UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported)
June 30, 2023

ATLANTIC AMERICAN CORPORATION
(Exact name of registrant as specified in its charter)

Georgia
0-3722
58-1027114
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

4370 Peachtree Road, N.E., Atlanta, Georgia
  
30319
(Address of principal executive offices)
  
(Zip Code)

Registrant’s telephone number, including area code
(404) 266-5500

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
  
Trading
Symbol(s)
  
Name of each exchange on which registered
Common Stock, par value $1.00 per share
  
AAME
  
The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.
Results of Operations and Financial Condition

On June 30, 2023, Atlantic American Corporation (the “Registrant”) reported its results of operations for its fourth quarter and year ended December 31, 2022 and its results of operations for its first quarter ended March 31, 2023. A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01.
Financial Statements and Exhibits

(d) Exhibits

Exhibit
Number
  
Description of Exhibit
 
Press release dated June 30, 2023.
104
  
Cover Page Interactive Data File (embedded within the Inline XBRL document).

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933.

2
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 
ATLANTIC AMERICAN CORPORATION
     
 
By:
/s/ J. Ross Franklin
   
J. Ross Franklin
   
Vice President, Chief Financial Officer and Secretary
     
Date:  June 30, 2023    


Exhibit 99.1

ATLANTIC AMERICAN CORPORATION REPORTS FOURTH QUARTER AND YEAR-END RESULTS FOR 2022, FIRST QUARTER RESULTS FOR 2023

REPORTS BRING THE COMPANY CURRENT WITH ALL FILINGS

ATLANTA, Georgia, June 30, 2023 - Atlantic American Corporation (Nasdaq: AAME) announced today that the Company has filed its Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”) and its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 (the “Form 10-Q”).

As previously announced, the Company was unable to file its Form 10-K and Form 10-Q within the prescribed time periods because the Company required additional time to finalize its actuarial valuation procedures and related financial statement balances within the Company’s life and health segment, Bankers Fidelity.  The need for additional time resulted from a change in the systems used to perform the actuarial valuations.  Effective today, the Company is up-to-date on its filing of periodic financial reports with the Securities and Exchange Commission.

Quarter and Year Ended December 31, 2022
The Company reported net income for the three month period ended December 31, 2022 of $1.0 million, or $0.05 per diluted share, as compared to net income of $2.7 million, or $0.12 per diluted share, for the comparable period in 2021.  For the year ended December 31, 2022, the Company reported net income of $1.5 million, or $0.06 per diluted share, as compared to net income of $4.3 million, or $0.19 per diluted share for the comparable period in 2021.  The decrease in net income during the fourth quarter of 2022 was primarily due to a $4.4 million decrease in realized gains, partially offset by a $2.5 million decrease in insurance benefits and losses incurred within the Company’s life and health operations.  The decrease in net income for the year ended December 31, 2022 was primarily due to a $9.5 million decrease in unrealized gains on equity securities coupled with a $4.9 million decrease in realized gains, partially offset by an $11.0 million decrease in benefits and losses incurred within the Company’s life and health operations.  As a percentage of premium, losses incurred within the Medicare supplement line of business decreased for the three month period and year ended December 31, 2022, primarily as a result of improved rate adequacy.

Operating income (Non-GAAP, as defined below) increased to $3.5 million in the three month period ended December 31, 2022 as compared to $2.6 million for the three month period ended December 31, 2021.  For the year ended December 31, 2022, the Company reported operating income of $9.6 million compared to operating loss of $1.5 million for the comparable period in 2021.  The increase in operating income for the three and twelve month periods was primarily due to a decrease in insurance benefits and losses in the Company’s life and health operations, as mentioned above, predominantly within the Medicare supplement line of business.

Quarter Ended March 31, 2023
The Company reported net loss of $1.4 million, or $0.08 per common share, in the first quarter of 2023 compared to net income of $2.8 million, or $0.13 per common share, in the first quarter of 2022.  The decrease in net income for the first quarter of 2023 is primarily the result of a $4.6 million decrease in unrealized gains on equity securities due to fluctuations in market values.

Operating income decreased to $0.6 million in the three month period ended March 31, 2023 compared to $1.6 million in the three month period ended March 31, 2022.  The decrease in operating income was primarily due to unfavorable loss experience in the property and casualty operations due to an increase in the frequency and severity of claims within the automobile liability line of business.

Commenting on the results, Hilton H. Howell, Jr., Chairman, President and Chief Executive Officer, stated, “We are absolutely delighted to finally release our fourth quarter 2022 and first quarter 2023 results.  It is unfortunate that the process of converting our valuation systems resulted in delays in filing our financial reports, but we are very pleased to report that this was one of our best years ever with $9.6 million in operating income for the Company during 2022.  Each of our life, health, and property and casualty segments is performing quite well and we look forward to the balance of 2023 with optimism.”

Atlantic American Corporation is an insurance holding company involved through its subsidiary companies in specialty markets of the life, health, and property and casualty insurance industries.  Its principal insurance subsidiaries are American Southern Insurance Company, American Safety Insurance Company, Bankers Fidelity Life Insurance Company, Bankers Fidelity Assurance Company and Atlantic Capital Life Assurance Company.

Note regarding non-GAAP financial measure: Atlantic American Corporation presents its consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP).  However, from time to time, the Company may present, in its public statements, press releases and filings with the Securities and Exchange Commission, non-GAAP financial measures such as operating income (loss). We define operating income (loss) as net income (loss) excluding: (i) income tax expense (benefit); (ii) realized investment gains, net; and (iii) unrealized (gains) losses on equity securities, net.  Management believes operating income (loss) is a useful metric for investors, potential investors, securities analysts and others because it isolates the “core” operating results of the Company before considering certain items that are either beyond the control of management (such as income tax expense (benefit), which is subject to timing, regulatory and rate changes depending on the timing of the associated revenues and expenses) or are not expected to regularly impact the Company’s operating results (such as any realized and unrealized investment gains (losses), which are not a part of the Company’s primary operations and are, to a limited extent, subject to discretion in terms of timing of realization).  The financial data attached includes a reconciliation of operating income (loss) to net income (loss), the most comparable GAAP financial measure.  The Company’s definition of operating income (loss) may differ from similarly titled financial measures used by others.  This non-GAAP financial measure should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.

Note regarding Private Securities Litigation Reform Act: Except for historical information contained herein, this press release contains forward-looking statements that involve a number of risks and uncertainties.  Actual results could differ materially from those indicated by such forward-looking statements due to a number of factors and risks, including the Company’s ability to remediate the identified material weakness in its internal control over financial reporting and those other risks and uncertainties detailed in statements and reports that Atlantic American Corporation files from time to time with the Securities and Exchange Commission.

For further information contact:
  
J. Ross Franklin
Hilton H. Howell, Jr.
Chief Financial Officer
Chairman, President & CEO
Atlantic American Corporation
Atlantic American Corporation
404-266-5580
404-266-5505

Atlantic American Corporation
Financial Data

   
Three Months Ended
December 31,
    
Twelve Months Ended
December 31,
  
(Unaudited; In thousands, except per share data)
  
2022
    
2021
    
2022
    
2021
  
Insurance premiums
                        
Life and health
  
$
28,391
    
$
29,216
    
$
115,164
    
$
116,234
  
Property and casualty
    
16,523
      
17,685
      
70,276
      
67,982
  
Insurance premiums, net
    
44,914
      
46,901
      
185,440
      
184,216
  
                                 
Net investment income
    
2,422
      
2,012
      
9,932
      
8,528
  
Realized investment gains, net
    
1
      
4,383
      
30
      
4,903
  
Unrealized gains (losses) on equity securities, net
    
(2,106
)
    
(3,564
)
    
(7,562
)
    
1,894
  
Other income
    
-
      
-
      
11
      
13
  
                                 
Total revenue
    
45,231
      
49,732
      
187,851
      
199,554
  
                                 
Insurance benefits and losses incurred
                                
Life and health
    
18,278
      
20,798
      
76,281
      
87,261
  
Property and casualty
    
10,626
      
10,876
      
47,175
      
44,433
  
Commissions and underwriting expenses
    
10,819
      
10,826
      
46,713
      
47,496
  
Interest expense
    
661
      
347
      
1,952
      
1,387
  
Other expense
    
3,483
      
3,497
      
13,634
      
13,675
  
                                 
Total benefits and expenses
    
43,867
      
46,344
      
185,755
      
194,252
  
                                 
Income before income taxes
    
1,364
      
3,388
      
2,096
      
5,302
  
Income tax expense
    
318
      
723
      
571
      
1,021
  
                                 
Net income
  
$
1,046
    
$
2,665
    
$
1,525
    
$
4,281
  
                                 
Earnings per common share (basic)
  
$
0.05
    
$
0.13
    
$
0.06
    
$
0.19
  
Earnings per common share (diluted)
  
$
0.05
    
$
0.12
    
$
0.06
    
$
0.19
  
                                 
Reconciliation of Non-GAAP financial measure
                                
                                 
Net income
  
$
1,046
    
$
2,665
    
$
1,525
    
$
4,281
  
Income tax expense
    
318
      
723
      
571
      
1,021
  
Realized investment gains, net
    
(1
)
    
(4,383
)
    
(30
)
    
(4,903
)
Unrealized (gains) losses on equity securities, net
    
2,106
      
3,564
      
7,562
      
(1,894
)
                                 
Non-GAAP operating income (loss)
  
$
3,469
    
$
2,569
    
$
9,628
    
$
(1,495
)

 
Selected balance sheet data
   
December 31,
2022
      
December 31,
2021
   
             
Total cash and investments
  
$
257,575
    
$
308,195
  
Insurance subsidiaries
    
251,378
      
302,302
  
Parent and other
    
6,197
      
5,893
  
Total assets
    
367,064
      
402,286
  
Insurance reserves and policyholder funds
    
202,651
      
201,797
  
Debt
    
35,747
      
33,738
  
Total shareholders' equity
    
102,193
      
141,286
  
Book value per common share
    
4.74
      
6.66
  
Statutory capital and surplus
                
Life and health
    
36,672
      
38,625
  
Property and casualty
    
53,023
      
52,724
  

Atlantic American Corporation
Financial Data

   
Three Months Ended
March 31,
  
(Unaudited; In thousands, except per share data)
  
2023
    
2022
  
Insurance premiums
            
Life and health
  
$
28,889
    
$
29,738
  
Property and casualty
    
17,211
      
17,343
  
Insurance premiums, net
    
46,100
      
47,081
  
                 
Net investment income
    
2,541
      
2,340
  
Realized investment losses, net
    
-
      
(10
)
Unrealized gains (losses) on equity securities, net
    
(2,375
)
    
2,193
  
Other income
    
3
      
4
  
                 
Total revenue
    
46,269
      
51,608
  
                 
Insurance benefits and losses incurred
                
Life and health
    
17,800
      
20,691
  
Property and casualty
    
12,660
      
10,478
  
Commissions and underwriting expenses
    
12,918
      
12,836
  
Interest expense
    
750
      
354
  
Other expense
    
3,959
      
3,453
  
                 
Total benefits and expenses
    
48,087
      
47,812
  
                 
Income (loss) before income taxes
    
(1,818
)
    
3,796
  
Income tax expense (benefit)
    
(372
)
    
954
  
                 
Net income (loss)
  
$
(1,446
)
  
$
2,842
  
                 
Earnings (loss) per common share (basic & diluted)
  
$
(0.08
)
  
$
0.13
  
                 
Reconciliation of Non-GAAP financial measure
                
                 
Net income (loss)
  
$
(1,446
)
  
$
2,842
  
Income tax expense (benefit)
    
(372
)
    
954
  
Realized investment losses, net
    
-
      
10
  
Unrealized (gains) losses on equity securities, net
    
2,375
      
(2,193
)
                 
Non-GAAP operating income (loss)
  
$
557
    
$
1,613
  

 
Selected balance sheet data
   
March 31,
2023
      
December 31,
2022
  
 
                 
Total cash and investments
  
$
249,207
    
$
257,575
  
Insurance subsidiaries
    
243,965
      
251,378
  
Parent and other
    
5,242
      
6,197
  
Total assets
    
353,595
      
367,064
  
Insurance reserves and policyholder funds
    
191,243
      
202,651
  
Debt
    
36,738
      
35,747
  
Total shareholders' equity
    
104,379
      
102,193
  
Book value per common share
    
4.85
      
4.74
  
Statutory capital and surplus
                
Life and health
    
32,426
      
36,672
  
Property and casualty
    
53,302
      
53,023
  


v3.23.2
Document and Entity Information
Jun. 30, 2023
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Jun. 30, 2023
Entity File Number 0-3722
Entity Registrant Name ATLANTIC AMERICAN CORPORATION
Entity Central Index Key 0000008177
Entity Incorporation, State or Country Code GA
Entity Tax Identification Number 58-1027114
Entity Address, Address Line One 4370 Peachtree Road
Entity Address, Address Line Two N.E.
Entity Address, City or Town Atlanta
Entity Address, State or Province GA
Entity Address, Postal Zip Code 30319
City Area Code 404
Local Phone Number 266-5500
Title of 12(b) Security Common Stock, par value $1.00 per share
Trading Symbol AAME
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
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