[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, and Cash Flows, with detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects a slight increase in total assets and shareholders' equity, driven by investment fair values Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$384,952** | **$377,626** | | Total Investments | $274,657 | $268,637 | | Cash and cash equivalents | $8,940 | $12,893 | | **Total Liabilities** | **$256,937** | **$259,232** | | Total insurance reserves | $201,064 | $201,906 | | **Total Shareholders' Equity** | **$128,015** | **$118,394** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net income turnaround in Q3 2020, driven by lower insurance benefits and losses incurred Statements of Operations Summary (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $46,269 | $47,745 | $135,416 | $145,890 | | Insurance Premiums, net | $44,978 | $45,005 | $137,027 | $135,256 | | Insurance Benefits and Losses Incurred | $29,219 | $34,719 | $89,878 | $104,177 | | **Net Income (Loss)** | **$1,876** | **($1,392)** | **$321** | **($1,656)** | | **EPS (Diluted)** | **$0.09** | **($0.07)** | **$0.00** | **($0.10)** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly improved, while investing activities shifted to a net cash outflow Cash Flow Summary for the Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | ($904) | ($7,570) | | Net cash (used in) provided by investing activities | ($2,965) | $31,476 | | Net cash used in financing activities | ($84) | ($523) | | **Net (decrease) increase in cash** | **($3,953)** | **$23,383** | | Cash and cash equivalents at end of period | $8,940 | $36,013 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes provide detailed disclosures on financial statement preparation, COVID-19 impact, accounting standards, and key financial items - The company's **primary operating subsidiaries** are **American Southern** (property and casualty insurance) and **Bankers Fidelity** (life and health insurance)[17](index=17&type=chunk) - The company acknowledges the **ongoing uncertainty** and potential business impact from the **COVID-19 pandemic**, including potential difficulties in premium collection and volatility in investment markets, but does not expect a **direct material impact** from increased claims as of the reporting date[20](index=20&type=chunk) Segment Assets (in thousands) | Segment | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | American Southern | $151,865 | $141,524 | | Bankers Fidelity | $221,982 | $224,122 | | Corporate and Other | $11,105 | $11,980 | | **Total Assets** | **$384,952** | **$377,626** | [Management's Discussion and Analysis (MD&A)](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting increased operating income from favorable loss experience in life and health [Overall Corporate Results](index=26&type=section&id=Overall%20Corporate%20Results) Consolidated results shifted to net income in Q3 2020, driven by decreased claims in Medicare supplement business Reconciliation of Net Income (Loss) to Non-GAAP Operating Income (Loss) (in thousands) | Metric | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $1,876 | ($1,392) | $321 | ($1,656) | | Adjustments (Taxes, Inv. Gains/Losses) | $1,105 | ($866) | $7,565 | ($4,053) | | **Non-GAAP operating income (loss)** | **$2,981** | **($2,258)** | **$7,886** | **($5,709)** | - The increase in operating income was primarily driven by favorable loss experience in the life and health operations, specifically a **significant decrease in incurred claims** within the **Medicare supplement line of business** due to **COVID-19 shelter-in-place orders**[81](index=81&type=chunk) [American Southern Segment Analysis](index=28&type=section&id=American%20Southern%20Segment%20Analysis) The P&C segment reported improved underwriting results with a lower combined ratio and increased gross written premiums American Southern Underwriting Ratios | Ratio | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Loss Ratio | 61.8% | 65.2% | 63.0% | 65.9% | | Expense Ratio | 31.6% | 32.4% | 31.3% | 31.1% | | **Combined Ratio** | **93.4%** | **97.6%** | **94.3%** | **97.0%** | - Gross written premiums increased by **8.5%** for the nine-month period, mainly due to a **new agency** that started in the second half of 2019, which increased writings in the **automobile physical damage line of business**[83](index=83&type=chunk) [Bankers Fidelity Segment Analysis](index=30&type=section&id=Bankers%20Fidelity%20Segment%20Analysis) The Life & Health segment saw dramatic profitability improvement due to a sharp drop in the loss ratio Bankers Fidelity Underwriting Ratios | Ratio | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Loss Ratio | 66.5% | 82.8% | 66.9% | 82.2% | | Expense Ratio | 26.6% | 27.4% | 27.8% | 28.1% | | **Combined Ratio** | **93.1%** | **110.2%** | **94.7%** | **110.3%** | - The **significant decrease in the loss ratio** was primarily due to a **much lower number of claims incurred** in the **Medicare supplement line of business**, as policyholders were subject to **shelter-in-place orders** due to **COVID-19**[91](index=91&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Primary cash sources are premiums and investment income, with sufficient liquidity expected to meet obligations - **Primary sources of cash** are written premiums, investment income, and proceeds from the sale and maturity of invested assets[97](index=97&type=chunk) - The parent company had approximately **$4.6 million** of unrestricted cash and investments at September 30, 2020[98](index=98&type=chunk) - **Bankers Fidelity Life Insurance Company** became a member of the **Federal Home Loan Bank of Atlanta (FHLB)** to enhance **financial flexibility**, gaining access to low-cost funding, though no borrowings have been made to date[105](index=105&type=chunk) [Expected Impact of COVID-19](index=32&type=section&id=Expected%20Impact%20of%20COVID-19) Management expects no significant decline in liquidity or operations from COVID-19, despite investment volatility - The **most significant impact of COVID-19** on the Company's financial position has been **volatility in the fair value** of its fixed maturity and equity investments[108](index=108&type=chunk) - For P&C operations, a **reduction in claim frequency and severity** is expected in automobile lines as fewer miles are driven, and **no material adverse effect** is currently anticipated[112](index=112&type=chunk) - For life and health operations, the company has experienced **lower utilization of accident and health benefits**, particularly in the Medicare supplement line, due to **shelter-in-place orders**, and does not expect **significant adverse development** in total benefits and losses[115](index=115&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes during the quarter - Based on an evaluation, management, including the CEO and CFO, concluded that the company's **disclosure controls and procedures were effective** as of the end of the period covered by the report[117](index=117&type=chunk) - There were **no changes in internal control** over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[118](index=118&type=chunk) [Part II. Other Information](index=35&type=section&id=Part%20II.%20Other%20Information) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase plan, with no shares repurchased in Q3 2020 - The **Board of Directors approved a plan** allowing for the repurchase of up to **750,000 shares** of the Company's common stock[120](index=120&type=chunk) Share Repurchases in Q3 2020 | Period | Total Shares Purchased | Maximum Shares Remaining for Purchase | | :--- | :--- | :--- | | July 2020 | 0 | 325,129 | | August 2020 | 0 | 325,129 | | September 2020 | 0 | 325,129 | [Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The exhibits filed with this report include: - **Certifications from the Principal Executive Officer and Principal Financial Officer** pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act - **XBRL Instance Document and related taxonomy files**[123](index=123&type=chunk)

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, 2020 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) Georgia 58-1027114 (State or other jurisdiction of incorporation or organization) (I.R ...

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 March 31, 2020 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) Georgia 58-1027114 (State or other jurisdiction of incorporation or organization) (I. ...

Part I [Business](index=3&type=section&id=Item%201.%20Business) The company is a holding entity for two primary insurance segments, American Southern (P&C) and Bankers Fidelity (Life & Health) [The Company Overview](index=3&type=section&id=The%20Company) The company operates through two main segments, American Southern (P&C) and Bankers Fidelity (Life & Health), with distinct product lines - The company operates as a holding company with two distinct insurance segments: American Southern (Property and Casualty) and Bankers Fidelity (Life and Health), which are managed separately[5](index=5&type=chunk) American Southern Net Earned Premiums by Product Line (in thousands) | Product Line | 2019 | 2018 | | :--- | :--- | :--- | | Automobile liability | $30,649 | $28,840 | | Automobile physical damage | $15,309 | $11,922 | | General liability | $3,309 | $2,920 | | Surety | $6,319 | $7,170 | | Other lines | $3,094 | $2,955 | | **Total** | **$58,680** | **$53,807** | Bankers Fidelity Net Earned Premiums by Product Line (in thousands) | Product Line | 2019 | 2018 | | :--- | :--- | :--- | | Life insurance | $8,427 | $8,921 | | Medicare supplement | $107,001 | $102,658 | | Other accident and health | $7,817 | $7,545 | | **Total** | **$123,245** | **$119,124** | [Marketing](index=4&type=section&id=Marketing) The company utilizes independent agents and direct solicitation for its P&C and life & health insurance products - American Southern utilizes a dual marketing approach, leveraging both **independent agents and direct solicitation** for governmental accounts[10](index=10&type=chunk)[12](index=12&type=chunk) - Bankers Fidelity's distribution relies on a network of **5,783 licensed independent agents** across three channels, with its marketing strategy centered on diversification, differentiation, quality, retention, and profitability[13](index=13&type=chunk) [Underwriting and Claims](index=5&type=section&id=Underwriting%20and%20Claims) Both segments employ distinct underwriting approaches and prioritize prompt, efficient claims processing services - American Southern's underwriting relies on agent expertise and risk management inspections, with periodic reviews to take corrective action if results are below expectations[14](index=14&type=chunk) - Bankers Fidelity uses a **simplified issue approach** for underwriting, reviewing applications based on health questions, medical claims data, and prescription reports[15](index=15&type=chunk) - The Company prioritizes efficient claims services, with American Southern using in-house staff and independent adjusters, while Bankers Fidelity facilitates claims through its website and a dedicated customer service group[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) [Reserves](index=6&type=section&id=Reserves) The company's reserves are primarily for P&C losses, with a practice of reserving at the higher end of a reasonable range - At year-end 2019, **P&C operations accounted for 64% of reserves**, while life and health operations accounted for 36%[19](index=19&type=chunk) - The Company's general practice for P&C operations is to set reserves at the **higher end of the determined reasonable range** if no other value is more probable[19](index=19&type=chunk)[23](index=23&type=chunk) - The December 31, 2019 actuarial review indicated a potential variability in reserves ranging from **8.5% lower to 4.2% higher** than the recorded amount[22](index=22&type=chunk) [Reinsurance](index=8&type=section&id=Reinsurance) Reinsurance is used to mitigate liability on individual risks and protect against catastrophic losses across both segments - American Southern's reinsurance treaties cover excess losses with retentions varying from **$100,000 to $200,000** for liability lines and a **$5.7 million limit excess of $300,000** for property catastrophe[26](index=26&type=chunk)[27](index=27&type=chunk) - Bankers Fidelity retains a maximum of **$100,000 on any single life insurance policy** and cedes 50% of new Medicare supplement premium up to a $15.0 million annualized premium retention[28](index=28&type=chunk) [Competition and Ratings](index=9&type=section&id=Competition%20and%20Ratings) The company competes in a crowded market by focusing on niche areas and maintains 'Excellent' ratings from A.M. Best - American Southern Insurance Company and American Safety Insurance Company are both rated **'A' (Excellent)** by A.M. Best[33](index=33&type=chunk) - Bankers Fidelity Life Insurance Company and Bankers Fidelity Assurance Company are both rated **'A-' (Excellent)** by A.M. Best[33](index=33&type=chunk) [Regulation](index=10&type=section&id=Regulation) The company's insurance subsidiaries are subject to extensive state regulation and exceeded all required capital levels in 2019 - For 2019, Bankers Fidelity Life had two IRIS ratios outside the usual range, and Bankers Fidelity Assurance had three, primarily due to declines in net income and surplus; **management does not expect regulatory action**[37](index=37&type=chunk) - At December 31, 2019, all of the Company's insurance subsidiaries' **Risk-Based Capital (RBC) levels exceeded the required regulatory levels**[38](index=38&type=chunk) [Investments](index=12&type=section&id=Investments) Investment income is a key earnings driver, with a portfolio heavily weighted towards fixed maturities managed by a third party Investment Portfolio Composition as of Dec 31 (in thousands) | Investment Type | 2019 Amount | 2019 Percent | 2018 Amount | 2018 Percent | | :--- | :--- | :--- | :--- | :--- | | Fixed maturities | $232,472 | 86.6% | $210,386 | 87.0% | | Common and non-redeemable preferred stocks | $22,922 | 8.5% | $20,758 | 8.6% | | Policy loans | $2,007 | 0.7% | $2,085 | 0.9% | | Other invested assets | $9,960 | 3.7% | $7,424 | 3.0% | | Other | $1,238 | 0.5% | $1,276 | 0.5% | | **Total investments** | **$268,637** | **100.0%** | **$241,929** | **100.0%** | Investment Portfolio Results (in thousands) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Average invested assets | $253,467 | $252,480 | | Net investment income | $8,979 | $9,549 | | Average yield on investments | 3.5% | 3.8% | | Net realized investment gains | $1,574 | $5,154 | [Executive Officers](index=13&type=section&id=Executive%20Officers%20of%20the%20Registrant) The company is led by long-tenured executives serving as CEO and CFO - **Hilton H. Howell, Jr.** is the Chairman of the Board, President & CEO[49](index=49&type=chunk) - **J. Ross Franklin** is the Vice President, CFO and Corporate Secretary[49](index=49&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, the company has elected not to provide detailed risk factor disclosures - The company, as a smaller reporting company, has **opted out of providing detailed risk factors** in this filing[54](index=54&type=chunk) [Properties](index=14&type=section&id=Item%202.%20Properties) The company and its subsidiary lease their principal office spaces in Atlanta, Georgia - The Company leases its main office space from an affiliate, **Delta Life Insurance Company**[54](index=54&type=chunk) [Legal Proceedings](index=14&type=section&id=Item%203.%20Legal%20Proceedings) Ongoing legal matters are part of the ordinary course of business and are not expected to have a material financial impact - Ongoing legal proceedings are considered part of the ordinary course of business and are **not expected to have a material financial impact**[55](index=55&type=chunk) Part II [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=14&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq, and a share repurchase plan remains active - The company's common stock is traded on the Nasdaq Global Market under the symbol **AAME**[56](index=56&type=chunk) - A share repurchase plan approved in 2016 allows for the repurchase of up to 750,000 shares; as of December 31, 2019, **325,129 shares may still be purchased** under this plan[57](index=57&type=chunk)[59](index=59&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company's consolidated net loss narrowed in 2019, driven by improved P&C underwriting results offset by losses in life and health [Results of Operations](index=18&type=section&id=Results%20of%20Operations) Consolidated net loss improved in 2019 due to higher premium revenue, though the Life & Health segment reported a pre-tax loss Consolidated Financial Summary (in thousands) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Total Revenue | $198,179 | $185,553 | | Loss before income taxes | $(407) | $(971) | | Net Loss | $(386) | $(704) | Income (Loss) Before Income Taxes by Segment (in thousands) | Segment | 2019 | 2018 | | :--- | :--- | :--- | | American Southern (P&C) | $5,729 | $5,661 | | Bankers Fidelity (Life & Health) | $(3,646) | $896 | | Corporate and Other | $(2,490) | $(7,528) | | **Total** | **$(407)** | **$(971)** | [Underwriting Results](index=18&type=section&id=Underwriting%20Results) The P&C segment's underwriting improved while the Life & Health segment's results deteriorated due to higher claims American Southern (P&C) Underwriting Ratios | Ratio | 2019 | 2018 | | :--- | :--- | :--- | | Loss Ratio | 67.4% | 72.2% | | Expense Ratio | 29.2% | 27.4% | | **Combined Ratio** | **96.6%** | **99.6%** | Bankers Fidelity (Life & Health) Underwriting Ratios | Ratio | 2019 | 2018 | | :--- | :--- | :--- | | Loss Ratio | 80.9% | 78.8% | | Expense Ratio | 28.9% | 27.1% | | **Combined Ratio** | **109.8%** | **105.9%** | [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through premiums and investment income, with the parent relying on subsidiary dividends - The Parent company's cash flow depends on dividends and fees from its insurance subsidiaries; dividends paid to the Parent totaled **$4.8 million in both 2019 and 2018**[80](index=80&type=chunk) - The Company has two series of Junior Subordinated Debentures outstanding with a combined net balance of **$33.7 million**, maturing in 2032 and 2033[82](index=82&type=chunk)[187](index=187&type=chunk) - Cash and cash equivalents increased slightly to **$12.9 million** at the end of 2019 from $12.6 million at the end of 2018[82](index=82&type=chunk) [Financial Statements and Supplementary Data](index=25&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements and related notes for fiscal years 2019 and 2018 [Consolidated Financial Statements](index=27&type=section&id=Consolidated%20Financial%20Statements) The company's financial statements show increased assets and equity in 2019 despite a net loss for the year Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Total Investments | $268,637 | $241,929 | | Total Assets | $377,626 | $344,274 | | Total Liabilities | $259,232 | $242,902 | | Total Shareholders' Equity | $118,394 | $101,372 | Consolidated Statement of Operations Highlights (in thousands) | Account | 2019 | 2018 | | :--- | :--- | :--- | | Insurance premiums, net | $181,925 | $172,931 | | Total Revenue | $198,179 | $185,553 | | Total benefits and expenses | $198,586 | $186,524 | | Net Loss | $(386) | $(704) | | Loss per common share | $(0.04) | $(0.05) | [Notes to Consolidated Financial Statements](index=32&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, financial instrument breakdowns, and highlight the potential future impact of COVID-19 - The company adopted new lease accounting standards (ASU 2016-02) on January 1, 2019, resulting in the recognition of a **right-of-use asset and lease liability of $6.1 million**[120](index=120&type=chunk) - As of December 31, 2019, **99.7% of the company's reinsurance recoverables ($32.0 million)** were due from a single reinsurer, General Re Corporation, which is highly rated[180](index=180&type=chunk) - A subsequent event note discloses that the **COVID-19 outbreak** is expected to adversely impact the company's financial statements for the first quarter of 2020 and potentially beyond[211](index=211&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal controls over financial reporting were effective - Management concluded that both disclosure controls and procedures and internal control over financial reporting were **effective as of December 31, 2019**[212](index=212&type=chunk) Part III [Directors, Executive Officers, Compensation, Security Ownership, and Accountant Fees](index=60&type=section&id=Items%2010-14) Required disclosures for directors, officers, and governance are incorporated by reference from the upcoming proxy statement - Most of the information for Part III (Items 10-14) is **incorporated by reference** from the company's forthcoming 2020 proxy statement[214](index=214&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=61&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, supplementary schedules, and exhibits filed as part of the annual report - This section includes supplementary financial schedules such as Condensed Financial Information of Registrant (Parent Company Only), Supplementary Insurance Information, Reinsurance Information, and Supplemental Information Concerning Property-Casualty Insurance Operations[217](index=217&type=chunk)[221](index=221&type=chunk)[228](index=228&type=chunk)[232](index=232&type=chunk)[234](index=234&type=chunk) - Exhibits filed with the report include the company's Restated Articles of Incorporation, Bylaws, a description of common stock, various agreements, and certifications from the CEO and CFO[217](index=217&type=chunk)[218](index=218&type=chunk)

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's consolidated financial statements, management's analysis of financial performance and condition, and an assessment of internal controls [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's consolidated financial statements, including balance sheets, statements of operations, comprehensive income, shareholders' equity, and cash flows, along with detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $383.3 million by September 30, 2019, driven by higher cash and investments, while shareholders' equity also grew Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $36,013 | $12,630 | | Total investments | $247,392 | $241,929 | | Total assets | $383,335 | $344,274 | | **Liabilities & Equity** | | | | Total insurance reserves | $198,324 | $189,048 | | Total liabilities | $266,924 | $242,902 | | Total shareholders' equity | $116,411 | $101,372 | | Total liabilities and shareholders' equity | $383,335 | $344,274 | - Accumulated other comprehensive income (loss) significantly improved, shifting from a loss of **$(7,535) thousand** at year-end 2018 to an income of **$9,791 thousand** as of September 30, 2019[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20Of%20Operations) The company reported a net loss of **$1.4 million** for Q3 2019 and **$1.7 million** for the nine-month period, primarily due to increased insurance benefits and losses Consolidated Statements of Operations Summary (in thousands) | Metric | Q3 2019 | Q3 2018 | 9 Months 2019 | 9 Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $47,745 | $46,370 | $145,890 | $136,353 | | Total benefits and expenses | $49,489 | $45,298 | $147,938 | $137,599 | | Income (loss) before income taxes | $(1,744) | $1,072 | $(2,048) | $(1,246) | | Net income (loss) | $(1,392) | $934 | $(1,656) | $(905) | | EPS (basic and diluted) | $(0.07) | $0.04 | $(0.10) | $(0.06) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20Of%20Comprehensive%20Income%20%28Loss%29) Total comprehensive income significantly improved to **$15.7 million** for the nine-month period, driven by unrealized gains on available-for-sale securities Comprehensive Income (Loss) Summary (in thousands) | Metric | Q3 2019 | Q3 2018 | 9 Months 2019 | 9 Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(1,392) | $934 | $(1,656) | $(905) | | Other comprehensive income (loss), net of tax | $5,064 | $(333) | $17,326 | $(8,788) | | Total comprehensive income (loss) | $3,672 | $601 | $15,670 | $(9,693) | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20Of%20Shareholders%27%20Equity) Shareholders' equity increased to **$116.4 million** by September 30, 2019, primarily due to **$17.3 million** in other comprehensive income offsetting the net loss and dividends - For the nine months ended September 30, 2019, retained earnings decreased from **$37.2 million** to **$34.9 million**, primarily due to a net loss of **$1.7 million** and dividends totaling **$0.7 million**[12](index=12&type=chunk) - Accumulated other comprehensive income saw a significant positive swing, increasing by **$17.3 million** during the first nine months of 2019[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20Of%20Cash%20Flows) Net cash used in operating activities was **$7.6 million**, while investing activities provided **$31.5 million**, leading to a **$23.4 million** increase in cash and equivalents Cash Flow Summary (in thousands) | Cash Flow Activity | 9 Months 2019 | 9 Months 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,570) | $(5,119) | | Net cash provided by (used in) investing activities | $31,476 | $(8,325) | | Net cash used in financing activities | $(523) | $(1,065) | | **Net increase (decrease) in cash** | **$23,383** | **$(14,509)** | | Cash and cash equivalents at end of period | $36,013 | $10,038 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies, investment portfolio, liabilities, debt, and segment performance for American Southern (P&C) and Bankers Fidelity (L&H) - The company adopted the new lease accounting standard (ASU No. 2016-02) on January 1, 2019, recognizing a right-of-use (ROU) asset and lease liability of **$6,088 thousand**[16](index=16&type=chunk)[18](index=18&type=chunk) - The investment portfolio primarily consists of fixed maturities with a fair value of **$217.5 million** and equity securities valued at **$19.5 million**[22](index=22&type=chunk)[25](index=25&type=chunk) - The company has two unconsolidated statutory business trusts with outstanding Junior Subordinated Debentures totaling a net balance of **$33.7 million**[58](index=58&type=chunk)[59](index=59&type=chunk) - The company operates in two principal business units: American Southern (property and casualty insurance) and Bankers Fidelity (life and health insurance)[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the **$1.7 million** net loss, attributing it to unfavorable life and health segment performance despite premium growth, while liquidity remains strong [Overall Corporate Results](index=23&type=section&id=Overall%20Corporate%20Results) The company reported a **$1.7 million** net loss for the nine-month period, despite **6.0%** premium growth, primarily due to increased operating losses in the life and health segment Reconciliation of Net Income (Loss) to Non-GAAP Operating Loss (in thousands) | Metric | Q3 2019 | Q3 2018 | 9 Months 2019 | 9 Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(1,392) | $934 | $(1,656) | $(905) | | Income tax expense (benefit) | $(352) | $138 | $(392) | $(341) | | Realized investment (gains) losses, net | $430 | $(484) | $(1,565) | $(797) | | Unrealized gains on equity securities, net | $(944) | $(1,083) | $(2,096) | $(753) | | **Non-GAAP operating loss** | **$(2,258)** | **$(495)** | **$(5,709)** | **$(2,796)** | - For the nine-month period, premium revenue increased by **6.0%** to **$135.3 million**, driven by Medicare supplement and automobile physical damage business[86](index=86&type=chunk) [American Southern Segment Analysis](index=25&type=section&id=American%20Southern%20Segment%20Analysis) The American Southern (P&C) segment improved its combined ratio to **97.0%** due to a lower loss ratio, despite an increased expense ratio from variable commissions American Southern Performance Summary | Metric | 9 Months 2019 | 9 Months 2018 | | :--- | :--- | :--- | | Net earned premiums | $43,035 thousand | $39,299 thousand | | Underwriting income | $1,303 thousand | $1,018 thousand | | Loss ratio | 65.9% | 72.6% | | Expense ratio | 31.1% | 24.8% | | Combined ratio | 97.0% | 97.4% | - The decrease in the loss ratio for the nine-month period was primarily due to more favorable loss experience from a decline in the severity of losses in the surety line of business[93](index=93&type=chunk) - The increase in the expense ratio was mainly due to a variable commission structure, with variable commissions increasing by **$2.6 million** in the nine-month period[94](index=94&type=chunk) [Bankers Fidelity Segment Analysis](index=26&type=section&id=Bankers%20Fidelity%20Segment%20Analysis) The Bankers Fidelity (L&H) segment's combined ratio deteriorated to **110.3%** due to an increased loss ratio from unfavorable Medicare supplement claims experience Bankers Fidelity Performance Summary | Metric | 9 Months 2019 | 9 Months 2018 | | :--- | :--- | :--- | | Net earned premiums | $92,221 thousand | $88,305 thousand | | Underwriting loss | $(9,537) thousand | $(6,408) thousand | | Loss ratio | 82.2% | 79.2% | | Expense ratio | 28.1% | 28.1% | | Combined ratio | 110.3% | 107.3% | - The increase in the loss ratio was primarily attributable to unfavorable loss experience in the Medicare supplement line of business, which experienced a higher than expected level of claims[98](index=98&type=chunk) [Investment Results and Other Expenses](index=28&type=section&id=Investment%20Results%20and%20Other%20Expenses) Net investment income slightly decreased, while net realized and unrealized investment gains increased, and other expenses rose due to variable commissions and business growth - Net realized investment gains for the nine-month period were **$1.6 million** in 2019, compared to **$0.8 million** in 2018[102](index=102&type=chunk) - The company recognized net unrealized gains on equity securities still held of **$2.1 million** during the nine-month period of 2019, compared to **$0.8 million** in the same period of 2018, due to fluctuations in market values[103](index=103&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity strengthened with cash and equivalents increasing to **$36.0 million**, driven by investment sales, and the Parent company holds **$16.7 million** in unrestricted cash - Cash and cash equivalents increased to **$36.0 million** at September 30, 2019, from **$12.6 million** at December 31, 2018, primarily due to net investment sales exceeding purchases[115](index=115&type=chunk) - At September 30, 2019, the Parent had approximately **$16.7 million** of unrestricted cash and investments[107](index=107&type=chunk) - The company has outstanding Junior Subordinated Debentures with a balance of **$33.7 million**, with interest rates tied to LIBOR[112](index=112&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal control over financial reporting - Based on an evaluation, the company's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2019[119](index=119&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the reporting period[120](index=120&type=chunk) [Part II. Other Information](index=32&type=section&id=Part%20II.%20Other%20Information) This section provides details on unregistered sales of equity securities and lists exhibits filed with the report [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's share repurchase plan was suspended in May 2019, with no shares repurchased during Q3 2019, and a replacement plan is under evaluation - The company's share Repurchase Plan was suspended in May 2019[123](index=123&type=chunk) - No shares of common stock were repurchased by the company during the three-month period ended September 30, 2019[124](index=124&type=chunk)[125](index=125&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[126](index=126&type=chunk)

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, 2019 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) Georgia 58-1027114 (State or other jurisdiction of incorporation or organization) (I.R ...

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 March 31, 2019 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) Georgia 58-1027114 (State or other jurisdiction of incorporation or organization) (I. ...