UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-3722 ATLANTIC AMERICAN CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identi ...

[Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Atlantic American Corporation shifted from net losses in 2024 to net income in Q2 and H1 2025, driven by increased premium revenue and unrealized gains on equity securities Consolidated Financial Performance (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income (Loss) (in millions)** | $3.3 | ($0.7) | $4.1 | ($2.7) | | **Diluted EPS (in dollars)** | $0.15 | ($0.04) | $0.19 | ($0.14) | Operating Income Growth (in millions) | Period | Increase in Operating Income (in millions) | | :--- | :--- | | **Three Months Ended June 30, 2025** | $2.7 | | **Six Months Ended June 30, 2025** | $5.4 | - The increase in net income was primarily the result of increases in premium revenue, coupled with an increase in unrealized gains on equity securities[2](index=2&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management expressed satisfaction with strong earned premium growth across all segments, attributing success to new business and high retention, and anticipates sustained profitable growth - Both property & casualty and life & health segments delivered **strong earned premium growth**, supported by new business momentum and retention of existing contracts[4](index=4&type=chunk) - The company believes it is well-positioned to deliver **sustained, profitable growth** and drive **long-term value creation** for shareholders in the second half of the year[4](index=4&type=chunk) [Business Segment Performance](index=1&type=section&id=Business%20Segment%20Performance) Both Life & Health and Property & Casualty segments contributed to growth, with operating income driven by specific lines and significant year-over-year premium increases - Operating income growth was primarily driven by the inland marine line of business in property and casualty, and the Medicare supplement and group accident and health lines in life and health operations[3](index=3&type=chunk) Net Insurance Premiums by Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Life and health (in thousands)** | $29,005 | $27,449 | $57,587 | $54,123 | | **Property and casualty (in thousands)** | $21,141 | $17,544 | $39,472 | $35,422 | | **Total (in thousands)** | **$50,146** | **$44,993** | **$97,059** | **$89,545** | [Detailed Financial Statements](index=3&type=section&id=Detailed%20Financial%20Statements) This section presents unaudited financial data for Q2 and H1 2025, including consolidated statements of operations, selected balance sheet data, and non-GAAP operating income reconciliation [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 total revenue increased to **$55.3 million**, driven by higher net insurance premiums and unrealized gains on equity securities, resulting in **$3.3 million** net income Q2 2025 vs Q2 2024 Statement of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Total Revenue (in thousands)** | $55,290 | $47,668 | | **Total Benefits and Expenses (in thousands)** | $51,074 | $48,517 | | **Income (Loss) Before Income Taxes (in thousands)** | $4,216 | ($849) | | **Net Income (Loss) (in thousands)** | $3,316 | ($684) | [Selected Balance Sheet Data](index=3&type=section&id=Selected%20Balance%20Sheet%20Data) As of June 30, 2025, the company's financial position strengthened with total assets at **$429.3 million** and book value per common share improving to **$4.94** Balance Sheet Highlights (in thousands, except per share data) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets (in thousands)** | $429,339 | $393,428 | | **Total Shareholders' Equity (in thousands)** | $106,168 | $99,613 | | **Book Value Per Common Share (in dollars)** | $4.94 | $4.61 | [Reconciliation of Non-GAAP Financial Measure](index=1&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measure) Non-GAAP operating income, used to assess core performance, significantly improved in Q2 2025 to **$1.6 million** from a **$1.1 million** loss in Q2 2024 - Operating income (loss) is a non-GAAP measure defined as net income (loss) excluding income tax, realized investment gains/losses, and unrealized gains/losses on equity securities[5](index=5&type=chunk) Reconciliation to Non-GAAP Operating Income (Loss) (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income (Loss) (in thousands)** | $3,316 | ($684) | $4,118 | ($2,682) | | **Non-GAAP Operating Income (Loss) (in thousands)** | $1,591 | ($1,105) | $1,859 | ($3,497) | [Important Disclosures](index=1&type=section&id=Important%20Disclosures) This section provides crucial context, explaining the non-GAAP operating income measure and including a forward-looking statements disclaimer regarding potential risks and uncertainties - The company presents the non-GAAP measure of operating income (loss) to isolate 'core' operating results from items like taxes and investment gains/losses, which management believes are beyond its control or not part of primary operations[5](index=5&type=chunk) - The report contains forward-looking statements that are subject to risks and uncertainties, including macroeconomic conditions, regulatory changes, market disruption, cybersecurity matters, and other factors detailed in SEC filings[6](index=6&type=chunk)

ATLANTA, Aug. 12, 2025 (GLOBE NEWSWIRE) -- Atlantic American Corporation (Nasdaq- AAME) today reported net income of $3.3 million, or $0.15 per diluted share, for the three month period ended June 30, 2025 compared to net loss of ($0.7) million, or ($0.04) per diluted share, for the comparable period in 2024. The Company had net income of $4.1 million, or $0.19 per diluted share, for the six month period ended June 30, 2025, compared to net loss of ($2.7) million, or ($0.14) per diluted share, for the six m ...

Revenue and Income - For the three months ended March 31, 2025, total revenue increased to $50.1 million, up 4.8% from $47.0 million in the same period of 2024[79]. - Net income for the first quarter of 2025 was $0.8 million, or $0.03 per diluted share, compared to a net loss of $2.0 million, or $(0.10) per diluted share, in the first quarter of 2024[80]. - Premium revenue increased by $2.4 million, or 5.3%, to $46.9 million in Q1 2025, driven by growth in group accident and health, individual health, and Medicare supplement lines[81]. - Operating income rose by $2.7 million in Q1 2025, primarily due to increased premium revenue and favorable loss experience in life and health operations[82]. Premiums and Underwriting - American Southern's gross written premiums increased by $0.9 million, or 10.2%, to $9.3 million in Q1 2025, attributed to new programs in inland marine and automobile physical damage lines[84]. - Bankers Fidelity's gross earned premiums rose by $2.8 million, or 7.1%, to $42.6 million in Q1 2025, mainly from the Medicare supplement line due to new business writings[93]. - The loss ratio for Bankers Fidelity improved to 60.6% in Q1 2025, down from 71.7% in Q1 2024, reflecting lower utilization in the Medicare supplement line[96]. - American Southern's combined ratio was 102.2% in Q1 2025, indicating an underwriting loss, compared to 97.1% in Q1 2024[84]. - Commissions and underwriting expenses at American Southern decreased by $0.4 million, or 8.8%, to $4.1 million in Q1 2025, with an expense ratio of 22.6%[89]. - Net earned premium revenue at Bankers Fidelity increased by $1.9 million, or 7.2%, to $28.6 million in Q1 2025, driven by growth in group accident and health and Medicare supplement lines[95]. - Commissions and underwriting expenses increased by $0.4 million, or 3.9%, for the three-month period ended March 31, 2025, compared to the same period in 2024, with underwriting expenses as a percentage of earned premiums decreasing to 37.6% from 38.8%[97]. Investment and Financial Position - Net investment income decreased by $0.1 million, or 4.5%, during the three-month period ended March 31, 2025, primarily due to a decrease in equity earnings from limited partnerships[98]. - The Company recognized net unrealized gains on equity securities of $0.8 million for the three-month period ended March 31, 2025, compared to unrealized losses of $0.1 million for the same period in 2024[100]. - Interest expense decreased by $0.1 million, or 9.5%, for the three-month period ended March 31, 2025, due to changes in the Secured Overnight Financing Rate (SOFR)[101]. - The Parent's insurance subsidiaries reported statutory net income of $4.3 million for the three-month period ended March 31, 2025, compared to $1.6 million for the same period in 2024[105]. - At March 31, 2025, the Parent had approximately $3.5 million of unrestricted cash and investments[104]. - The Company had outstanding borrowings of $4.0 million under the Revolving Credit Agreement as of March 31, 2025[113]. - Cash and cash equivalents increased from $35.6 million at December 31, 2024, to $35.9 million at March 31, 2025, primarily due to net cash provided by investing activities of $1.1 million[114]. - The Company had $47.6 million of statutory capital and surplus at American Southern and $33.5 million at Bankers Fidelity as of March 31, 2025[106]. - The Company intends to pay obligations under Junior Subordinated Debentures using existing cash balances and potential future financing arrangements[109].

Financial Performance - Atlantic American Corporation reported net income of $0.8 million, or $0.03 per diluted share, for Q1 2025, compared to a net loss of ($2.0) million, or ($0.10) per diluted share, in Q1 2024, marking a significant turnaround [2]. - Premium revenue increased by $2.4 million, or 5.3%, to $46.9 million in Q1 2025 from $44.6 million in Q1 2024, driven by growth in life and health operations [2]. - Operating income for Q1 2025 was $0.3 million, a recovery from an operating loss of ($2.4) million in Q1 2024, attributed to improved premium revenue and favorable loss experience [3]. - Total revenue for Q1 2025 reached $50.1 million, up from $47.0 million in Q1 2024, reflecting a positive trend in overall financial performance [9]. Cost Management - Insurance benefits and losses incurred remained stable at $31.9 million in Q1 2025, slightly down from $31.9 million in Q1 2024, indicating effective cost management [9]. Asset Management - The company’s total assets decreased to $388.4 million as of March 31, 2025, from $393.4 million at the end of 2024, reflecting a strategic focus on asset management [9]. - Book value per common share increased to $4.80 in Q1 2025, up from $4.61 in Q4 2024, indicating improved shareholder equity [9]. - Atlantic American Corporation's total cash and investments rose to $268.4 million as of March 31, 2025, compared to $265.7 million at the end of 2024, showcasing liquidity strength [9]. Future Outlook - The company anticipates that recent rate adjustments in property and casualty operations will positively impact future results, highlighting a proactive approach to market conditions [4]. - The company remains confident in its long-term growth trajectory, particularly in the life and health segments, despite challenges in property and casualty operations [4].

Core Insights - Atlantic American Corporation reported a net income of $0.8 million, or $0.03 per diluted share, for Q1 2025, a significant improvement from a net loss of ($2.0) million, or ($0.10) per diluted share, in Q1 2024 [1][10] - The increase in net income was primarily driven by a $2.4 million, or 5.3%, rise in premium revenue, totaling $46.9 million compared to $44.6 million in the same period last year [1][9] - Operating income for Q1 2025 was $0.3 million, a turnaround from an operating loss of ($2.4) million in Q1 2024, attributed to the same factors of increased premium revenue and favorable loss experience [2][9] Financial Performance - Total revenue for Q1 2025 was $50.1 million, up from $47.0 million in Q1 2024 [9] - Insurance premiums from life and health segments increased to $28.6 million from $26.7 million, while property and casualty premiums rose to $18.3 million from $17.9 million [9] - Total benefits and expenses decreased slightly to $49.1 million from $49.5 million year-over-year [9] Management Commentary - The CEO expressed satisfaction with the quarterly results, highlighting improved profitability and growth in insurance premiums, particularly in life and health segments [3] - The company anticipates that recent rate adjustments in property and casualty operations will positively impact future results [3] - Management remains optimistic about long-term growth opportunities for the company [3] Balance Sheet Highlights - As of March 31, 2025, total cash and investments stood at $268.4 million, a slight increase from $265.7 million at the end of 2024 [10] - Total assets decreased to $388.4 million from $393.4 million [10] - Total shareholders' equity increased to $102.4 million from $99.6 million, with a book value per common share rising to $4.80 from $4.61 [10]

Premiums and Revenue - American Southern's net earned premiums for automobile liability increased to $39,788,000 in 2024 from $38,821,000 in 2023, reflecting a growth of 2.5%[16] - Total net earned premiums for Bankers Fidelity reached $111,042,000 in 2024, slightly up from $110,382,000 in 2023, indicating a growth of 0.6%[22] - Bankers Fidelity's Medicare supplement insurance accounted for 82% of its net earned premiums in 2024, while life insurance represented the remaining 18%[21] - Bankers Fidelity's group life insurance premiums increased to $14,700,000 in 2024 from $12,431,000 in 2023, marking a growth of 18.3%[22] Agent and Market Strategy - The number of licensed agents for Bankers Fidelity was approximately 6,243 as of December 31, 2024, with 1,429 agents actively writing policies during the year[25] - The company emphasizes a marketing strategy based on diversification, with unique product offerings such as Vantage Flex Plus® and Vantage Recovery®[28] - The company actively manages its agent selection process and offers profit-sharing arrangements linked to the profitability of the underlying business[23] Claims and Reserves - Approximately 72% of the losses and claims reserves at December 31, 2024, were related to property and casualty operations, while 28% were related to life and health[42] - Bankers Fidelity's claims processing is efficient, with properly documented claims generally paid within five business days of receipt[41] - The Company maintains loss reserves for claims based on known facts and circumstances, with periodic reviews by independent consulting actuaries[49] - The range of reserve estimates for December 31, 2024, indicated that reserves could be as much as 5.2% lower or as much as 25.0% higher than recorded amounts[48] - American Southern had one IRIS ratio outside the usual range due to adverse reserve developments on prior year claims in the commercial automobile liability line[74] Financial Performance - Bankers Fidelity experienced a net loss for the year, primarily due to federal income taxes, which decreased surplus levels[75] - Bankers Fidelity Life Insurance Company saw capital and surplus fall greater than 10% from 2023 to 2024, primarily due to an extraordinary dividend paid to its parent[76] - The Company's insurance subsidiaries' risk-based capital levels exceeded the required regulatory levels as of December 31, 2024[79] - The Company believes it is in compliance with all regulatory requirements concerning reserve levels and financial practices[67] Investments - Total investments decreased from $237,067 thousand in 2023 to $230,126 thousand in 2024, a decline of approximately 2.0%[81] - Average yield on investments slightly decreased from 3.6% in 2023 to 3.5% in 2024[84] - Net investment income decreased from $10,058 thousand in 2023 to $9,791 thousand in 2024, a decline of about 2.7%[84] - Total fixed maturities accounted for 92.4% of total investments in 2024, up from 92.0% in 2023[81] - The total amortized cost of fixed maturities was $236.3 million in 2024, down from $238.6 million in 2023[81] - The total cost of equity securities remained stable at $4.9 million for both 2024 and 2023[82] - Realized investment gains increased significantly from $70 thousand in 2023 to $1,210 thousand in 2024[84] - Other invested assets increased from $7,000 thousand in 2023 to $7,900 thousand in 2024, a growth of approximately 12.9%[82] - The company focuses on quality and diversification in its investment strategy to improve the risk versus return profile[85] Workforce - The company employed 156 people as of December 31, 2024, with 153 being full-time employees[86] Risk Management - American Southern is licensed to operate in 32 states and the District of Columbia, focusing on tailored commercial automobile insurance for large motor pools and fleets[15] - American Southern maintains a property catastrophe treaty with a limit of $5.5 million excess of $500,000 retention[56]

Financial Performance - Atlantic American Corporation reported a net income of $0.4 million, or $0.02 per diluted share, for Q4 2024, compared to a net loss of $2.2 million, or $(0.11) per diluted share, for Q4 2023[2]. - For the full year 2024, the company had a net loss of $4.3 million, or $(0.23) per diluted share, compared to a net loss of $0.2 million, or $(0.03) per diluted share, for 2023[2]. - The increase in net income for Q4 2024 was primarily due to favorable loss experience in life and health operations, particularly in group life and Medicare supplement lines[2]. - The company experienced unfavorable loss experience in property and casualty operations, particularly in the automobile liability line, contributing to the annual net loss[2]. - The non-GAAP operating loss for the year was $(4.958) million, compared to an operating income of $1.542 million in 2023[8]. Revenue and Premiums - Insurance premiums for life and health increased to $29.351 million in Q4 2024 from $26.138 million in Q4 2023, while property and casualty premiums decreased to $16.053 million from $16.781 million[8]. - Total revenue for Q4 2024 was $49.043 million, up from $46.745 million in Q4 2023, with total revenue for the year at $188.227 million compared to $186.793 million in 2023[8]. Dividends and Shareholder Equity - The company declared an annual dividend of $0.02 per share, payable on April 23, 2025, to shareholders of record as of April 9, 2025[3]. - The company's total shareholders' equity decreased to $99.613 million in 2024 from $107.275 million in 2023[8]. Assets - Total assets increased to $393.428 million as of December 31, 2024, compared to $381.265 million in 2023[8].

Financial Performance - Atlantic American Corporation reported a net income of $0.4 million, or $0.02 per diluted share, for the three months ended December 31, 2024, compared to a net loss of $2.2 million, or $(0.11) per diluted share, for the same period in 2023 [1] - For the year ended December 31, 2024, the company had a net loss of $4.3 million, or $(0.23) per diluted share, compared to a net loss of $0.2 million, or $(0.03) per diluted share, for the year ended December 31, 2023 [1] - The increase in net income for the fourth quarter was primarily due to favorable loss experience in life and health operations, particularly in group life and Medicare supplement lines [1] Business Segments - The company experienced exceptional new sales in its Medicare supplement business during the fourth quarter annual enrollment period, with strong momentum continuing into the new year [2] - Rising costs in the commercial automobile market have affected profitability, prompting the company to take steps to improve rates for that line of business [2] Revenue and Expenses - Total revenue for the three months ended December 31, 2024, was $49.043 million, compared to $46.745 million for the same period in 2023 [7] - Insurance premiums for life and health increased to $29.351 million in Q4 2024 from $26.138 million in Q4 2023, while property and casualty premiums decreased slightly from $16.781 million to $16.053 million [7] - Total benefits and expenses for the three months ended December 31, 2024, were $48.498 million, down from $49.847 million in the same period in 2023 [7] Dividends and Shareholder Value - The Board of Directors approved an annual dividend of $0.02 per share, payable on April 23, 2025, to shareholders of record as of April 9, 2025 [2] Balance Sheet Highlights - As of December 31, 2024, total assets were $393.428 million, an increase from $381.265 million in 2023 [8] - Total shareholders' equity decreased to $99.613 million from $107.275 million in the previous year [8] - The book value per common share was $4.61, down from $4.99 in 2023 [8]

Financial Performance - For the three-month period ended September 30, 2024, net income was a loss of $1.998 million, or $(0.10) per diluted share, compared to net income of $1.759 million, or $0.08 per diluted share for the same period in 2023[94]. - Total revenue for the three-month period was $44.519 million, slightly down from $44.591 million in the comparable period in 2023[92]. - The Parent's insurance subsidiaries reported statutory net income of $2.0 million for the nine-month period ended September 30, 2024, down from $8.9 million in the same period of 2023[115]. Revenue and Premiums - Premium revenue for the three-month period increased slightly to $43.782 million from $43.746 million in the comparable period in 2023, while for the nine-month period, it decreased by $2.6 million, or 1.9%, to $133.327 million from $135.906 million[95]. - Net earned premium revenue at Bankers Fidelity increased by $0.4 million, or 1.4%, during the three-month period ended September 30, 2024, but decreased by $2.6 million, or 3.0%, for the nine-month period[105]. - Gross earned premiums from the Medicare supplement line decreased by $1.7 million, or 5.2%, for the three-month period and by $7.4 million, or 7.3%, for the nine-month period ended September 30, 2024[105]. Expenses and Losses - Operating income decreased by $4.3 million for the three-month period and by $10.0 million for the nine-month period ended September 30, 2024, primarily due to unfavorable loss experience in life and health operations[96]. - Insurance benefits and losses incurred increased to $30.760 million for the three-month period ended September 30, 2024, compared to $26.818 million for the same period in 2023[92]. - Insurance benefits and losses incurred at American Southern increased by $2.1 million, or 17.7%, for the three-month period ended September 30, 2024, and by $2.9 million, or 7.7%, for the nine-month period[102]. Ratios and Underwriting - The combined ratio for American Southern was 109.8% for the three-month period ended September 30, 2024, indicating an underwriting loss, compared to 97.9% for the same period in 2023[98]. - The loss ratio for the three-month period ended September 30, 2024, was 86.2%, up from 71.7% in the same period of 2023, while for the nine-month period, it increased to 79.5% from 73.7%[102]. - Commissions and underwriting expenses decreased by $0.5 million, or 11.7%, for the three-month period and by $1.0 million, or 7.7%, for the nine-month period ended September 30, 2024[103]. Investments and Unrealized Losses - Unrealized losses on equity securities were $(1.746) million for the three-month period ended September 30, 2024, compared to $(1.486) million for the same period in 2023[92]. - The Company recognized net unrealized losses on equity securities of $1.7 million during the three-month period ended September 30, 2024, compared to $1.5 million in the same period of 2023[111]. - The Company had net realized investment gains of less than $0.1 million during the three-month period ended September 30, 2024, compared to no gains in the same period of 2023[109]. Cash and Liquidity - As of September 30, 2024, the Company had cash and cash equivalents of $23.0 million, down from $28.3 million at December 31, 2023, primarily due to net cash used in operating activities of $4.8 million[124]. - The Company believes existing cash balances and expected dividends will meet liquidity requirements for the foreseeable future[125]. - The Company has access to low-cost funding through its membership in the Federal Home Loan Bank of Atlanta, with credit availability of approximately $8.2 million as of September 30, 2024[121]. Debt and Borrowings - The Company had outstanding borrowings of $4.0 million under its Revolving Credit Agreement as of September 30, 2024, compared to $3.0 million as of December 31, 2023[123]. - The Company has accrued but unpaid dividends on the Series D Preferred Stock totaling $0.3 million as of September 30, 2024[120]. - The Company has a Revolving Credit Agreement with a maturity date extended to March 22, 2027, and requires maintaining a consolidated net worth of not less than $64.2 million[122]. Internal Controls and Remediation - The Company is in the process of remediating a material weakness in internal control over financial reporting, with remediation efforts ongoing since March 31, 2024[132]. - The Company has implemented a systematic review of underwriting income components for its life products, which includes analytical reports to identify potential anomalies[132]. - The Company is developing a system to perform calculations independently of actuarial models, expected to be operational by December 31, 2024[133]. Stock Repurchase - No common stock purchases were made under the Repurchase Plan during the three-month period ending September 30, 2024, leaving a maximum of 325,129 shares that may yet be purchased[137].