☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Georgia
|
58-1027114
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
4370 Peachtree Road, N.E.,
Atlanta, Georgia
|
30319
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, par value $1.00 per share
|
AAME
|
NASDAQ Global Market
|
Part I.
|
Financial Information
|
|
Item 1.
|
2
|
|
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
Item 2.
|
16 | |
Item 4.
|
21
|
|
Part II.
|
Other Information
|
|
Item 2.
|
22
|
|
Item 6.
|
22
|
|
23 |
Unaudited
March 31,
2021
|
December 31,
2020
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
20,446
|
$
|
19,319
|
||||
Investments:
|
||||||||
Fixed maturities, available-for-sale, at fair value (amortized cost: $229,024 and $222,461)
|
246,801
|
254,106
|
||||||
Equity securities, at fair value (cost: $4,833 and $6,393)
|
17,900
|
18,716
|
||||||
Other invested assets (cost: $3,765 and $3,765)
|
3,183
|
3,238
|
||||||
Policy loans
|
1,963
|
1,975
|
||||||
Real estate
|
38
|
38
|
||||||
Investment in unconsolidated trusts
|
1,238
|
1,238
|
||||||
Total investments
|
271,123
|
279,311
|
||||||
Receivables:
|
||||||||
Reinsurance
|
29,511
|
29,086
|
||||||
Insurance premiums and other (net of allowance for doubtful accounts: $185 and $198)
|
9,850
|
27,512
|
||||||
Deferred income taxes, net
|
2,103
|
—
|
||||||
Deferred acquisition costs
|
38,098
|
39,611
|
||||||
Other assets
|
9,452
|
7,804
|
||||||
Intangibles
|
2,544
|
2,544
|
||||||
Total assets
|
$
|
383,127
|
$
|
405,187
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Insurance reserves and policyholder funds:
|
||||||||
Future policy benefits
|
$
|
89,017
|
$
|
90,872
|
||||
Unearned premiums
|
20,505
|
27,131
|
||||||
Losses and claims
|
81,285
|
79,147
|
||||||
Other policy liabilities
|
1,176
|
1,526
|
||||||
Total insurance reserves and policyholder funds
|
191,983
|
198,676
|
||||||
Accounts payable and accrued expenses
|
24,171
|
26,412
|
||||||
Deferred income taxes, net
|
—
|
1,301
|
||||||
Junior subordinated debenture obligations, net
|
33,738
|
33,738
|
||||||
Total liabilities
|
249,892
|
260,127
|
||||||
Commitments and contingencies (Note 10)
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock, $1 par, 4,000,000 shares authorized; Series D preferred, 55,000 shares issued and outstanding; $5,500 redemption value
|
55
|
55
|
||||||
Common stock, $1 par, 50,000,000 shares authorized; shares issued: 22,400,894; shares outstanding: 20,415,782 and 20,415,243
|
22,401
|
22,401
|
||||||
Additional paid-in capital
|
57,438
|
57,437
|
||||||
Retained earnings
|
46,852
|
47,790
|
||||||
Accumulated other comprehensive income
|
14,044
|
25,000
|
||||||
Unearned stock grant compensation
|
(217
|
)
|
(284
|
)
|
||||
Treasury stock, at cost: 1,985,112 and 1,985,651 shares
|
(7,338
|
)
|
(7,339
|
)
|
||||
Total shareholders’ equity
|
133,235
|
145,060
|
||||||
Total liabilities and shareholders’ equity
|
$
|
383,127
|
$
|
405,187
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Revenue:
|
||||||||
Insurance premiums, net
|
$
|
46,090
|
$
|
45,550
|
||||
Net investment income
|
2,113
|
2,039
|
||||||
Realized investment gains, net
|
121
|
249
|
||||||
Unrealized gains (losses) on equity securities, net
|
744
|
(8,455
|
)
|
|||||
Other income
|
7
|
27
|
||||||
Total revenue
|
49,075
|
39,410
|
||||||
Benefits and expenses:
|
||||||||
Insurance benefits and losses incurred
|
33,272
|
33,583
|
||||||
Commissions and underwriting expenses
|
12,564
|
12,626
|
||||||
Interest expense
|
346
|
476
|
||||||
Other expense
|
3,440
|
2,952
|
||||||
Total benefits and expenses
|
49,622
|
49,637
|
||||||
Loss before income taxes
|
(547
|
)
|
(10,227
|
)
|
||||
Income tax benefit
|
(116
|
)
|
(2,140
|
)
|
||||
Net loss
|
(431
|
)
|
(8,087
|
)
|
||||
Preferred stock dividends
|
(99
|
)
|
(99
|
)
|
||||
Net loss applicable to common shareholders
|
$
|
(530
|
)
|
$
|
(8,186
|
)
|
||
Loss per common share (basic and diluted)
|
$
|
(.03
|
)
|
$
|
(.40
|
)
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Net loss
|
$
|
(431
|
)
|
$
|
(8,087
|
)
|
||
Other comprehensive loss:
|
||||||||
Available-for-sale fixed maturity securities:
|
||||||||
Gross unrealized holding loss arising in the period
|
(13,747
|
)
|
(10,880
|
)
|
||||
Related income tax effect
|
2,887
|
2,285
|
||||||
Subtotal
|
(10,860
|
)
|
(8,595
|
)
|
||||
Less: reclassification adjustment for net realized gains included in net loss
|
(121
|
)
|
(249
|
)
|
||||
Related income tax effect
|
25
|
52
|
||||||
Subtotal
|
(96
|
)
|
(197
|
)
|
||||
Total other comprehensive loss, net of tax
|
(10,956
|
)
|
(8,792
|
)
|
||||
Total comprehensive loss
|
$
|
(11,387
|
)
|
$
|
(16,879
|
)
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Preferred stock:
|
||||||||
Balance, beginning of period
|
$
|
55
|
$
|
55
|
||||
Balance, end of period
|
55
|
55
|
||||||
Common stock:
|
||||||||
Balance, beginning of period
|
22,401
|
22,401
|
||||||
Balance, end of period
|
22,401
|
22,401
|
||||||
Additional paid-in capital:
|
||||||||
Balance, beginning of period
|
57,437
|
57,820
|
||||||
Restricted stock grants, net of forfeitures
|
—
|
(44
|
)
|
|||||
Issuance of 539 and 1,204 shares, as of 2021 and 2020, respectively, under stock plans
|
1
|
1
|
||||||
Balance, end of period
|
57,438
|
57,777
|
||||||
Retained earnings:
|
||||||||
Balance, beginning of period
|
47,790
|
36,020
|
||||||
Net loss
|
(431
|
)
|
(8,087
|
)
|
||||
Dividends on common stock
|
(408
|
)
|
—
|
|||||
Dividends accrued on preferred stock
|
(99
|
)
|
(99
|
)
|
||||
Balance, end of period
|
46,852
|
27,834
|
||||||
Accumulated other comprehensive income (loss):
|
||||||||
Balance, beginning of period
|
25,000
|
10,459
|
||||||
Other comprehensive loss, net of tax
|
(10,956
|
)
|
(8,792
|
)
|
||||
Balance, end of period
|
14,044
|
1,667
|
||||||
Unearned Stock Grant Compensation:
|
||||||||
Balance, beginning of period
|
(284
|
)
|
(781
|
)
|
||||
Restricted stock grants, net of forfeitures
|
—
|
98
|
||||||
Amortization of unearned compensation
|
67
|
99
|
||||||
Balance, end of period
|
(217
|
)
|
(584
|
)
|
||||
Treasury Stock:
|
||||||||
Balance, beginning of period
|
(7,339
|
)
|
(7,580
|
)
|
||||
Restricted stock grants, net of forfeitures
|
—
|
(54
|
)
|
|||||
Issuance of 539 and 1,204 shares, as of 2021 and 2020, respectively, under stock plans
|
1
|
2
|
||||||
Balance, end of period
|
(7,338
|
)
|
(7,632
|
)
|
||||
Total shareholders’ equity
|
$
|
133,235
|
$
|
101,518
|
||||
Dividends declared on common stock per share
|
$
|
0.02
|
$
|
—
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(431
|
)
|
$
|
(8,087
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Amortization of acquisition costs, net
|
1,513
|
556
|
||||||
Realized investment gains, net
|
(121
|
)
|
(249
|
)
|
||||
Unrealized (gains) losses on equity securities, net
|
(744
|
)
|
8,455
|
|||||
Compensation expense related to share awards
|
67
|
99
|
||||||
Depreciation and amortization
|
264
|
251
|
||||||
Deferred income tax benefit
|
(492
|
)
|
(2,269
|
)
|
||||
Decrease in receivables, net
|
4,559 |
3,218
|
||||||
Decrease in insurance reserves and policyholder funds
|
(6,693
|
)
|
(9,060
|
)
|
||||
Decrease in accounts payable and accrued expenses
|
(2,250
|
)
|
(3,928
|
)
|
||||
Other, net
|
(1,716
|
)
|
502
|
|||||
Net cash used in operating activities
|
(6,044
|
) |
(10,512
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from investments sold
|
13,266
|
5,641
|
||||||
Proceeds from investments matured, called or redeemed
|
4,506
|
2,555
|
||||||
Investments purchased
|
(10,564
|
)
|
(2,204
|
)
|
||||
Additions to property and equipment
|
(39
|
)
|
(38
|
)
|
||||
Net cash provided by investing activities
|
7,169
|
|
5,954
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from shares issued under stock plans
|
2
|
3
|
||||||
Net cash provided by financing activities
|
2
|
3
|
||||||
Net increase (decrease) in cash and cash equivalents
|
1,127
|
(4,555
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
19,319
|
12,893
|
||||||
Cash and cash equivalents at end of period
|
$
|
20,446
|
$
|
8,338
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Cash paid for interest
|
$
|
351
|
$
|
491
|
Note 1. |
Basis of Presentation
|
Note 2. |
Recently Issued Accounting Standards
|
Note 3. |
Investments
|
March 31, 2021
|
||||||||||||||||
Estimated
Fair Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Cost or
Amortized
Cost
|
|||||||||||||
Fixed maturities:
|
||||||||||||||||
Bonds:
|
||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies and authorities
|
$
|
34,639
|
$
|
788
|
$
|
260
|
$
|
34,111
|
||||||||
Obligations of states and political subdivisions
|
11,559
|
658
|
—
|
10,901
|
||||||||||||
Corporate securities:
|
||||||||||||||||
Utilities and telecom
|
29,295
|
2,505
|
137
|
26,927
|
||||||||||||
Financial services
|
74,847
|
6,254
|
271
|
68,864
|
||||||||||||
Other business – diversified
|
38,959
|
3,277
|
264
|
35,946
|
||||||||||||
Other consumer – diversified
|
57,252
|
5,348
|
179
|
52,083
|
||||||||||||
Total corporate securities
|
200,353
|
17,384
|
851
|
183,820
|
||||||||||||
Redeemable preferred stocks:
|
||||||||||||||||
Other consumer – diversified
|
250
|
58
|
—
|
192
|
||||||||||||
Total redeemable preferred stocks
|
250
|
58
|
—
|
192
|
||||||||||||
Total fixed maturities
|
$
|
246,801
|
$
|
18,888
|
$
|
1,111
|
$
|
229,024
|
December 31, 2020
|
||||||||||||||||
Estimated
Fair Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Cost or
Amortized
Cost
|
|||||||||||||
Fixed maturities:
|
||||||||||||||||
Bonds:
|
||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies and authorities
|
$
|
30,762
|
$
|
1,381
|
$
|
26
|
$
|
29,407
|
||||||||
Obligations of states and political subdivisions
|
11,802
|
898
|
—
|
10,904
|
||||||||||||
Corporate securities:
|
||||||||||||||||
Utilities and telecom
|
30,359
|
4,423
|
—
|
25,936
|
||||||||||||
Financial services
|
78,258
|
9,811
|
6
|
68,453
|
||||||||||||
Other business – diversified
|
41,145
|
5,689
|
15
|
35,471
|
||||||||||||
Other consumer – diversified
|
61,530
|
9,479
|
47
|
52,098
|
||||||||||||
Total corporate securities
|
211,292
|
29,402
|
68
|
181,958
|
||||||||||||
Redeemable preferred stocks:
|
||||||||||||||||
Other consumer – diversified
|
250
|
58
|
—
|
192
|
||||||||||||
Total redeemable preferred stocks
|
250
|
58
|
—
|
192
|
||||||||||||
Total fixed maturities
|
$
|
254,106
|
$
|
31,739
|
$
|
94
|
$
|
222,461
|
March 31, 2021
|
||||||||||||||||
Estimated
Fair Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Cost or
Amortized
Cost
|
|||||||||||||
Equity securities:
|
||||||||||||||||
Common and non-redeemable preferred stocks:
|
||||||||||||||||
Financial services
|
$
|
624
|
$
|
424
|
$
|
—
|
$
|
200
|
||||||||
Other business – diversified
|
17,276
|
12,643
|
—
|
4,633
|
||||||||||||
Total equity securities
|
$
|
17,900
|
$
|
13,067
|
$
|
—
|
$
|
4,833
|
December 31, 2020
|
||||||||||||||||
Estimated
Fair Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Cost or
Amortized
Cost
|
|||||||||||||
Equity securities:
|
||||||||||||||||
Common and non-redeemable preferred stocks:
|
||||||||||||||||
Financial services
|
$
|
2,111
|
351
|
—
|
1,760
|
|||||||||||
Other business – diversified
|
16,605
|
11,972
|
—
|
4,633
|
||||||||||||
Total equity securities
|
$
|
18,716
|
$
|
12,323
|
$
|
—
|
$
|
6,393
|
March 31, 2021
|
December 31, 2020
|
|||||||||||||||
Carrying
Value
|
Amortized
Cost
|
Carrying
Value
|
Amortized
Cost
|
|||||||||||||
Due in one year or less
|
$
|
3,031
|
$
|
3,001
|
$
|
2,041
|
$
|
2,015
|
||||||||
Due after one year through five years
|
16,633
|
15,539
|
18,373
|
17,039
|
||||||||||||
Due after five years through ten years
|
86,651
|
80,529
|
89,892
|
79,993
|
||||||||||||
Due after ten years
|
116,883
|
106,365
|
124,609
|
104,527
|
||||||||||||
Asset backed securities
|
23,603
|
23,590
|
19,191
|
18,887
|
||||||||||||
Totals
|
$
|
246,801
|
$
|
229,024
|
$
|
254,106
|
$
|
222,461
|
March 31, 2021
|
||||||||||||||||||||||||
Less than 12 months
|
12 months or longer
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
U.S. Treasury securities and obligations of U.S. Government agencies and authorities
|
$
|
12,883
|
$
|
260
|
$
|
—
|
$
|
—
|
$
|
12,883
|
$
|
260
|
||||||||||||
Corporate securities
|
19,095
|
851
|
—
|
—
|
19,095
|
851
|
||||||||||||||||||
Total temporarily impaired securities
|
$
|
31,978
|
$
|
1,111
|
$
|
—
|
$
|
—
|
$
|
31,978
|
$
|
1,111
|
December 31, 2020
|
||||||||||||||||||||||||
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
|
$
|
7,045
|
$
|
26
|
$
|
—
|
$
|
—
|
$
|
7,045
|
$
|
26
|
||||||||||||
Corporate securities
|
4,602
|
68
|
—
|
—
|
4,602
|
68
|
||||||||||||||||||
Total temporarily impaired securities
|
$
|
11,647
|
$
|
94
|
$
|
—
|
$
|
—
|
$
|
11,647
|
$
|
94
|
Three Months Ended
March 31, 2021
|
||||||||||||||||
Fixed
Maturities
|
Equity
Securities
|
Other
Invested
Assets
|
Total
|
|||||||||||||
Gains
|
$
|
121
|
$
|
—
|
$
|
—
|
$
|
121
|
||||||||
Losses
|
—
|
—
|
—
|
—
|
||||||||||||
Realized investment gains, net
|
$
|
121
|
$
|
—
|
$
|
—
|
$
|
121
|
Three Months Ended
March 31, 2020
|
||||||||||||||||
Fixed
Maturities
|
Equity
Securities
|
Other
Invested
Assets
|
Total
|
|||||||||||||
Gains
|
$
|
249
|
$
|
—
|
$
|
—
|
$
|
249
|
||||||||
Losses
|
—
|
—
|
—
|
—
|
||||||||||||
Realized investment gains, net
|
$
|
249
|
$
|
—
|
$
|
—
|
$
|
249
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Net realized and unrealized gains (losses) recognized during the period on equity securities
|
$
|
744
|
$
|
(8,455
|
)
|
|||
Less: Net realized gains (losses) recognized during the period on equity securities sold during the period
|
—
|
—
|
||||||
Unrealized gains (losses) recognized during the reporting period on equity securities, net
|
$
|
744
|
$
|
(8,455
|
)
|
Note 4. |
Fair Values of Financial Instruments
|
Level 1 |
Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. The Company’s financial instruments valued using Level 1 criteria
include cash equivalents and exchange traded common stocks.
|
Level 2 |
Observable inputs, other than quoted prices included in Level 1, for an asset or liability or prices for similar assets or liabilities. The Company’s financial instruments valued using Level 2 criteria include significantly most of its
fixed maturities, which consist of U.S. Treasury securities, U.S. Government securities, obligations of states and political subdivisions, and certain corporate fixed maturities, as well as its non-redeemable preferred stocks. In
determining fair value measurements of its fixed maturities and non-redeemable preferred stocks using Level 2 criteria, the Company utilizes data from outside sources, including nationally recognized pricing services and broker/dealers.
Prices for the majority of the Company’s Level 2 fixed maturities and non-redeemable preferred stocks were determined using unadjusted prices received from pricing services that utilize models where the significant inputs are observable
(e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data.
|
Level 3 |
Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Fair value is based on criteria that use assumptions or other data that are not readily
observable from objective sources. With little or no observable market, the determination of fair values uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the
asset or liability. The Company’s financial instruments valued using Level 3 criteria consist of two fixed maturity securities and one equity security. As of March 31, 2021 and December 31, 2020, the value of the fixed maturities valued
using Level 3 criteria was $250 and $0, respectively. As of March 31, 2021 and December 31, 2020, the value of the equity security valued using Level 3 criteria was $83 and $143, respectively. The equity security is not traded and valued
at cost. The use of different criteria or assumptions regarding data may have yielded materially different valuations.
|
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
|
$
|
—
|
$
|
246,551
|
$
|
250
|
$
|
246,801
|
||||||||
Equity securities
|
17,817
|
—
|
83
|
17,900
|
||||||||||||
Cash equivalents
|
9,011
|
—
|
—
|
9,011
|
||||||||||||
Total
|
$
|
26,828
|
$
|
246,551
|
$
|
333
|
$
|
273,712
|
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
|
$
|
—
|
$
|
254,106
|
$
|
—
|
$
|
254,106
|
||||||||
Equity securities
|
18,573
|
—
|
143
|
18,716
|
||||||||||||
Cash equivalents
|
12,010
|
—
|
—
|
12,010
|
||||||||||||
Total
|
$
|
30,583
|
$
|
254,106
|
$
|
143
|
$
|
284,832
|
March 31, 2021
|
December 31, 2020
|
|||||||||||||||||||
Level in Fair
Value
Hierarchy (1)
|
Carrying
Amount
|
Estimated
Fair Value
|
Carrying
Amount
|
Estimated
Fair Value
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
Level 1
|
$
|
20,446
|
$
|
20,446
|
$
|
19,319
|
$
|
19,319
|
|||||||||||
Fixed maturities
|
(1)
|
|
246,801
|
246,801
|
254,106
|
254,106
|
||||||||||||||
Equity securities
|
(1)
|
17,900
|
17,900
|
18,716
|
18,716
|
|||||||||||||||
Other invested assets
|
Level 3
|
3,183
|
3,183
|
3,238
|
3,238
|
|||||||||||||||
Policy loans
|
Level 2
|
1,963
|
1,963
|
1,975
|
1,975
|
|||||||||||||||
Investment in unconsolidated trusts
|
Level 2
|
1,238
|
1,238
|
1,238
|
1,238
|
|||||||||||||||
Liabilities:
|
||||||||||||||||||||
Junior subordinated debentures, net
|
Level 2
|
33,738
|
34,021
|
33,738
|
32,297
|
(1) |
See the aforementioned information for a description of the fair value hierarchy as well as a disclosure of levels for classes of these financial assets.
|
Note 5. |
Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross
|
$
|
79,147
|
$
|
81,448
|
||||
Less: Reinsurance recoverable on unpaid losses
|
(17,600
|
)
|
(18,339
|
)
|
||||
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net
|
61,547
|
63,109
|
||||||
Incurred related to:
|
||||||||
Current accident year
|
32,928
|
35,985
|
||||||
Prior accident year development (1)
|
475
|
(2)
|
(2,583
|
)(3)
|
||||
Total incurred
|
33,403
|
33,402
|
||||||
Paid related to:
|
||||||||
Current accident year
|
10,917
|
14,008
|
||||||
Prior accident years
|
20,984
|
20,856
|
||||||
Total paid
|
31,901
|
34,864
|
||||||
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net
|
63,049
|
61,647
|
||||||
Plus: Reinsurance recoverable on unpaid losses
|
18,236
|
18,548
|
||||||
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross
|
$
|
81,285
|
$
|
80,195
|
(1) |
In establishing property and casualty reserves, the Company initially reserves for losses at the higher end of the reasonable range if no other value within the range is determined to be more probable. Selection of such an initial loss
estimate is an attempt by management to give recognition that initial claims information received generally is not conclusive with respect to legal liability, is generally not comprehensive with respect to magnitude of loss and generally,
based on historical experience, will develop more adversely as time passes and more information becomes available. Accordingly, the Company generally experiences reserve redundancies when analyzing the development of prior year losses in a
current period.
|
(2) |
Prior years’ development was primarily the result of unfavorable development in the loss and claim reserves for the Medicare supplement line of business in Bankers Fidelity. Partially offsetting the unfavorable development was favorable
development in the property and casualty operations.
|
(3) |
Prior years’ development was primarily the result of favorable development in the loss and claim reserves for the Medicare supplement line of business in Bankers Fidelity. Rate increases on existing business and the resultant
improvement in rate adequacy was more favorable than expected.
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Total incurred losses
|
$
|
33,403
|
$
|
33,402
|
||||
Cash surrender value and matured endowments
|
247
|
368
|
||||||
Benefit reserve changes
|
(378
|
)
|
(187
|
)
|
||||
Total insurance benefits and losses incurred
|
$
|
33,272
|
$
|
33,583
|
Note 6. |
Junior Subordinated Debentures
|
Atlantic American
Statutory Trust I
|
Atlantic American
Statutory Trust II
|
|||||||
JUNIOR SUBORDINATED DEBENTURES (1) (2)
|
||||||||
Principal amount owed March 31, 2021
|
$
|
18,042
|
$
|
23,196
|
||||
Less: Treasury debt (3)
|
—
|
(7,500
|
)
|
|||||
Net balance March 31, 2021
|
$
|
18,042
|
$
|
15,696
|
||||
Net balance December 31, 2020
|
$
|
18,042
|
$
|
15,696
|
||||
Coupon rate
|
LIBOR + 4.00%
|
LIBOR + 4.10%
|
||||||
Interest payable
|
Quarterly
|
Quarterly
|
||||||
Maturity date
|
December 4, 2032
|
May 15, 2033
|
||||||
Redeemable by issuer
|
Yes
|
Yes
|
||||||
TRUST PREFERRED SECURITIES
|
||||||||
Issuance date
|
December 4, 2002
|
May 15, 2003
|
||||||
Securities issued
|
17,500
|
22,500
|
||||||
Liquidation preference per security
|
$
|
1
|
$
|
1
|
||||
Liquidation value
|
$
|
17,500
|
$
|
22,500
|
||||
Coupon rate
|
LIBOR + 4.00%
|
LIBOR + 4.10%
|
||||||
Distribution payable
|
Quarterly
|
Quarterly
|
||||||
Distribution guaranteed by (4)
|
Atlantic American
Corporation
|
Atlantic American
Corporation
|
(1) |
For each of the respective debentures, the Company has the right at any time, and from time to time, to defer payments of interest on the Junior Subordinated Debentures for a period not exceeding 20 consecutive quarters up to the
debentures’ respective maturity dates. During any such period, interest will continue to accrue and the Company may not declare or pay any cash dividends or distributions on, or purchase, the Company’s common stock nor make any principal,
interest or premium payments on or repurchase any debt securities that rank equally with or junior to the Junior Subordinated Debentures. The Company has the right at any time to dissolve each of the trusts and cause the Junior Subordinated
Debentures to be distributed to the holders of the Trust Preferred Securities.
|
(2) |
The Junior Subordinated Debentures are unsecured and rank junior and subordinate in right of payment to all senior debt of the Parent and are effectively subordinated to all existing and future liabilities of its subsidiaries.
|
(3) |
On August 4, 2014, the Company acquired $7,500 of the Junior Subordinated Debentures.
|
(4) |
The Parent has guaranteed, on a subordinated basis, all of the obligations under the Trust Preferred Securities, including payment of the redemption price and any accumulated and unpaid distributions to the extent of available funds and
upon dissolution, winding up or liquidation.
|
Note 7. |
Loss Per Common Share
|
Three Months Ended
March 31, 2021
|
||||||||||||
Loss
|
Weighted
Average
Shares
(In thousands)
|
Per Share
Amount
|
||||||||||
Basic and Diluted Loss Per Common Share:
|
||||||||||||
Net loss
|
$
|
(431
|
)
|
20,415
|
|
|||||||
Less preferred stock dividends
|
(99
|
)
|
—
|
|||||||||
Net loss applicable to common shareholders
|
$
|
(530
|
)
|
20,415
|
$
|
(.03
|
)
|
Three Months Ended
March 31, 2020
|
||||||||||||
|
Loss
|
Weighted
Average
Shares
(In thousands)
|
Per Share
Amount
|
|||||||||
Basic and Diluted Loss Per Common Share:
|
||||||||||||
Net loss
|
$
|
(8,087
|
)
|
20,470
|
||||||||
Less preferred stock dividends
|
(99
|
)
|
—
|
|||||||||
Net loss applicable to common shareholders
|
$
|
(8,186
|
)
|
20,470
|
$
|
(.40
|
)
|
Note 8. |
Income Taxes
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Federal income tax provision at statutory rate of 21%
|
$
|
(115
|
)
|
$
|
(2,148
|
)
|
||
Dividends-received deduction
|
(9
|
)
|
(3
|
)
|
||||
Other permanent differences
|
8
|
11
|
||||||
Income tax benefit
|
$
|
(116
|
)
|
$
|
(2,140
|
)
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Current – Federal
|
$
|
376
|
$
|
129
|
||||
Deferred – Federal
|
(492
|
)
|
(2,269
|
)
|
||||
Total
|
$
|
(116
|
)
|
$
|
(2,140
|
)
|
Note 9. |
Leases
|
Three Months Ended
March 31,
|
||||||||
Other information on operating leases:
|
2021
|
2020
|
||||||
Cash payments included in the measurement of lease liabilities reported in operating cash flows
|
$
|
251
|
$
|
978
|
||||
Right-of-use assets included in other assets on the condensed consolidated balance sheet
|
4,664
|
5,319
|
||||||
Weighted average discount rate
|
6.8
|
%
|
6.8
|
%
|
||||
Weighted average remaining lease term in years
|
5.6 years
|
6.6 years
|
Lease Liability
|
||||
Remainder of 2021
|
$
|
764
|
||
2022
|
1,031
|
|||
2023
|
1,048
|
|||
2024
|
1,065
|
|||
2025
|
1,083
|
|||
Thereafter
|
942
|
|||
Total undiscounted lease payments
|
5,933
|
|||
Less: present value adjustment
|
1,031
|
|||
Operating lease liability included in accounts payable and accrued expenses on the condensed consolidated balance sheet
|
$
|
4,902
|
Note 10. |
Commitments and Contingencies
|
Note 11. |
Segment Information
|
Assets
|
March 31,
2021
|
December 31,
2020
|
||||||
American Southern
|
$
|
145,081
|
$
|
158,808
|
||||
Bankers Fidelity
|
224,844
|
236,197
|
||||||
Corporate and Other
|
13,202
|
10,182
|
||||||
Total assets
|
$
|
383,127
|
$
|
405,187
|
Three Months Ended
March 31,
|
||||||||
Revenues |
2021
|
2020
|
||||||
American Southern
|
$
|
17,526
|
$
|
15,227
|
||||
Bankers Fidelity
|
31,540
|
24,873
|
||||||
Corporate and Other
|
9
|
(690
|
)
|
|||||
Total revenue
|
$
|
49,075
|
$
|
39,410
|
Three Months Ended
March 31,
|
||||||||
Loss Before Income Taxes
|
2021
|
2020
|
||||||
American Southern
|
$
|
1,490
|
$
|
878
|
||||
Bankers Fidelity
|
134
|
(8,781
|
)
|
|||||
Corporate and Other
|
(2,171
|
)
|
(2,324
|
)
|
||||
Loss before income taxes
|
$
|
(547
|
)
|
$
|
(10,227
|
)
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
(In thousands)
|
||||||||
Insurance premiums, net
|
$
|
46,090
|
$
|
45,550
|
||||
Net investment income
|
2,113
|
2,039
|
||||||
Realized investment gains, net
|
121
|
249
|
||||||
Unrealized gains (losses) on equity securities, net
|
744
|
(8,455
|
)
|
|||||
Other income
|
7
|
27
|
||||||
Total revenue
|
49,075
|
39,410
|
||||||
Insurance benefits and losses incurred
|
33,272
|
33,583
|
||||||
Commissions and underwriting expenses
|
12,564
|
12,626
|
||||||
Interest expense
|
346
|
476
|
||||||
Other expense
|
3,440
|
2,952
|
||||||
Total benefits and expenses
|
49,622
|
49,637
|
||||||
Loss before income taxes
|
$
|
(547
|
)
|
$
|
(10,227
|
)
|
||
Net Loss
|
$
|
(431
|
)
|
$
|
(8,087
|
)
|
Three Months Ended
March 31,
|
||||||||
Reconciliation of Non-GAAP Financial Measure
|
2021
|
2020
|
||||||
(In thousands)
|
||||||||
Net loss
|
$
|
(431
|
)
|
$
|
(8,087
|
)
|
||
Income tax benefit
|
(116
|
)
|
(2,140
|
)
|
||||
Realized investment gains, net
|
(121
|
)
|
(249
|
)
|
||||
Unrealized (gains) losses on equity securities, net
|
(744
|
)
|
8,455
|
|||||
Non-GAAP operating loss
|
$
|
(1,412
|
)
|
$
|
(2,021
|
)
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
(Dollars in thousands)
|
||||||||
Gross written premiums
|
$
|
11,462
|
$
|
9,618
|
||||
Ceded premiums
|
(1,684
|
)
|
(1,394
|
)
|
||||
Net written premiums
|
$
|
9,778
|
$
|
8,224
|
||||
Net earned premiums
|
$
|
16,615
|
$
|
14,922
|
||||
Insurance benefits and losses incurred
|
11,749
|
9,534
|
||||||
Commissions and underwriting expenses
|
4,286
|
4,814
|
||||||
Underwriting income
|
$
|
580
|
$
|
574
|
||||
Loss ratio
|
70.7
|
%
|
63.9
|
%
|
||||
Expense ratio
|
25.8
|
32.3
|
||||||
Combined ratio
|
96.5
|
%
|
96.2
|
%
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
(In thousands)
|
||||||||
Automobile liability
|
$
|
7,737
|
$
|
7,140
|
||||
Automobile physical damage
|
5,534
|
4,548
|
||||||
General liability
|
1,253
|
851
|
||||||
Surety
|
1,317
|
1,605
|
||||||
Other lines
|
774
|
778
|
||||||
Total
|
$
|
16,615
|
$
|
14,922
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
(Dollars in thousands)
|
||||||||
Medicare supplement
|
$
|
40,992
|
$
|
44,315
|
||||
Other health products
|
2,387
|
2,184
|
||||||
Life insurance
|
2,887
|
2,257
|
||||||
Gross earned premiums
|
46,266
|
48,756
|
||||||
Ceded premiums
|
(16,791
|
)
|
(18,128
|
)
|
||||
Net earned premiums
|
29,475
|
30,628
|
||||||
Insurance benefits and losses incurred
|
21,523
|
24,049
|
||||||
Commissions and underwriting expenses
|
9,885
|
9,604
|
||||||
Total expenses
|
31,408
|
33,653
|
||||||
Underwriting loss
|
$
|
(1,933
|
)
|
$
|
(3,025
|
)
|
||
Loss ratio
|
73.0
|
%
|
78.5
|
%
|
||||
Expense ratio
|
33.5
|
31.4
|
||||||
Combined ratio
|
106.5
|
%
|
109.9
|
%
|
Period
|
Total Number
of Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased
as Part of
Publicly
Announced Plans
or Programs
|
Maximum Number
of Shares that
May Yet be
Purchased
Under the Plans
or Programs
|
||||||||||||
January 1 – January 31, 2021
|
—
|
$
|
—
|
—
|
325,129
|
|||||||||||
February 1 – February 28, 2021
|
—
|
—
|
—
|
325,129
|
||||||||||||
March 1 –March 31, 2021
|
—
|
—
|
—
|
325,129
|
||||||||||||
Total
|
—
|
$
|
—
|
—
|
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101. INS
|
XBRL Instance Document.
|
101. SCH
|
XBRL Taxonomy Extension Schema.
|
101. CAL
|
XBRL Taxonomy Extension Calculation Linkbase.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase.
|
ATLANTIC AMERICAN CORPORATION
|
|||
(Registrant)
|
|||
Date: May 11, 2021
|
By:
|
/s/ J. Ross Franklin
|
|
J. Ross Franklin
|
|||
Vice President and Chief Financial Officer
|
|||
(Principal Financial and Accounting Officer)
|
1. |
I have reviewed this report on Form 10-Q of Atlantic American Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the
audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 11, 2021
|
/s/ Hilton H. Howell, Jr.
|
|
Hilton H. Howell, Jr.
|
||
President and Chief Executive Officer
|
1. |
I have reviewed this report on Form 10-Q of Atlantic American Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors
(or persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 11, 2021
|
/s/ J. Ross Franklin
|
|
J. Ross Franklin
|
||
Vice President and Chief Financial Officer
|
(1) |
The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
Date: May 11, 2021
|
/s/ Hilton H. Howell, Jr.
|
|
Hilton H. Howell, Jr.
|
||
President and Chief Executive Officer
|
||
Date: May 11, 2021
|
/s/ J. Ross Franklin
|
|
J. Ross Franklin
|
||
Vice President and Chief Financial Officer
|
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Apr. 30, 2021 |
|
Cover page. | ||
Entity Registrant Name | ATLANTIC AMERICAN CORP | |
Entity Central Index Key | 0000008177 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Address, State or Province | GA | |
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 | 20,415,782 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Investments: | ||
Fixed maturities, cost | $ 229,024 | $ 222,461 |
Equity securities, cost | 4,833 | 6,393 |
Other invested assets, cost | 3,765 | 3,765 |
Receivables: | ||
Insurance premiums and other, allowance for doubtful accounts | $ 185 | $ 198 |
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) | 20,415,782 | 20,415,243 |
Treasury stock, at cost (in shares) | 1,985,112 | 1,985,651 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Revenue: | ||
Insurance premiums, net | $ 46,090 | $ 45,550 |
Net investment income | 2,113 | 2,039 |
Realized investment gains, net | 121 | 249 |
Unrealized gains (losses) on equity securities, net | 744 | (8,455) |
Other income | 7 | 27 |
Total revenue | 49,075 | 39,410 |
Benefits and expenses: | ||
Insurance benefits and losses incurred | 33,272 | 33,583 |
Commissions and underwriting expenses | 12,564 | 12,626 |
Interest expense | 346 | 476 |
Other expense | 3,440 | 2,952 |
Total benefits and expenses | 49,622 | 49,637 |
Loss before income taxes | (547) | (10,227) |
Income tax benefit | (116) | (2,140) |
Net loss | (431) | (8,087) |
Preferred stock dividends | (99) | (99) |
Net loss applicable to common shareholders | $ (530) | $ (8,186) |
Loss per common share (basic and diluted) (in dollars per share) | $ (0.03) | $ (0.40) |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Net loss | $ (431) | $ (8,087) |
Available-for-sale fixed maturity securities: | ||
Gross unrealized holding loss arising in the period | (13,747) | (10,880) |
Related income tax effect | 2,887 | 2,285 |
Subtotal | (10,860) | (8,595) |
Less: reclassification adjustment for net realized gains included in net loss | (121) | (249) |
Related income tax effect | 25 | 52 |
Subtotal | (96) | (197) |
Total other comprehensive loss, net of tax | (10,956) | (8,792) |
Total comprehensive loss | $ (11,387) | $ (16,879) |
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Shares issued under stock plans (in shares) | 539 | 1,204 |
Basis of Presentation |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2021 | |||
Basis of Presentation [Abstract] | |||
Basis of Presentation |
The accompanying unaudited condensed consolidated financial statements include the accounts of Atlantic American Corporation (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”). The Parent’s primary operating subsidiaries, American Southern Insurance Company and American Safety Insurance Company (together known as “American Southern”) and Bankers Fidelity Life Insurance Company and Bankers Fidelity Assurance Company (together known as “Bankers Fidelity”), operate in two principal business units. American Southern operates in the property and casualty insurance market, while Bankers Fidelity operates in the life and health insurance market. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The unaudited condensed consolidated financial statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 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, 2021 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, 2021 or for any other future period. The Company’s significant accounting policies have not changed materially from those set out in the 2020 Annual Report, except as noted below for the adoption of new accounting standards. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. On March 11, 2020, the World Health Organization declared the Novel Coronavirus (“COVID-19”) outbreak a global pandemic. The impact of COVID-19 and related actions to attempt to control its spread began to impact the Company’s business operations in March 2020, and we expect that the pandemic, actions that have been or will be taken in response to it and its overall impact on the economy, will continue to have an effect on our business operations and our operating results. The Company’s insurance subsidiaries may experience difficulties collecting premiums from some policyholders, and policyholders with financial difficulties may decide not to renew insurance policies with the Company. Although the ultimate impact cannot be predicted with certainty at this time, the Company’s insurance subsidiaries do not expect a direct material impact from the outbreak of COVID-19 in terms of increased claims and losses, but that may change as more information becomes available. In addition, economic uncertainty related to COVID-19 has led to, and may continue to create, increased volatility in the investment markets. The impact of COVID-19 on the economy and on the Company continues to evolve and its future effects are uncertain. The Company continues to monitor the effects and risks of COVID-19 to assess its impact on the Company’s business, financial condition, results of operations, liquidity and capital position. |
Recently Issued Accounting Standards |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2021 | |||
Recently Issued Accounting Standards [Abstract] | |||
Recently Issued Accounting Standards |
Adoption of New Accounting Standards Income Taxes – Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). This updated guidance is intended to simplify the accounting for income taxes by removing several exceptions contained in existing guidance and amending other existing guidance to simplify several other income tax accounting matters. The updated guidance is effective for interim and annual reporting periods beginning after December 15, 2020, although earlier adoption is permitted. The Company adopted ASU 2019-12 as of January 1, 2021. The adoption of this ASU did not have an impact on the Company’s consolidated financial statements. 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 2020 Annual Report. |
Investments |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments |
The following tables set forth the estimated fair value, gross unrealized gains, gross unrealized losses and cost or amortized cost of the Company’s investments in fixed maturities and equity securities, aggregated by type and industry, as of March 31, 2021 and December 31, 2020. Fixed maturities were comprised of the following:
Bonds having an amortized cost of $10,444 and $10,670 and included in the tables above were on deposit with insurance regulatory authorities as of March 31, 2021 and December 31, 2020, respectively, in accordance with statutory requirements. Additionally, bonds having an amortized cost of $6,391 and $1,997 and included in the tables above were pledged as collateral to FHLB at March 31, 2021 and December 31, 2020, respectively. Equity securities were comprised of the following:
The carrying value and amortized cost of the Company’s investments in fixed maturities at March 31, 2021 and December 31, 2020 by contractual maturity were as follows. Actual maturities may differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.
The following tables present the Company’s unrealized loss aging for securities by type and length of time the security was in a continuous unrealized loss position as of March 31, 2021 and December 31, 2020.
The evaluation for an other than temporary impairment (“OTTI”) is a quantitative and qualitative process, which is subject to risks and uncertainties in the determination of whether declines in the fair value of investments are other than temporary. Potential risks and uncertainties include, among other things, changes in general economic conditions, an issuer’s financial condition or near term recovery prospects and the effects of changes in interest rates. In evaluating a potential impairment, the Company considers, among other factors, management’s intent and ability to hold the securities until price recovery, the nature of the investment and the expectation of prospects for the issuer and its industry, the status of an issuer’s continued satisfaction of its obligations in accordance with their contractual terms, and management’s expectation as to the issuer’s ability and intent to continue to do so, as well as ratings actions that may affect the issuer’s credit status. There were no OTTI charges recorded during the three month periods ended March 31, 2021 and 2020. As of March 31, 2021 and December 31, 2020, there were thirty-seven and twenty securities, respectively, in an unrealized loss position which primarily included certain of the Company’s investments in fixed maturities within the utilities and telecom, financial services, other diversified business and other diversified consumer sectors. The increase in the number of securities in an unrealized loss position during the three month period ended March 31, 2021, was primarily attributable to a decline in market values in certain of the Company’s fixed maturity securities as a result of a rising interest rate environment. The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position. Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, including those described above, the Company has deemed these securities to be temporarily impaired as of March 31, 2021. The following table is a summary of realized investment gains for the three month period ended March 31, 2021 and 2020.
The following table presents the portion of unrealized gains (losses) related to equity securities still held for the three month period ended March 31, 2021 and 2020.
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 $3,183 and $3,238 as of March 31, 2021 and December 31, 2020, respectively. The Company’s VIE interests, carried as a part of investment in unconsolidated trusts, totaled $1,238 as of March 31, 2021 and December 31, 2020. 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 $4,421 and $4,476, as of March 31, 2021 and December 31, 2020, respectively. As of March 31, 2021 and December 31, 2020, the Company had outstanding commitments totaling $1,997, whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses. |
Fair Values of Financial Instruments |
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Fair Values of Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Financial Instruments |
The estimated fair values have been determined by the Company using available market information from various market sources and appropriate valuation methodologies as of the respective dates. However, considerable judgment is necessary to interpret market data and to develop the estimates of fair value. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, the estimates presented herein are not necessarily indicative of the amounts which the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The following describes the fair value hierarchy and provides information as to the extent to which the Company uses fair value to measure the value of its financial instruments and information about the inputs used to value those financial instruments. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three broad levels.
As of March 31, 2021, financial instruments carried at fair value were measured on a recurring basis as summarized below:
As of December 31, 2020, financial instruments carried at fair value were measured on a recurring basis as summarized below:
The following table sets forth the carrying amount, estimated fair value and level within the fair value hierarchy of the Company’s financial instruments as of March 31, 2021 and December 31, 2020.
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Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses |
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Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses |
The roll-forward of liabilities for unpaid losses, claims and loss adjustment expenses for the three months ended March 31, 2021 and 2020 is as follows:
Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred:
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Junior Subordinated Debentures |
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Junior Subordinated Debentures |
The Company has two unconsolidated Connecticut statutory business trusts, which exist for the exclusive purposes of: (i) issuing trust preferred securities (“Trust Preferred Securities”) representing undivided beneficial interests in the assets of the trusts; (ii) investing the gross proceeds of the Trust Preferred Securities in junior subordinated deferrable interest debentures (“Junior Subordinated Debentures”) of Atlantic American; and (iii) engaging in those activities necessary or incidental thereto. The financial structure of each of Atlantic American Statutory Trust I and II as of March 31, 2021 was as follows:
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Loss Per Common Share |
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Earnings (Loss) Per Common Share |
A reconciliation of the numerator and denominator used in the loss per common share calculations is as follows:
The assumed conversion of the Company’s Series D preferred stock was excluded from the loss per common share calculation for all periods presented since its impact would have been antidilutive. |
Income Taxes |
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Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
The components of income tax benefit were:
In addition, the Company determined there were no significant tax implications as a result of the CARES Act. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases |
The Company has two operating lease agreements, each for the use of office space in the ordinary course of business. The first lease renews annually on an automatic basis and based on original assumptions, management is reasonably certain to exercise the renewal option through 2026. The original term of the second lease was ten years and amended in January 2017 to provide for an additional seven years, with a termination date on September 30, 2026. The rate used in determining the present value of lease payments is based upon an estimate of the Company’s incremental secured borrowing rate commensurate with the term of the underlying lease. These leases are accounted for as operating leases, whereby lease expense is recognized on a straight-line basis over the term of the lease. Lease expense reported for the three months ended March 31, 2021 and March 31, 2020 was $254. Additional information regarding the Company’s real estate operating leases is as follows:
The following table presents maturities and present value of the Company’s lease liabilities:
As of March 31, 2021, the Company has no operating leases that have not yet commenced. |
Commitments and Contingencies |
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Commitments and Contingencies [Abstract] | |||
Commitments and Contingencies |
From time to time, the Company is, and expects to continue to be, involved in various claims and lawsuits incidental to and in the ordinary course of its businesses. In the opinion of management, any such known claims are not expected to have a material effect on the financial condition or results of operations of the Company. |
Segment Information |
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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 loss before income taxes for each business unit as of and for the periods ended 2021 and 2020.
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Recently Issued Accounting Standards (Policies) |
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Recently Issued Accounting Standards [Abstract] | |
Adoption of New Accounting Standards | Adoption of New Accounting Standards Income Taxes – Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). This updated guidance is intended to simplify the accounting for income taxes by removing several exceptions contained in existing guidance and amending other existing guidance to simplify several other income tax accounting matters. The updated guidance is effective for interim and annual reporting periods beginning after December 15, 2020, although earlier adoption is permitted. The Company adopted ASU 2019-12 as of January 1, 2021. The adoption of this ASU did not have an impact on the Company’s consolidated financial statements. 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 2020 Annual Report. |
Investments (Tables) |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Aggregated by Type and Industry | Fixed maturities were comprised of the following:
Bonds having an amortized cost of $10,444 and $10,670 and included in the tables above were on deposit with insurance regulatory authorities as of March 31, 2021 and December 31, 2020, respectively, in accordance with statutory requirements. Additionally, bonds having an amortized cost of $6,391 and $1,997 and included in the tables above were pledged as collateral to FHLB at March 31, 2021 and December 31, 2020, respectively. Equity securities were comprised of the following:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost and Carrying Value of Fixed Maturities by Contractual Maturity | The carrying value and amortized cost of the Company’s investments in fixed maturities at March 31, 2021 and December 31, 2020 by contractual maturity were as follows. Actual maturities may differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities with Continuous Unrealized Loss Position | The following tables present the Company’s unrealized loss aging for securities by type and length of time the security was in a continuous unrealized loss position as of March 31, 2021 and December 31, 2020.
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Summary of Realized Investment Gains | The following table is a summary of realized investment gains for the three month period ended March 31, 2021 and 2020.
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized Gains (Losses) on Equity Securities | The following table presents the portion of unrealized gains (losses) related to equity securities still held for the three month period ended March 31, 2021 and 2020.
|
Fair Values of Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments Carried at Fair Value Measured on a Recurring Basis | As of March 31, 2021, financial instruments carried at fair value were measured on a recurring basis as summarized below:
As of December 31, 2020, financial instruments carried at fair value were measured on a recurring basis as summarized below:
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Carrying Amount, Estimated Fair Value and Level within the Fair Value Hierarchy of Financial Instruments | The following table sets forth the carrying amount, estimated fair value and level within the fair value hierarchy of the Company’s financial instruments as of March 31, 2021 and December 31, 2020.
|
Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Roll-forward of Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses | The roll-forward of liabilities for unpaid losses, claims and loss adjustment expenses for the three months ended March 31, 2021 and 2020 is as follows:
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Reconciliation of Total Incurred Losses to Total Insurance Benefits and Losses | Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred:
|
Junior Subordinated Debentures (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Junior Subordinated Debentures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Structure of Statutory Business Trusts | The financial structure of each of Atlantic American Statutory Trust I and II as of March 31, 2021 was as follows:
|
Loss Per Common Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Common Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Numerator and Denominator used in Earnings (Loss) per Common Share Calculations | A reconciliation of the numerator and denominator used in the loss per common share calculations is as follows:
|
Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Income Tax Expense (Benefit) | A reconciliation of the differences between income taxes computed at the federal statutory income tax rate and income tax benefit is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income Tax Expense | The components of income tax benefit were:
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Information of Operating Leases | Additional information regarding the Company’s real estate operating leases is as follows:
|
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Maturities and Present Value of Lease Liabilities | The following table presents maturities and present value of the Company’s lease liabilities:
|
Segment Information (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets, Revenue Loss Before Income Taxes for Each Business Unit | The following sets forth the assets, revenue and loss before income taxes for each business unit as of and for the periods ended 2021 and 2020.
|
Basis of Presentation (Details) |
3 Months Ended |
---|---|
Mar. 31, 2021
Segment
| |
Basis of Presentation [Abstract] | |
Number of business units | 2 |
Investments, Fixed Maturities by Contractual Maturities (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Carrying Value [Abstract] | ||
Due in one year or less | $ 3,031 | $ 2,041 |
Due after one year through five years | 16,633 | 18,373 |
Due after five years through ten years | 86,651 | 89,892 |
Due after ten years | 116,883 | 124,609 |
Asset backed securities | 23,603 | 19,191 |
Carrying value total | 246,801 | 254,106 |
Amortized Cost [Abstract] | ||
Due in one year or less | 3,001 | 2,015 |
Due after one year through five years | 15,539 | 17,039 |
Due after five years through ten years | 80,529 | 79,993 |
Due after ten years | 106,365 | 104,527 |
Asset backed securities | 23,590 | 18,887 |
Amortized cost total | $ 229,024 | $ 222,461 |
Investments, Summary of Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Summary of realized investment gains (losses) [Abstract] | ||
Gains | $ 121 | $ 249 |
Losses | 0 | 0 |
Realized investment gains, net | 121 | 249 |
Fixed Maturities [Member] | ||
Summary of realized investment gains (losses) [Abstract] | ||
Gains | 121 | 249 |
Losses | 0 | 0 |
Realized investment gains, net | 121 | 249 |
Equity Securities [Member] | ||
Summary of realized investment gains (losses) [Abstract] | ||
Gains | 0 | 0 |
Losses | 0 | 0 |
Realized investment gains, net | 0 | 0 |
Other Invested Assets [Member] | ||
Summary of realized investment gains (losses) [Abstract] | ||
Gains | 0 | 0 |
Losses | 0 | 0 |
Realized investment gains, net | $ 0 | $ 0 |
Investments, Unrealized Gains (Losses) on Equity Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Investments [Abstract] | ||
Net realized and unrealized gains (losses) recognized during the period on equity securities | $ 744 | $ (8,455) |
Less: Net realized gains (losses) recognized during the period on equity securities sold during the period | 0 | 0 |
Unrealized gains (losses) on equity securities | $ 744 | $ (8,455) |
Investments, Variable Interest Entities (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Variable Interest Entities [Abstract] | ||
Carrying amount of interest | $ 3,183 | $ 3,238 |
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 | 3,183 | 3,238 |
Investment in unconsolidated trusts | 1,238 | 1,238 |
Maximum loss exposure | 4,421 | 4,476 |
Outstanding commitments | $ 1,997 | $ 1,997 |
Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands |
3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|||||||||
Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses [Roll Forward] | ||||||||||
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross | $ 79,147 | $ 81,448 | ||||||||
Less: Reinsurance recoverable on unpaid losses | (17,600) | (18,339) | ||||||||
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net | 61,547 | 63,109 | ||||||||
Incurred related to [Abstract] | ||||||||||
Current accident year | 32,928 | 35,985 | ||||||||
Prior accident year development | [1] | 475 | [2] | (2,583) | [3] | |||||
Total incurred | 33,403 | 33,402 | ||||||||
Paid related to [Abstract] | ||||||||||
Current accident year | 10,917 | 14,008 | ||||||||
Prior accident years | 20,984 | 20,856 | ||||||||
Total paid | 31,901 | 34,864 | ||||||||
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net | 63,049 | 61,647 | ||||||||
Plus: Reinsurance recoverable on unpaid losses | 18,236 | 18,548 | ||||||||
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross | 81,285 | 80,195 | ||||||||
Reconciliation of total incurred claims to total insurance benefits and losses incurred [Abstract] | ||||||||||
Total incurred losses | 33,403 | 33,402 | ||||||||
Cash surrender value and matured endowments | 247 | 368 | ||||||||
Benefit reserve changes | (378) | (187) | ||||||||
Total insurance benefits and losses incurred | $ 33,272 | $ 33,583 | ||||||||
|
Junior Subordinated Debentures (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021
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, 2021 | $ 33,738 | |||||||||
Net balance December 31, 2020 | $ 33,738 | |||||||||
Junior Subordinated Debentures [Member] | ||||||||||
Financial structure of statutory business trusts [Abstract] | ||||||||||
Number of consecutive quarters for which interest payments can be deferred | Quarter | 20 | |||||||||
Atlantic American Statutory Trust I [Member] | Junior Subordinated Debentures [Member] | ||||||||||
Financial structure of statutory business trusts [Abstract] | ||||||||||
Principal amount owed March 31, 2021 | $ 18,042 | [1],[2] | ||||||||
Less: Treasury debt | 0 | [1],[2],[3] | ||||||||
Net balance March 31, 2021 | 18,042 | [1],[2] | ||||||||
Net balance December 31, 2020 | $ 18,042 | [1],[2] | ||||||||
Coupon rate | LIBOR + 4.00% | [1],[2] | ||||||||
Interest payable | Quarterly | [1],[2] | ||||||||
Maturity date | Dec. 04, 2032 | [1],[2] | ||||||||
Redeemable by issuer | Yes | [1],[2] | ||||||||
Atlantic American Statutory Trust I [Member] | Junior Subordinated Debentures [Member] | LIBOR [Member] | ||||||||||
Financial structure of statutory business trusts [Abstract] | ||||||||||
Basis spread on variable rate | 4.00% | |||||||||
Atlantic American Statutory Trust I [Member] | Trust Preferred Securities [Member] | ||||||||||
Financial structure of statutory business trusts [Abstract] | ||||||||||
Coupon rate | LIBOR + 4.00% | |||||||||
Issuance date | Dec. 04, 2002 | |||||||||
Securities issued (in shares) | shares | 17,500 | |||||||||
Liquidation preference per security (in dollars per share) | $ / shares | $ 1 | |||||||||
Liquidation value | $ 17,500 | |||||||||
Distribution payable | Quarterly | |||||||||
Distribution guaranteed by | Atlantic American Corporation | [4] | ||||||||
Atlantic American Statutory Trust I [Member] | Trust Preferred Securities [Member] | LIBOR [Member] | ||||||||||
Financial structure of statutory business trusts [Abstract] | ||||||||||
Basis spread on variable rate | 4.00% | |||||||||
Atlantic American Statutory Trust II [Member] | Junior Subordinated Debentures [Member] | ||||||||||
Financial structure of statutory business trusts [Abstract] | ||||||||||
Principal amount owed March 31, 2021 | $ 23,196 | [1],[2] | ||||||||
Less: Treasury debt | (7,500) | [1],[2],[3] | ||||||||
Net balance March 31, 2021 | 15,696 | [1],[2] | ||||||||
Net balance December 31, 2020 | $ 15,696 | [1],[2] | ||||||||
Coupon rate | LIBOR + 4.10% | [1],[2] | ||||||||
Interest payable | Quarterly | [1],[2] | ||||||||
Maturity date | May 15, 2033 | [1],[2] | ||||||||
Redeemable by issuer | Yes | [1],[2] | ||||||||
Atlantic American Statutory Trust II [Member] | Junior Subordinated Debentures [Member] | LIBOR [Member] | ||||||||||
Financial structure of statutory business trusts [Abstract] | ||||||||||
Basis spread on variable rate | 4.10% | |||||||||
Atlantic American Statutory Trust II [Member] | Trust Preferred Securities [Member] | ||||||||||
Financial structure of statutory business trusts [Abstract] | ||||||||||
Coupon rate | LIBOR + 4.10% | |||||||||
Issuance date | May 15, 2003 | |||||||||
Securities issued (in shares) | shares | 22,500 | |||||||||
Liquidation preference per security (in dollars per share) | $ / shares | $ 1 | |||||||||
Liquidation value | $ 22,500 | |||||||||
Distribution payable | Quarterly | |||||||||
Distribution guaranteed by | Atlantic American Corporation | [4] | ||||||||
Atlantic American Statutory Trust II [Member] | Trust Preferred Securities [Member] | LIBOR [Member] | ||||||||||
Financial structure of statutory business trusts [Abstract] | ||||||||||
Basis spread on variable rate | 4.10% | |||||||||
|
Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Income (Loss) [Abstract] | ||
Net loss | $ (431) | $ (8,087) |
Less: preferred stock dividends | (99) | (99) |
Net loss applicable to common shareholders | $ (530) | $ (8,186) |
Weighted Average Shares [Abstract] | ||
Weighted average shares outstanding (in shares) | 20,415 | 20,470 |
Per Share Amount [Abstract] | ||
Loss per common share | $ (0.03) | $ (0.40) |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Reconciliation of income tax expense (benefit) [Abstract] | ||
Federal income tax provision at statutory rate of 21% | $ (115) | $ (2,148) |
Dividends-received deduction | (9) | (3) |
Other permanent differences | 8 | 11 |
Income tax expense (benefit) | $ (116) | (2,140) |
Federal statutory income tax rate | 21.00% | |
Components of income tax expense [Abstract] | ||
Current - Federal | $ 376 | 129 |
Deferred - Federal | (492) | (2,269) |
Income tax expense (benefit) | $ (116) | $ (2,140) |
Leases (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021
USD ($)
Lease
|
Mar. 31, 2020
USD ($)
|
|
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 | 251 | 978 |
Right-of-use assets included in other assets on the consolidated balance sheet | $ 4,664 | $ 5,319 |
Weighted average discount rate | 6.80% | 6.80% |
Weighted average remaining lease term in years | 5 years 7 months 6 days | 6 years 7 months 6 days |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets | |
Maturities and present value of lease liabilities [Abstract] | ||
Remainder of 2021 | $ 764 | |
2022 | 1,031 | |
2023 | 1,048 | |
2024 | 1,065 | |
2025 | 1,083 | |
Thereafter | 942 | |
Total undiscounted lease payments | 5,933 | |
Less: present value adjustment | 1,031 | |
Operating lease liability included in accounts payable and accrued expenses on the condensed consolidated balance sheet | $ 4,902 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accounts Payable and Accrued Liabilities | |
Second Lease [Member] | ||
Lease description [Abstract] | ||
Lease term | 10 years | |
Renewal option period | 7 years |
Segment Information (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2021
USD ($)
Segment
|
Mar. 31, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
|
|
Segment Information [Abstract] | |||
Number of business units | Segment | 2 | ||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | $ 383,127 | $ 405,187 | |
Revenues | 49,075 | $ 39,410 | |
Loss before income taxes | (547) | (10,227) | |
Operating Segments [Member] | American Southern [Member] | |||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | 145,081 | 158,808 | |
Revenues | 17,526 | 15,227 | |
Loss before income taxes | 1,490 | 878 | |
Operating Segments [Member] | Bankers Fidelity [Member] | |||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | 224,844 | 236,197 | |
Revenues | 31,540 | 24,873 | |
Loss before income taxes | 134 | (8,781) | |
Corporate and Other [Member] | |||
Assets, Revenue and Income (loss) before income taxes for each business unit [Abstract] | |||
Assets | 13,202 | $ 10,182 | |
Revenues | 9 | (690) | |
Loss before income taxes | $ (2,171) | $ (2,324) |
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