7% for
the quarter and 5% year-to-date.
Georgia Casualty earned $494,000 in the second quarter of 1997 and $1.1
million year-to-date compared with $366,000 and $1.1 million, respectively, for
the same periods in 1996. The improvement in operating income for the quarter
was mainly due to an increase in premiums of $331,000, an increase in realized
gains of $151,000, and a decrease in commissions and underwriting expenses of
$152,000. An increase of $489,000 in benefits and losses mitigated these
improvements. Year-to-date earnings remained constant due to offsetting
increases in total revenue and decreases in total expenses.
American Southern earned $1.1 million for the quarter and $2.6 million
year-to-date compared with $1.4 million and $2.9 million, respectively, for the
same periods in 1996. The decline in earnings for the quarter is due to a
$490,000 decrease in premiums that was partially offset by a $164,000 increase
in investment income. Year-to-date earnings fell primarily because of an
$839,000 increase in insurance benefits and losses incurred, which were
partially offset by increases of $228,000 in premiums and $280,000 in investment
income.
The Life and Health Division earned $511,000 and $1.0 million for the
second quarter and year-to-date, respectively, for 1997, compared with $960,000
and $1.5 million, respectively, for 1996. Quarter- and year-to-date earnings
fell primarily because of increases of $667,000 and $630,000, respectively, in
insurance benefits and losses incurred. In the second quarter investment income
decreased by $148,000, thus compounding the decline in earnings. However, a
decline of $342,000 in commissions and underwriting expenses during the second
quarter offset the decrease in earnings.
The Company announced on February 21, 1996, its intention to sell its
interest in Leath Furniture and its subsidiaries. Therefore, beginning with the
fourth quarter of 1995, the Company began reporting the results from its
furniture operations as discontinued operations. The Company completed the sale
of Leath Furniture on April 8, 1996, which, as anticipated, resulted in a loss.
The loss reported in the second quarter of 1996 and for the first six months of
1996 was $4.4 million ($0.24 per share).
RESULTS OF OPERATIONS
Total revenue decreased modestly to $24.3 million and $49.0 million in the
second quarter and first half, respectively, of 1997 from $24.4 million and
$49.2 million, respectively, for the comparable periods in 1996. Total revenue
decreased in the second quarter of 1997 mainly due to a $229,000 decrease in
premium revenue. Decreases in investment income of $42,000 and in other income
of $41,000 represented the balance of the decline in revenue. An increase in
realized gains of $237,000 offset these decreases. Total revenue decreased
year-to-date mainly due to a decline in realized gains of $395,000. The balance
of the decline in revenue is due to a decrease of $77,000 in other income,
offset by increases in premiums of $160,000 and in investment income of
$154,000.
-6-
Declines of $69,000 in the Life and Health Division and $490,000 for
American Southern resulted in the decrease in premium revenue for the quarter.
An increase of $331,000 for Georgia Casualty offset this decrease in premiums.
The Life and Health Division's decline in premiums was the result of a 3% drop
in Life lines of business offset by a less than 1% increase in accident and
health premiums. The increase in Georgia Casualty's premiums for the quarter was
generated from the business automobile and general liability markets, which
increased $392,000 and $366,000 respectively.
A $228,000 increase in American Southern's premiums, primarily in the
automobile line, resulted in higher premium revenue for the year. However,
declines in the Life and Health Division's premiums of $51,000 and in Georgia
Casualty's premiums of $16,000 partially offset American Southern's increase.
The Life and Health Division's accident and health premiums fell $84,000 due
primarily to a 25% drop in Hospital premiums. A slight increase in life premiums
of less than 1% offset the decline in accident and health premiums. Georgia
Casualty experienced a decline of $1.1 million in workers' compensation
premiums. However, increases of $851,000, $45,000, and $222,000 in the business
automobile, general liability, and property markets, respectively, more than
offset these declines. Workers' compensation premiums declined as a result of
the competitive nature of the soft insurance market. These market conditions can
cause decreases of 25% to 30% on policy renewals. The drop in average premium
per workers' compensation policy was offset partially by an overall increase in
the number of workers' compensation policies. The automobile and property
insurance lines experienced increased premiums because these trial niche markets
were expanded to include more agents.
Investment income decreased in the second quarter by $42,000 but increased
year-to-date by $154,000 principally due to the increase in funds available for
investment in the first quarter. Management has continued to focus on increasing
the Company's investments in short and medium maturity bonds and government
backed securities. The carrying value of funds available for investment (which
includes cash and short-term investments, bonds, and common and preferred
stocks) at June 30, 1997, increased approximately $3.1 million. This increase
was mainly due to acquisitions of government bonds totaling $15.4 million while
short-term investments declined by $11.6 million.
Realized investment gains for the second quarter increased $237,000 from
the same period in 1996 primarily due to improved market prices. Realized gains
for the year fell $395,000 from 1996 due to a market downturn during the first
quarter of 1997. Due to unfavorable market conditions, the Company chose to hold
certain investments rather than sell at the lower market prices.
Insurance benefits and losses increased to $14.9 million for the second
quarter of 1997 from $14.0 million for the same quarter of 1996, and
year-to-date they increased to $29.5 million from $28.0 million in 1996. The
Casualty Division experienced increases of $349,000 in the second quarter and
$849,000 in the first half of the year. Increases of $667,000 and $630,000 in
the second quarter and first half of 1997, respectively, were attributed to the
Life and Health Division. These increases resulted from higher claims expense
for the quarter of $2.6 million and for the year of $1.9 million. A decline in
reserves for the quarter of $1.6 million and for the year of $476,000 partially
offset these higher claims.
As a percentage of premium revenue, insurance benefits and losses
increased to 70.36% in the second quarter of 1997 from 65.02% in 1996 and to
68.53% year-to-date for 1997 from 65.46% in 1996. The percentage of insurance
benefits and losses incurred to premium for the second quarter and year-to-date
for each of the subsidiaries were as follows:
QTD YTD
-------------------------------------------------------
1997 1996 1997 1996
-------------------------------------------------------
Life and Health Division 63.12% 52.16% 60.36% 55.24%
Georgia Casualty 67.68% 62.40% 64.19% 64.55%
American Southern 76.25% 74.03% 75.58% 72.32%
-7-
Commission and underwriting expenses in the first six months decreased to
$11.8 million in 1997 from $12.6 million in 1996. This decrease was primarily
due to a decrease in commissions of $274,000, a decrease in underwriting
expenses of $305,000, and a net deferral of acquisition costs of $278,000.
Commissions declined $168,000 in the Casualty Division and $106,000 in the Life
and Health Division for the first half of 1997. Underwriting expenses decreased
$235,000 and $348,000 in the Casualty Division and in the Life and Health
Division, respectively. The Life and Health Division periodically reevaluates
deferred acquisition costs and their related amortization periods and also the
benefit reserves that are established on life, accident and health policies. In
1997 the Division modified its methodology for recording and amortizing deferred
acquisition costs for the final expense line to more appropriately reflect the
current expenses related to acquiring these policies. The net effect of this
change in estimate contributed to the performance of the Life and Health
Division.
Interest expense for the second quarter of 1997 was $738,000 compared with
$801,000 for the second quarter of 1996. Interest expense for the first half of
1997 was $1.5 million compared with $1.7 million for the same period in 1996.
Lower interest expense resulted from repayments, since March 31, 1996, of $6.0
million on the American Southern acquisition loan and $5.3 million of affiliated
debt.
LIQUIDITY AND CAPITAL RESOURCES
The Company's insurance subsidiaries reported a combined statutory income
of $1.1 million and $3.2 million in the second quarter and first half of 1997,
compared with $2.1 million and $4.2 million for the same periods in 1996. These
quarterly statutory results were attributable to income of $27,000 in the Life
and Health Division, $222,000 for Georgia Casualty, and $861,000 for American
Southern. Statutory income for the first half of 1997 was $533,000 in the Life
and Health Division, $765,000 for Georgia Casualty, and $1.9 million for
American Southern.
In connection with the acquisition of American Southern on December 31,
1995, the Company entered into a Credit Agreement with Wachovia Bank of Georgia,
N.A. ("Wachovia"). At June 30, 1997, the Company's outstanding borrowings under
this agreement were approximately $28.0 million, of which $2.0 million will
become due and payable during the last six months of 1997. The Company repaid
$2.0 million of outstanding principal during the first half of 1997 as scheduled
under the terms of the agreement. The Company intends to repay its obligations
under the Credit Agreement using dividend payments received from its
subsidiaries and receipts from its tax sharing agreement.
On May 15, 1997, the Company received financing from Wachovia pursuant to
its existing credit agreement in the amount of $5.6 million. These funds were
used to retire the $5.6 million in outstanding principal of the Company's 8%
Convertible Subordinated Notes, which matured on May 15, 1997. The note payable
to Wachovia is due December 31, 2000, and interest is payable quarterly in
arrears.
On July 15, 1997, the Company announced that Bankers Fidelity reached a
definitive agreement to acquire American Independent Life Insurance Company.
Approximate consideration to be given is $2.9 million in cash and a $700,000
promissory note. American Independent Life Insurance Company, headquartered in
King of Prussia, Pennsylvania, specializes in traditional life insurance and
supplemental health insurance. The acquisition is subject to regulatory approval
and is expected to be completed by the end of the third quarter of 1997.
The Company provides certain administrative and other services to each of
its insurance subsidiaries. The amounts charged to and paid by the subsidiaries
in 1997 remained approximately the same as in 1996. In addition the Company has
a formal tax-sharing agreement between the Company and its insurance
subsidiaries. It is anticipated that this agreement will provide the Company
with additional funds from profitable subsidiaries due to the subsidiaries' use
of the Company's tax loss carryforwards, which totaled approximately $50.7
million at June 30, 1997. The Company believes that the fees and charges it
receives from its subsidiaries and, if needed, borrowings from banks and
affiliates of the Company will enable the Company to meet its liquidity
requirements for the foreseeable future. Management is not aware of any current
recommendations by regulatory authorities that, if implemented, would have a
material adverse effect on the Company's liquidity, capital resources, or
operations.
-8-
American Southern acts as a reinsurer with respect to all of the risks
associated with certain automobile policies issued by a state administrative
agency and naming the state and various local governmental entities as insureds.
Premiums written from such policies constituted between 38% and 32% of American
Southern's gross premiums written in 1992 through 1996. This account is eligible
for renewal in February 1998, and management believes that its relationship with
such agency is good. However, the loss of such agency as a customer could have a
material adverse effect on the financial condition of the Company.
At June 30, 1997, the Company had a net cumulative deferred tax asset of
zero. The net cumulative deferred tax asset consisted of $24.8 million of
deferred tax assets, offset by $10.2 million of deferred tax liabilities, and
a$14.6 million valuation allowance. Due to the uncertain nature of their
ultimate realization based upon past performance and expiration dates, the
Company established a full valuation allowance against these carryforward
benefits and recognizes the benefits only as reassessment demonstrates they are
realizable. The Company's ability to generate taxable income from operations is
dependent upon various factors, many of which are beyond management's control.
Accordingly, based on historical performance, there can be no assurance that the
Company will generate future taxable income. Therefore, the realization of the
deferred tax assets will be assessed periodically based on the Company's current
and anticipated results of operations.
At June 30, 1997, approximately 95.0% of the investment assets of the
insurance subsidiaries were in marketable securities that could be converted
into cash, if required. However, state insurance regulations limit use of such
assets by the Company. Dividend payments to the Company by its insurance
subsidiaries are also limited by insurance regulations. At June 30, 1997, the
subsidiaries' accumulated statutory earnings were as follows: Georgia Casualty -
$9.9 million, American Southern - $18.4 million, and Bankers Fidelity - $18.1
million. American Southern paid the Company dividends totaling $1.8 million in
the first six months of 1997. Bankers Fidelity paid the Company a dividend
totaling $1.0 million in the second quarter of 1997.
Net cash provided by operating activities totaled $128,000 in 1997,
compared with net cash provided by continuing operations of $382,000 in the
first half of 1996. The decline in cash provided by operations was primarily due
to higher claims paid year-to-date by Georgia Casualty of $208,000 and Bankers
Fidelity of $874,000. Cash used by these subsidiaries was offset by cash
provided by American Southern of $1.9 million.
Cash and short-term investments decreased from $45.5 million at December
31, 1996, to $32.7 million at June 30, 1997. This decrease was primarily the
result of investment purchases exceeding investment sales during the second
quarter. American Southern's net investment activities used cash of $8.9
million, and Bankers Fidelity's net investment activities used cash of $2.3
million. In addition, the Company paid $1.0 million for a principal maturity on
the American Southern acquisition loan. Total investments (excluding short-term
investments) increased to $154.3 million at June 30, 1997, from $142.5 million
at December 31, 1996, due to additional investment purchases, primarily bonds,
made during the second quarter.
-9-
PART II. OTHER INFORMATION
ATLANTIC AMERICAN CORPORATION AND SUBSIDIARIES
Item 4. Submission of matters to a vote of security-holders.
- -------------------------------------------------------------
On May 6, 1997, the shareholders of the Company cast the following votes at
the annual meeting of shareholders for the election of directors of the Company,
for approval of the 1996 Director Plan, and the appointment of Arthur Andersen
LLP as the Company's auditors.
Election of Directors Shares Voted
- ------------------------------------------- ----------------------------------
Director Nominee For Withheld
- ---------------- --- --------
J. Mack Robinson 16,920,802 22,579
Hilton H. Howell, Jr. 16,922,641 20,740
Samuel E. Hudgins 16,912,716 30,665
D. Raymond Riddle 16,912,716 30,665
Harriett J. Robinson 16,919,937 23,444
Scott G. Thompson 16,922,716 20,665
William H. Whaley, M.D. 16,921,624 21,757
Dom H. Wyant 16,910,734 32,647
1996 Director Plan Shares Voted
- ------------------------------------------- ----------------------------------
For Against Abstain
--- ------- -------
16,802,012 94,881 46,488
Appointment of Independent
Public Accountants Shares Voted
- ------------------------------------------- ----------------------------------
For Against Abstain
--- ------- -------
Arthur Andersen LLP 16,908,221 10,165 24,995
Item 6. Exhibits and Report on Form 8-K
- -----------------------------------------
(a) The following exhibits are filed herewith:
Exhibit 11. Computation of net loss per common share.
Exhibit 27. Financial data schedule.
Exhibit 99.1 Press release issued July 15, 1997
(b) No reports on Form 8-K were filed with the Securities and
Exchange Commission during the second quarter of 1997.
-10-
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ATLANTIC AMERICAN CORPORATION
(Registrant)
Date: August 14, 1997 By: /s/
--------------- ----------------------------------------------
John W. Hancock
Senior Vice President-Treasurer
(Principal Financial and Accounting Officer)
-11-