What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-25 compared with 2024-04-01 · 364 added, 339 removed, 971 unchanged (42% of the section changed)

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ATLANTIC AMERICAN CORPORATION

Report of Independent Registered Public Accounting Firm ( FORVIS, LLP ), Atlanta, Georgia , PCAOB Firm ID No.

Report of Independent Registered Public Accounting Firm ( Forvis Mazars, LLP ), Atlanta, Georgia , PCAOB Firm ID No.

Consolidated Balance Sheets as of December 31, 2024 and 2023

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Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

To the Shareholders and Board of Directors

Atlantic American Corporation

Atlanta, Georgia

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Atlantic American Corporation and subsidiaries (the “Company”) as of

December 31, 2023, and 2022, and the related consolidated statements of operations, comprehensive loss, shareholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes and schedules

(collectively, referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and the results of its

operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America (US GAAP).

We have audited the accompanying consolidated balance sheets of Atlantic American Corporation (the Company) as of December 31, 2024 and 2023, the

related consolidated statements of operations, comprehensive loss, shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024 and the related notes (collectively referred to as the consolidated financial

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United

States of America (US GAAP).

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements

based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with

respect to the Company in accordance with the U.S.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the

Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be

independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance

about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of internal control over financial reporting.

As part of our

audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we

express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and

performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used

and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the

accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit

matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or

disclosures to which they relate.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were

communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the

critical audit matters or on the accounts or disclosures to which they relate.

Shareholders and Board of Directors

Atlantic American Corporation

Valuation of Insurance Reserves for Losses and Claims (Claim Reserves)

As reflected on the consolidated balance sheet and discussed in Note 6 to the financial statements, the Company’s insurance reserves for losses and claims (claim

reserves), were $87.5 million as of December 31, 2023.

As reflected on the consolidated balance sheet and discussed in Note 7 to the consolidated financial statements, the Company’s insurance reserves for

losses and claims (claim reserves), were $93.7 million as of December 31, 2024.

The Company’s claim reserves relate primarily to its property casualty lines of business and Medicare supplement business.

The process of establishing claim reserves requires the use of

estimates and judgments based on circumstances underlying the insured loss at the date of accrual.

Management’s judgments include claims adjusters’ evaluations for unpaid claims reported prior to the close of the accounting period, estimates of

incurred but not reported (IBNR) claims based on past experience and estimates of loss adjustment expenses.

The principal considerations for our determination that the valuation of claim reserves is a critical audit matter are the high degree of judgment and subjectivity

in auditing the actuarial methods and assumptions used in the valuation process, including assumptions around expected loss ratios and reported and paid loss emergence patterns.

The process of establishing claim reserves

requires the use of estimates and judgments based on circumstances underlying the insured loss at the date of accrual.

Management’s judgments include claims adjusters’ evaluations for unpaid claims reported prior to the close of the accounting

period, estimates of incurred but not reported (IBNR) claims based on past experience and estimates of loss adjustment expenses.

The principal considerations for our determination that the valuation of claim reserves is a critical audit matter are the high degree of judgment and

subjectivity in auditing the actuarial methods and assumptions used in the valuation process, including assumptions around expected loss ratios and reported and paid loss emergence patterns.

Addressing the matter involved performing the following audit procedures, among others:

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Valuation of Insurance Reserves for Future Policy Benefits (Policy Reserves)

As reflected on the consolidated balance sheet and discussed in Note 6 to the financial statements, the Company’s insurance reserves for future policy

benefits (policy reserves) were $92.5 million as of December 31, 2023.

Policy reserves are related to life and health insurance policies and are based upon significant assumptions including future investment yields, mortality rates, withdrawal

rates and expenses after giving effect to possible risks of unexpected claim experience.

These assumptions are based on historical experience modified as necessary to reflect anticipated trends and are generally established at contract inception.

As reflected on the consolidated balance sheet and discussed in Note 7 to the consolidated financial statements, the Company’s insurance reserves for

future policy benefits (policy reserves) were $98.5 million as of December 31, 2024.

Policy reserves are related to life and health insurance policies and are based upon significant assumptions including future investment yields, mortality rates,

withdrawal rates and expenses after giving effect to possible risks of unexpected claim experience.

These assumptions are based on historical experience modified as necessary to reflect anticipated trends and are generally established at contract

The principal considerations for our determination that the valuation of policy reserves is a critical audit matter are the high degree of judgment

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Reviewing benefit reserve replication workbooks prepared by management for a sample of contracts;

Shareholders and Board of Directors

Atlantic American Corporation

Evaluating management’s loss recognition testing of aggregate reserve sufficiency.

Testing the completeness and accuracy of data used by management in developing assumptions on a sample basis.

/s/ Forvis Mazars, LLP

We have served as the Company’s auditor since 2018.

/s/ FORVIS, LLP

April 1, 2024

Atlanta, Georgia

March 25, 2025

ATLANTIC AMERICAN CORPORATION

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Reinsurance (net of allowance for uncollectible reinsurance of $ 51 and $ 61 )

Insurance premiums and other (net of allowance for expected credit losses $ 217 and

net of allowance for doubtful accounts $ 177 )

Insurance premiums and other (net of allowance for expected credit losses $ 201

Deferred income taxes, net

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Total benefits and expenses

Income (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Loss before income taxes

Income tax benefit

Preferred stock dividends

Net income (loss) applicable to common shareholders

Earnings (loss) per common share (basic and diluted)

Net loss applicable to common shareholders

Loss per common share (basic and diluted)

See the accompanying notes to the consolidated financial statements.

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(In thousands)

Net income (loss)

Other comprehensive gain (loss):

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Balance, beginning of year

Restricted stock grants, net of forfeitures

Balance, end of year

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Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2023

Net income (loss)

Dividends on common stock

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Balance, end of year

Accumulated other comprehensive income (loss):

Accumulated other comprehensive loss:

Balance, beginning of year

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Balance, beginning of year

Restricted stock grants, net of forfeitures

Amortization of unearned compensation

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Balance, beginning of year

Restricted stock grants, net of forfeitures

Net shares acquired related to employee share-based compensation plans

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Net shares acquired under employee share-based compensation plans

Restricted stock grants, net of forfeitures

Balance, end of year

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Cash flows from operating activities:

Net Income (loss)

Adjustments to reconcile net income to net cash provided by operating activities:

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Unrealized losses on equity securities, net

Losses (earnings) from equity method investees

Losses from equity method investees

Compensation expense related to share awards

Provision for credit losses

(Benefit) provision for credit losses

Depreciation and amortization

Deferred income tax benefit

(Increase) decrease in receivables, net

Increase in receivables, net

Increase in insurance reserves and policyholder funds

(Decrease) increase in accounts payable and accrued expenses

Increase (decrease) in accounts payable and accrued expenses

Net cash provided by operating activities

Cash flows from investing activities:

Proceeds from investments sold

Proceeds from investments sold and policy loans redeemed

Proceeds from investments matured, called or redeemed

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Additions to property and equipment

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

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Net cash provided by financing activities

Net (decrease) increase in cash

Net increase (decrease) in cash

Cash and cash equivalents at beginning of year

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See the accompanying notes to the consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

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Receivables amounts due from reinsurers, insureds and agents are evaluated

periodically for collectibility.

periodically for collectability.

Allowances for expected credit losses are established, as and when a loss has been determined probable, against the related receivable.

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ultimately greater price volatility than the value of securities with publicly quoted market prices.

to January 1, 2023, the Company applied other than temporary impairment (“OTTI”) guidance for securities in an unrealized loss position.

An OTTI was recognized in earnings within realized investment gains (losses) when it was anticipated that

the amortized cost would not be recovered.

(i) the Company had the intent to sell the security, or (ii) it was more likely than not that the Company would be required to sell the security before recovery, the reduction of amortized

cost and the OTTI recognized in earnings was the entire difference between the security’s amortized cost and estimated fair value.

If neither of these conditions existed, the difference between the amortized cost of the security and the present

value of projected future cash flows expected to be collected was recognized as a reduction of amortized cost and an OTTI in earnings.

If the estimated fair value was less than the present value of projected future cash flows expected to be

collected, this portion of the decline in value related to other-than-credit factors was recorded in OCI.

January 1, 2023, the Company adopted accounting standards update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using a modified retrospective approach.

Under ASU 2016-13, for securities in an unrealized loss position, a credit loss is recognized in earnings within realized investment gains (losses) when it is anticipated that the amortized cost will not be recovered.

Company has the intent to sell the security;

or (ii) it is more likely than not that the Company will be required to sell the security before recovery, the reduction of amortized cost and the loss recognized in earnings is the entire difference

between the security’s amortized cost and estimated fair value.

If neither of these conditions exists, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected is

recognized as a credit loss by establishing an ACL with a corresponding charge to earnings in realized investment gains (losses).

However, the ACL is limited by the amount that the fair value is less than the amortized cost.

This limitation is

known as the “fair value floor.” If the estimated fair value is less than the present value of projected future cash flows expected to be collected, this portion of the decline in value related to other-than-credit factors (“noncredit loss”) is

recorded in OCI.

loans are carried at unpaid principal balance and are fully collateralized by the cash surrender value of the underlying insurance contract.

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2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”).

This guidance provides optional

expedients and exceptions for applying GAAP to investments, derivatives, or other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform.

with the optional expedients, the amendments include a general principle that permits an entity to consider contract modifications due to reference reform to be an event that does not require contract re-measurement at the modification date or

reassessment of a previous accounting determination.

Additionally, a company may make a one-time election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate

reform and that were classified as held to maturity before January 1, 2020.

Facilitation of the Effects of Reference Rate Reform

on Financial Reporting (“ASU 2020-04”).

This guidance provides optional expedients and exceptions for applying GAAP to investments, derivatives, or other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference

rate expected to be discontinued because of reference rate reform.

Along with the optional expedients, the amendments include a general principle that permits an entity to consider contract modifications due to reference reform to be an event

that does not require contract re-measurement at the modification date or reassessment of a previous accounting determination.

Additionally, a company may make a one-time election to sell, transfer, or both sell and transfer debt securities

classified as held to maturity that reference a rate affected by reference rate reform and that were classified as held to maturity before January 1, 2020.

The Company adopted the guidance as of June 30, 2023.

The adoption of the guidance had no significant impact on the Company’s financial condition and results of

The adoption of the guidance had

no significant impact on the Company’s financial condition and results of operations .

Financial Instruments – Credit Losses.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments

– Credit Losses (Topic 326):

2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).

The updated guidance applies a new credit loss model (current expected credit losses or CECL) for determining credit-related impairments for

financial instruments measured at amortized cost (including reinsurance recoverables, premium and other receivables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures.

The estimate of

expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments.

The expected credit losses, and subsequent adjustments to such losses, are

recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected.

The updated guidance

applies a new credit loss model (current expected credit losses or CECL) for determining credit-related impairments for financial instruments measured at amortized cost (including reinsurance recoverables, premium and other receivables) and

requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures.

The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable

forecasts, including estimates of prepayments.

The expected credit losses, and subsequent adjustments to such losses, are recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net

carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected.

The updated guidance also amends the previous other-than-temporary impairment model for available-for-sale debt securities by requiring the

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The cumulative effect adjustment decreased retained earnings as of January 1, 2023 and increased the allowance for estimated uncollectible reinsurance.

Impact of Adoption on Condensed Consolidated Balance Sheet

Reinsurance Recoverables

The following table presents the balances of reinsurance recoverables, net of the allowance for estimated uncollectible reinsurance, at

January 1, 2023 and December 31, 2023, and the changes in the allowance for estimated uncollectible reinsurance for the year ended December 31, 2023.

Year ended December 31, 2023

(in thousands)

Reinsurance Recoverables,

Net of Allowance for Estimated

Uncollectible Reinsurance

Allowance for Estimated

Uncollectible Reinsurance

Balance, beginning of period

Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2023

Current period change for estimated uncollectible reinsurance

Write-offs of uncollectible reinsurance recoverables

Balance, end of period

Insurance Premium and Other Receivables

The following table presents the balances of insurance premiums and other, net of the allowance for expected credit losses, at January 1,

2023 and December 31, 2023, and the changes in the allowance for doubtful accounts/expected credit losses for the year ended December 31, 2023.

Year ended December 31, 2023

(in thousands)

Insurance Premiums and

Other, Net of Expected Credit

Allowance for Doubtful

Accounts/Expected Credit

Balance, beginning of period

Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2023

Current period change for expected credit losses

Write-offs of uncollectible insurance premiums and other receivables

Balance, end of period

Future Adoption of New Accounting Standards

Accounting for Long-Duration Contracts.

In August 2018, the FASB issued ASU No.

2018-12, Financial

Services —Insurance (Topic 944):

Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”).

This guidance (1) improves the timeliness of recognizing changes in the liability for future policy benefits and modifies

the rate used to discount future cash flows, (2) simplifies and improves the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts, (3) simplifies the amortization of deferred

acquisition costs, and (4) improves the effectiveness of the required disclosures.

ASU 2018-12 is effective for annual reporting periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025, although earlier

adoption is permitted.

The Company is currently evaluating the new guidance, but has not yet determined the method.

The Company will adopt on January 1, 2025.

Segment Reporting .

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting- An Amendment for Improvements to Reportable Segment Disclosures (Topic 280).

The amendments in ASU 2023-07 improve reportable segment

disclosure requirements through enhanced disclosures about significant segment expenses.

2023-07, Segment Reporting- An Amendment for Improvements to Reportable Segment Disclosures (Topic 280) ( “ ASU 2023-07 ” ).

amendments in ASU 2023-07 improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses.

The amendment;

introduces a new requirement to disclose significant segment expenses regularly provided to the chief operating decision maker (CODM);

introduces a new requirement to disclose significant segment expenses regularly

provided to the chief operating decision maker (CODM);

extends certain annual disclosures to interim periods;

clarifies single reportable segment entities must apply ASC 280 in its entirety, permits more than one measure of segment profit or loss to be reported under certain conditions, and

requires disclosure of the title and position of the CODM.

clarifies single reportable segment entities must apply Topic 280 in its entirety, permits more than one measure of segment profit

or loss to be reported under certain conditions, and requires disclosure of the title and position of the CODM.

The amendments in this update do not change or remove existing disclosure requirements.

The Update is effective for fiscal years beginning after December 15, 2023, and interim periods

within fiscal years beginning after December 15, 2024, although early adoption is permitted.

The Company is evaluating the new guidance and any effect it will have on the Company’s financials.

The Update is effective for fiscal years

beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, although early adoption is permitted.

The company adopted ASU No.

2023-07 on December 31, 2024.

Refer to Note 17 of Notes to

Consolidated Financial Statements for details regarding the Company’s Segment Information.

Future Adoption of New Accounting Standards

Accounting for Long-Duration Contracts .

2018, the FASB issued ASU No.

2018-12, Financial Services —Insurance (Topic 944):

Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”).

This guidance (1) improves the timeliness of recognizing changes in the

liability for future policy benefits and modifies the rate used to discount future cash flows, (2) simplifies and improves the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts,

(3) simplifies the amortization of deferred acquisition costs, and (4) improves the effectiveness of the required disclosures.

ASU 2018-12 is effective for annual reporting periods beginning after December 15, 2024 and interim periods

beginning after December 15, 2025, although earlier adoption is permitted.

The Company is currently evaluating the new guidance and considering appropriate cohorts to be reported, such as lines of business and both premium paying and

nonpremium paying policies.

The Company expects to use the modified retrospective method upon adoption.

Although the financial impact on the financial statements has not been determined, it is presumed to be material.

Income Taxes .

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The ASU, which also includes certain other amendments to

improve the effectiveness of income tax disclosures, is effective for public business entities for annual periods beginning after Dec.

The Company is evaluating the new guidance and any effect it will have on the Company’s financials.

improve the effectiveness of income tax disclosures, is effective for public business entities for annual periods beginning after December 15, 2024.

The Company is evaluating the new guidance and any effect it will have on the Company’s

Expense Disaggregation Disclosures .

November 2024, the FASB issued ASU No.

2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”).

This Update requires disaggregated disclosure of income statement expenses for public

business entities (“PBE”).

The ASU does not change the expense captions an entity presents on the face of the income statement;

rather, it requires disaggregation of certain expense captions into specified categories in disclosures within

the footnotes to the financial statements.

ASU 2024-03 adds ASC 220-40 to require a footnote disclosure about specific expenses by requiring companies to disaggregate, in a tabular presentation, each relevant expense caption on the face of

the income statement that includes employee compensation, depreciation, and intangible asset amortization.

The tabular disclosure would also include certain other expenses, which do not apply to the Company.

The ASU does not change or

remove existing expense disclosure requirements;

however, it may affect where that information appears in the footnotes to the financial statements.

ASU 2024-03 is effective for all PBEs for fiscal years beginning after December 15, 2026,

and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the new guidance and any effect it will have on the Company’s financials.

Use of Estimates in the Preparation of Financial Statements

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Government agencies and authorities

Loan backed and structured securities

Obligations of states and political subdivisions

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Government agencies and authorities

Loan backed and structures securities

Obligations of states and political subdivisions

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Total fixed maturities

Bonds having an amortized cost of $ 14,647

and $ 12,333 and included in the tables above were on deposit with insurance regulatory authorities at December 31, 2023 and 2022,

respectively, in accordance with statutory requirements.

Additionally, bonds having an amortized cost of $ 9,584 and $ 7,221 and included in the tables above were pledged as collateral to FHLB at December 31, 2023 and 2022, respectively.

Bonds having an amortized cost of $ 15,065 and $ 14,647 and included in the tables above were on deposit with

insurance regulatory authorities at December 31, 2024 and 2023, respectively, in accordance with statutory requirements.

In addition, the Company maintains cash and cash equivalents on deposit with insurance regulatory authorities of $ 226 at December 31, 2024 and 2023.

Additionally, bonds having an amortized cost of $ 9,209 and $ 9,584 and included in the tables above were pledged as collateral

to FHLB at December 31, 2024 and 2023, respectively.

Equity securities:

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The carrying value and amortized cost of the Company’s investments in fixed maturities at December 31, 2024 and 2023 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.

Actual maturities may differ from

contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.

Due in one year or less

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Government agencies and authorities

Loan backed and structured securities

Obligations of states and political subdivisions

Corporate securities

Redeemable preferred stocks

Total temporarily impaired securities

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Government agencies and authorities

Loan backed and structured securities

Obligations of states and political subdivisions

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The Company also

considers ratings from Nationally Recognized Statistical Rating Organizations (NRSROs), as well as the specific characteristics of the security it owns including seniority in the issuer’s capital structure, covenant protections, or other relevant

considers ratings from Nationally Recognized Statistical Rating Organizations, as well as the specific characteristics of the security it owns including seniority in the issuer’s capital structure, covenant protections, or other relevant features.

From these reviews, the Company evaluates the issuers’ continued ability to service the Company’s investment through payment of interest and principal.

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expected to be collected due to credit related factors and as a result, a credit allowance will be estimated.

The Company had no ACL

on its available-for-sale fixed maturities as of December 31, 2023.

The Company did no t record any other than temporary impairments as

of December 31, 2022.

The Company had no

ACL on its available-for-sale fixed maturities as of December 31, 2024 and 2023.

Investment income was earned from the following sources:

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Invested Assets

Realized investment gains (losses), net

Realized investment gains, net

Proceeds from the sales of available-for-sale fixed maturities were as follows:

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Sales proceeds

Sales of available-for-sale securities in 2023 and 2022 were primarily a result of improving the overall risk versus return profile of the

Sales of available-for-sale securities in 2024 and 2023 were primarily a result of improving the

overall risk versus return profile of the portfolio.

In addition, the Company sold its interest in a certain limited liability company held as other invested assets to a third-party in 2024.

The following table presents the portion of unrealized gains (losses) related to equity securities still held for the years ended December 31, 2024

Net realized and unrealized gains (losses) recognized during the period on equity securities

Net realized and unrealized losses recognized during the period on equity securities

Net realized gains recognized during the period on equity securities sold during the period

Unrealized gains (losses) on equity securities, net

Unrealized losses on equity securities, net

The Company’s bond portfolio included 99 %

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at December 31, 2024 and 2023.

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.

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 $ 7,619 and $ 6,624 , at December 31, 2023 and 2022, respectively.

of December 31, 2023 and 2022, the Company had outstanding commitments totaling $ 4,518 and $ 5,872 , respectively, 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.

reduction in the Company’s outstanding commitments was a result of an additional investment of $ 1,354 in the partnership.

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 $ 7,854 and $ 7,619 ,

at December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, the Company had outstanding commitments totaling $ 2,200

and $ 4,518 , respectively, 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.

The reduction in the Company’s outstanding commitments was a result of an additional investment of $ 2,318 in

the partnership.

Disclosures About Fair Value of Financial Instruments

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as a disclosure of levels for classes of these financial assets.

Allowance for Expected Credit Losses

Reinsurance Recoverables

The following table presents the balances of reinsurance recoverables, net of the allowance for expected credit losses, at December 31, 2024 and

2023, and the changes in the allowance for expected credit losses for the year ended December 31, 2024 and 2023.

At and year ended December 31, 2024

Reinsurance Recoverables,

Net of Allowance for

Expected Credit Losses

Allowance for Expected

Credit Losses

Balance, beginning of period

Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2023

Current period change for estimated uncollectible reinsurance

Write-offs of uncollectible reinsurance recoverables

Balance, end of period

At and year ended December 31, 2023

Reinsurance Recoverables,

Net of Allowance for

Expected Credit Losses

Allowance for Expected

Credit Losses

Balance, beginning of period

Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2023

Current period change for estimated uncollectible reinsurance

Write-offs of uncollectible reinsurance recoverables

Balance, end of period

Insurance Premium and Other Receivables

The following table presents the balances of insurance premiums and other, net of the allowance for expected credit losses, at December 31, 2024 and

2023, and the changes in the allowance for expected credit losses for the year ended December 31, 2024 and 2023.

At and year ended December 31, 2024

Insurance Premiums and

Other, Net of Expected

Credit Losses

Allowance for Expected

Credit Losses

Balance, beginning of period

Current period change for expected credit losses

Write-offs of uncollectible insurance premiums and other receivables

Balance, end of period

At and year ended December 31, 2023

Insurance Premiums and

Other, Net of Expected

Credit Losses

Allowance for Expected

Credit Losses

Balance, beginning of period

Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2023

Current period change for expected credit losses

Write-offs of uncollectible insurance premiums and other receivables

Balance, end of period

Deferred Policy Acquisition Costs

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The software is managed, hosted, supported, and delivered as a cloud-based software service product offering (software-as-a-service).

term of the arrangement is five years from the effective date with a renewal term of an additional five years .

term of the arrangement , as amended , was three years .

The arrangement was renewed in March 2024 for an additional five years , with a subsequent renewal

term of five years .

Service fees related to the hosting arrangement are recorded as an expense in the Company’s condensed consolidated

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Implementation expenses incurred related to third party professional and consulting services have been capitalized.

The Company will begin amortizing, on a straight-line basis over the expected ten year term of the hosting arrangement, when the software is substantially ready for its intended use.

The Company incurred and capitalized

implementation costs of $ 1,545 and $ 2,522

during the years ended December 31, 2023 and 2022, respectively.

The Company has capitalized $ 4,567 and $ 3,022 in implementation costs in other assets in its condensed consolidated balance sheet as of December 31, 2023 and 2022, respectively.

expects the software will be substantially ready for its intended use during 2024.

Accordingly, the Company has no t recorded any

amortization expense related to software implementation costs for years ended December 31, 2023 and 2022.

The Company will begin amortizing, on a straight-line basis over the expected remaining term

of the hosting arrangement, when the software is substantially ready for its intended use.

The Company incurred and capitalized implementation costs of $ 108

and $ 1,545 during the years ended December 31, 2024 and 2023, respectively.

The Company has capitalized $ 4,675 and $ 4,567 in implementation costs

in other assets in its condensed consolidated balance sheet as of December 31, 2024 and 2023, respectively.

The Company expects the software will be substantially ready for its intended use during 2025.

Accordingly, the Company has no t recorded any amortization expense related to software implementation costs for years ended December 31, 2024 and 2023.

Insurance Reserves and Policyholder Funds

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mortality rates, disablement rates, benefit utilization rates, and lapse rates after giving effect to possible risks of unexpected adverse claim experience.

The mortality, disablement rates, benefit utilization rates, and lapse assumptions are

based upon the Company’s experience and incorporate a margin for adverse experience development.

The mortality, morbidity, and lapse assumptions are based upon the Company’s experience

and incorporate a margin for adverse experience development.

These assumptions are modified as necessary to reflect anticipated trends and are generally established at contract inception.

The interest rates

assumed, which reflect future investment yields at the time policies are issued, are generally:

The interest rates assumed, which reflect future

investment yields at the time policies are issued, are generally:

(i) 2.5 % to 5.5 % for issues prior to 1977 , (ii) 5.5 % to 7.0 % for 1977 through 1979 issues, (iii) 9.0 %

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Balance at December 31

Prior years’ development was primarily the result of unfavorable development in the automobile

liability line of business in the property and casualty operations due to inflationary factors.

Prior years’ development was primarily the result of favorable development in the Medicare

supplement line of business in the life and health operations, as well as favorable development in the surety line of business in the property and casualty operations.

Prior years’ development was primarily the result of unfavorable

development in the automobile liability line of business in the property and casualty operations due to frequency and severity in the inflationary factors, as well as unfavorable development in the 2021 and 2022 accident years.

Prior years’ development was primarily the result of unfavorable

development in the property and casualty operations predominately in the automobile liability line of business due to inflationary factors, partially offset by favorable development in the Medicare supplement line of business in the

life and health operations.

Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred:

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Multiple payments on the same claim are not counted in the claim frequency data.

Estimated ultimate claims incurred, using claims data reported during

each month of any given year, are calculated using the chain ladder method modified to reflect seasonality by trend-adjusting expected claims for the most recent four-month period prior to the statement date.

Additional adjustments to the

estimated ultimate claims incurred are then applied to account for seasonal changes in claim experience and changes in the rate of claim processing.

The IBNR is calculated as the estimated ultimate claims less the total of paid claims through the

valuation date and claims in the course of settlement as of the valuation date.

Thirty-six months of loss data are used to develop the

estimated ultimate incurred claims.

For other accident and health products that have very small claim volumes, similar approaches are used and modified to reflect the unique aspects of the products.

For Medicare Supplement policies, the estimated ultimate claims

incurred, using claims data reported during each month of any given year, are calculated using the chain ladder method.

Because claim patterns vary significantly during the year, this method is modified to reflect claim experience over the

corresponding four-month period prior to the statement date during the prior two calendar years, and recent claim experience during a twelve-month period from sixteen months prior to the valuation date through five months prior to the valuation

Additional adjustments to the estimated ultimate claims incurred are then applied to account for seasonal changes in claim experience and changes in the rate of claim processing.

The liability for Medicare Supplement claims that are

Incurred but Not Reported (the IBNR) is calculated by subtracting both paid claims through the valuation date and claims in the course of settlement as of the valuation date from the estimated ultimate claims.

Thirty-six months of loss data are used to develop the estimated ultimate incurred claims.

For other accident and health products and life products,

similar approaches are used and modified to reflect the unique aspects of the products.

Automobile Liability

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Accident Year

All outstanding liabilities before 2020, net of reinsurance

Liabilities for losses, claims and loss adjustment expenses, net of reinsurance

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The following is supplementary information about average historical claims duration as of December 31, 2024.

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)

Average Annual Percentage Payout of Incurred Claims by Age, Net of Subrogation and Reinsurance (Unaudited)

Medicare Supplement

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Reinsurance recoverables of $ 22,887 were due from General Re Corporation, rated “AA+” by Standard & Poor’s and “A++” (Superior) by A.M.

Allowances for uncollectible amounts are established

against reinsurance recoverables, if appropriate.

Allowances for uncollectible amounts are established against

reinsurance recoverables, if appropriate.

Property and Casualty Operations

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December 31, 2023

Recoverable on unpaid losses

Recoverable on unpaid losses, net of allowance

Recoverable on unpaid benefits

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Total income taxes were allocated as follows:

Total tax expense (benefit) on income

Total tax benefit on income

Tax expense (benefit) on components of shareholders’ equity:

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Total tax expense (benefit)

A reconciliation of the differences between income taxes computed at the federal statutory income tax rate and the income tax expense (benefit) is

A reconciliation of the differences between income taxes computed at the federal statutory income tax rate and the income tax benefit is as

Federal income tax provision at the statutory rate

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Parking disallowance

Penalties and fines

Adjustment for prior years’ estimates to actual

Income tax expense (benefit)

Income tax benefit

Effective tax rate

The primary difference between the effective tax rate and the federal statutory income tax rate for 2024 resulted from a permanent difference related to meals and entertainment.

Also contributing to differences between the effective tax rate and the federal statutory income tax rate was the adjustment for prior years’ estimates to actual that are generally updated at the completion of the third quarter of each fiscal

year and were $ 35 in the year ended December 31, 2024.

Another contributing factor to the differences between the effective tax rate

and the federal statutory income tax rate was a permanent difference related to dividends-received deduction (“DRD”).

The current estimated DRD is adjusted as underlying factors change and can vary from estimates based on, but not limited to,

actual distributions from investments as well as the amount of the Company’s taxable income.

The primary difference between the effective tax rate and the federal statutory income tax rate for 2023 resulted from the adjustment for prior years’ estimates to actual of $ 299 in the year ended December 31, 2023, which included the return to provision adjustment that is generally updated at the completion of the third

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entertainment.

The primary differences between the effective tax rate and the federal statutory income tax rate for 2022 resulted from a permanent difference related to penalties and fines

incurred of $ 149 .

Also contributing to differences between the effective tax rate and the federal statutory income tax rate were the

adjustment for prior years’ estimates to actual that are generally updated at the completion of the third quarter of each fiscal year and were $ 86

in the year ended December 31, 2022.

Other contributing factors to the differences between the effective tax rate and the federal statutory income tax rate were permanent differences related to meals and entertainment and the dividends-received

deduction (“DRD”).

The current estimated DRD is adjusted as underlying factors change and can vary from estimates based on, but not limited to, actual distributions from investments as well as the amount of the Company’s taxable income.

Deferred tax assets and liabilities at December 31, 2024 and 2023 were comprised of the following:

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Deferred and uncollected premiums

Net unrealized investment gains

Total deferred tax liabilities

Net deferred tax asset

The components of income tax expense (benefit) were:

The components of income tax benefit were:

Current – Federal

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Credit Arrangements

expected, discontinuation of London Interbank Offered Rate (“LIBOR”) occurred on June 30, 2023 (“LIBOR Cessation Date”) and affected the rates used in the Company’s credit arrangements after that date.

On March 15, 2022, the U.S.

enacted the Adjustable Interest Rate LIBOR Act (the “LIBOR Act”) to address LIBOR’s cessation and to establish a clear and uniform process for replacing the overnight and one-, three-, six- and 12-month tenors of USD LIBOR in existing contracts

that do not provide for the use of a clearly defined or practicable replacement benchmark rate (“tough legacy contracts”).

Further, the Board of Governors of the Federal Reserve System issued regulations, 12 C.F.R.

Part 253, “Regulations

Implementing the Adjustable Interest Rate LIBOR Act (Regulation ZZ),” which relate to the LIBOR transition.

On May 12, 2021, the Company entered into a Revolving Credit Agreement (the “Credit Agreement”) with Truist Bank as the lender (the “Lender”).

The Credit Agreement provides for

an unsecured $ 10,000 revolving credit facility that matures on April 12, 2024 .

Prior to July 1, 2023, the Company paid interest on the unpaid principal balance of outstanding revolving loans at the 1 -month LIBOR Rate (as defined in the Credit Agreement) plus 2.00 %, subject to a LIBOR floor rate of 1.00 %.

Effective July 1, 2023, the interest rate on the

unpaid principal balance of outstanding revolving loans is determined based on a reference rate of the 1 -month Term Secured

Overnight Financing Rate (“SOFR”) published by Chicago Mercantile Exchange Group Benchmark Administration Limited (“CME”) (as defined in the Credit Agreement) plus a spread adjustment of 0.11448 % plus 2.00 %, subject to a SOFR floor rate of 1.00 %.

On May 12, 2021, the Company entered into a Revolving Credit Agreement with Truist Bank as the lender (the “Lender”).

The Revolving Credit Agreement provides for an unsecured $ 10,000 revolving credit facility that originally matured on April 12, 2024 .

On March 22, 2024, the Company entered into a First Amendment (the “Amendment”) to its Revolving Credit Agreement (as amended, the “Credit Agreement”) with the Lender.

The Amendment, among other things, (a) updates the interest rate provisions to memorialize that the Company pays interest on the unpaid principal balance of outstanding revolving loans at the Adjusted Term SOFR rate (as defined in the Credit Agreement), plus 2.00 %,

(b) extends the maturity date of the revolving credit facility to March 22, 2027 , (c) requires the monthly payment of an unused

commitment fee of 0.2 % of the unused facility amount, and (d) requires that the Company maintain a consolidated net worth of not

less than $ 64,200 .

Except as modified by the Amendment, the existing terms of the original Credit Agreement remain in effect.

The Credit Agreement requires the Company to comply with certain covenants, including a debt-to-capital ratio that restricts the Company from incurring consolidated indebtedness

that exceeds 35 % of the Company’s consolidated capitalization at any time.

The Credit Agreement also contains customary

representations and warranties and events of default.

Events of default include, among others, (a) the failure by the Company to pay any amounts owed under the Credit Agreement when due, (b) the failure to perform and not timely remedy

certain covenants, (c) a change in control of the Company and (d) the occurrence of bankruptcy or insolvency events.

Upon an event of default, the Lender may, among other things, declare all obligations under the Credit Agreement immediately

due and payable and terminate the revolving commitments.

As of December 31, 2023 and 2022, the Company had outstanding borrowings of $ 3,019 and $ 2,009 , respectively, under the Credit Agreement.

that exceeds 35 % of the Company’s consolidated capitalization at any time and maintaining a minimum consolidated net worth, as

previously mentioned.

The Credit Agreement also contains customary representations and warranties and events of default.

Events of default include, among others, (a) the failure by the Company to pay any amounts owed under the Credit

Agreement when due, (b) the failure to perform and not timely remedy certain covenants, (c) a change in control of the Company and (d) the occurrence of bankruptcy or insolvency events.

Upon an event of default, the Lender may, among other

things, declare all obligations under the Credit Agreement immediately due and payable and terminate the revolving commitments.

As of December 31, 2024 and 2023, the Company had outstanding borrowings of $ 4,023 and $ 3,019 , respectively,

under the Credit Agreement.

For the year ended 2024 and 2023, the Company incurred $ 283 and $ 200 in interest expense, respectively, on the revolving credit facility borrowing.

During the year ended 2024 and 2023, the Company paid $ 9 and $ 0 , respectively, in fees on

the available unused amount of the revolving credit facility of $ 6,000 .

At December 31, 2024 and 2023, the effective interest rate

was 6.67 % and 7.46 %,

respectively.

Junior Subordinated Debentures

The Company has two unconsolidated

Connecticut statutory business trusts, which exist for the exclusive purposes of:

The Company has two unconsolidated Connecticut statutory business trusts, which exist for the exclusive

(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 the Company;

(ii) investing the gross proceeds of the Trust Preferred Securities in junior

subordinated deferrable interest debentures (“Junior Subordinated Debentures”) of the Company;

and (iii) engaging in those activities necessary or incidental thereto.

At December 31,

2023, the effective interest rate was 9.69 %.

The outstanding $ 18.0 million and $ 15.7 million of Junior Subordinated Debentures mature on December 4, 2032 and May 15, 2033 , respectively, are callable quarterly, in whole or in part, only at the option of the

Prior to July 1, 2023, the interest rate was based on 3 -month LIBOR plus an applicable margin.

The margin ranges from 4.00 % to 4.10 %.

Effective July 1,

2023, the interest rate is determined based on a reference rate of the 3 -month SOFR plus applicable tenor spread of 0.26161 percent plus an applicable margin, ranging from 4.00 %

The outstanding $ 18,042 and $ 15,696 of Junior Subordinated Debentures mature on December 4, 2032

and May 15, 2033 , respectively, are callable quarterly, in whole or in part, only at the option of the Company.

Prior to July 1,

2023, the interest rate was based on 3 -month LIBOR plus an applicable margin.

Effective July 1, 2023, the interest rate is determined based on a reference rate of the 3 -month SOFR plus applicable tenor spread of 0.26161 % plus an applicable margin, ranging from 4.00 %

At December 31, 2024, the effective interest rate was 8.82 %.

The financial structure of each of Atlantic American Statutory Trust I and II, as of December 31, 2024 and 2023, was as follows:

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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.

The original term of the first lease was to automatically renew on an annual basis and was amended on December 26, 2024, when the Company and its subsidiary,

Bankers Fidelity Life Insurance Company, entered into a Second Amendment to Lease Agreement (the “Second Amendment”) with 4370 Peachtree LLC.

The Second Amendment amends the Lease Agreement, dated November 1, 2007, by and among the same parties

(as previously amended, the “Lease Agreement”), pursuant to which the Company leases space for its principal offices and for some of its insurance operations in an office building located in Atlanta, Georgia.

Pursuant to the Second Amendment, the

Lease Agreement was modified to increase the base rent payable by the Company, beginning January 1, 2025.

The Second Amendment also provides for rent adjustment on January 1, 2027, January 1, 2030 and each five years thereafter.

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.

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on the consolidated balance sheet

As of December 31, 2023, the Company has no operating leases that have not yet commenced.

Benefit Plans

Equity Incentive Plan

On May 1, 2012, the

Company’s shareholders approved the 2012 Equity Incentive Plan (the “2012 Plan”).

The 2012 Plan authorized the grant of up to 2,000,000

stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, performance units and other awards for the purpose of providing the Company’s non-employee directors, consultants, officers and other

employees incentives and rewards for performance and service.

The 2012 Plan expired on April 30, 2022, ten years after its effective

As such, no grants have been or will be made under the 2012 Plan on or after its expiration, but outstanding awards granted

thereunder will continue in accordance with their terms.

On May 24, 2022, the Company’s shareholders approved the 2022 Equity and Incentive Compensation Plan (the “2022 Plan”).

The 2022 Plan authorizes the grant of up to 3,000,000 stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, performance units and other awards, and succeeded the 2012 Plan for the

purpose of providing the Company’s non-employee directors, consultants, officers and other employees incentives and rewards for performance and service.

During the year ended 2023, there were no restricted shares issued under the 2022 Plan.

During the year ended

2022, a total of 40,000 restricted shares, with an estimated fair value of $ 122 were issued under the 2022 Plan, and a total of 25,000 restricted

shares, with an estimated fair value of $ 71 were issued under the 2012 Plan.

The estimated fair value of the restricted shares

issued was based on the common stock price at date of grant.

2012 Plan for the purpose of providing the Company’s non-employee directors, consultants, officers and other employees incentives and rewards for performance and service.

During the year ended 2024 and 2023, there were no restricted shares issued under the 2022 Plan.

estimated fair value of the restricted shares issued are based on the common stock price at date of grant.

Stock grants are generally issued from treasury shares.

Vesting of restricted shares generally occurs after a one to three year period following the date of grant.

The Company accounts for

forfeitures as they occur.

There were no stock options granted or outstanding under the 2022 Plan in 2023 or 2022.

There were no stock options granted or outstanding under the 2012 Plan in 2022.

Vesting of restricted shares generally occurs after a one to three year period following the

date of grant.

The Company accounts for forfeitures as they occur.

There were no stock options granted or outstanding under the

2022 Plan in 2024 and 2023.

Shares available for future grant under the 2022 Plan at December 31, 2023 and 2022 were 2,960,000 .

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Under the Plan, employees may defer up to 50 % of their compensation, not to exceed the annual deferral limit.

The Company’s total matching contribution for 2023 and 2022 was $ 283 and $ 255 , respectively, and consisted

of a contribution equal to 35 % of up to the first 6 % of each participant’s contributions.

In addition to the matching contribution, the Company also provided a 3 %

safe harbor non-elective contribution in 2023 and 2022 of $ 629 and $ 569 , respectively.

The Company’s total matching contribution for 2024 and 2023 was $ 306 and $ 283 , respectively, and

consisted of a contribution equal to 35 % of up to the first 6 % of each participant’s contributions.

In addition to the matching contribution, the Company also provided a 3 % safe harbor non-elective contribution in 2024 and 2023 of $ 682 and $ 629 , respectively.

All contributions were made in cash.

Participants are 100% vested in their own contributions and the vested percentage attributable to certain employer

contributions is based on a five-year graded schedule.

Participants are 100% vested in their own contributions and the vested percentage attributable

to certain employer contributions is based on a five-year graded schedule.

Agent Stock Purchase Plan

The Company initiated a nonqualified stock purchase plan (the “Agent Stock Purchase Plan”) in May 2012.

The purpose of the Agent Stock Purchase Plan

is to promote and advance the interests of the Company and its shareholders by providing independent agents who qualify as participants with an opportunity to purchase the common stock of the Company.

Under the Agent Stock Purchase Plan, payment

for shares of common stock of the Company is made by either deduction from an agent’s commission payment or a direct cash payment.

The purpose of the Agent Stock Purchase

Plan is to promote and advance the interests of the Company and its shareholders by providing independent agents who qualify as participants with an opportunity to purchase the common stock of the Company.

Under the Agent Stock Purchase Plan,

payment for shares of common stock of the Company is made by either deduction from an agent’s commission payment or a direct cash payment.

Stock purchases are made at the end of each calendar quarter at the then current market value.

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accrue annual dividends at a rate of $ 7.25 per share (payable in cash or shares of the Company’s common stock at the option of the board of directors of the Company) and are cumulative.

In certain circumstances, the shares of

the Series D Preferred Stock may be convertible into an aggregate of approximately 1,378,000 shares of the Company’s common stock,

subject to certain adjustments and provided that such adjustments do not result in the Company issuing more than approximately 2,703,000

In certain circumstances, the shares of the Series D

Preferred Stock may be convertible into an aggregate of approximately 1,378,000 shares of the Company’s common stock, subject to

certain adjustments and provided that such adjustments do not result in the Company issuing more than approximately 2,703,000

shares of common stock without obtaining prior shareholder approval;

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dividends of $ 399 .

Earnings Per Common Share

Basic earnings per share was computed by dividing net income available to common shareholders by the weighted average number of common shares

Loss Per Common Share

Basic loss per share was computed by dividing net loss available to common shareholders by the weighted average number of common shares

outstanding during the period.

The computation of diluted earnings per share reflected the effect of potentially dilutive securities.

A reconciliation of the numerator and denominator of the income per common share calculations is as follows:

The computation of diluted loss per share reflected the effect of potentially dilutive securities.

A reconciliation of the numerator and denominator of the loss per common share calculations is as follows:

For the Year Ended December 31, 2024

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(In thousands)

Basic and Diluted Earnings Per Common Share

Net income before preferred stock dividends

Basic and Diluted Loss Per Common Share

Net loss before preferred stock dividends

Less preferred stock dividends

Net income applicable to common shareholders

Net loss applicable to common shareholders

The assumed conversion of the Company’s Series D Preferred Stock was excluded from the earnings per common share calculation for 2024 and 2023

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subsidiaries are subject to certain limitations without the prior approval of the applicable state’s Insurance Commissioner.

The Parent received dividends of $ 8,400 and $ 7,200 in the years ended 2023 and 2022, respectively, from its

subsidiaries.

In 2024, dividend payments to the Parent by the insurance subsidiaries in excess of $ 8,757 would require prior approval.

The Parent received dividends of $ 9,000 and $ 8,400 in the years ended 2024 and 2023, respectively, from its subsidiaries.

dividend payments to the Parent by the insurance subsidiaries in excess of $ 6,347 would require prior approval.

Related Party Transactions

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These transactions include the leasing of office space, certain investing and financing activities, as well as inconsequential administrative and consulting services.

At December 31, 2023, two members of the Company’s board of directors, including the Company’s Chairman, President and Chief Executive Officer, were considered to be affiliates of the majority shareholder.

At December 31, 2024, two members of the Company’s board of directors, including the Company’s Chairman, President and Chief Executive Officer, were considered to be affiliates of the majority

The Company leases approximately 49,586

square feet of office and covered garage space from one such controlled entity.

During the years ended December 31, 2023 and 2022, the Company paid $ 1,199

and $ 880 , respectively, under this lease.

In December 2022, Delta Life Insurance Company, the owner of the building, transferred

title to the building to 4370 Peachtree LLC.

Each of Delta Life Insurance Company and 4370 Peachtree LLC is controlled by an affiliate of the Company.

square feet of office and covered garage space from one such controlled entity, 4370 Peachtree LLC.

During the years ended December 31, 2024 and 2023, the Company paid $ 1,153 and $ 1,199 , respectively, under this lease.

On December 26, 2024, the Company and its subsidiary, Bankers Fidelity Life Insurance Company, entered into a Second Amendment to

Lease Agreement (the “Second Amendment”) with 4370 Peachtree LLC.

The Second Amendment amends the Lease Agreement, dated November 1, 2007, by and among the same parties (as previously amended, the “Lease Agreement”), pursuant to which the

Company leases space for its principal offices and for some of its insurance operations in an office building located in Atlanta, Georgia.

Pursuant to the Second Amendment, the Lease Agreement was modified to increase the base rent payable by

the Company, beginning January 1, 2025.

The Second Amendment also provides for rent adjustment on January 1, 2027, January 1, 2030 and each five years thereafter.

Certain financing for the Company has also been provided by this entity in the form of an investment in the Series D Preferred Stock (See Note

During the years ended December 31, 2024 and 2023, the Company paid this entity $ 399 in dividends on the Series D Preferred

Certain members of the Company’s management and board of directors are shareholders and on the board of directors of Gray Television, Inc.

As of December 31, 2023 and 2022, the Company owned 880,272 shares of Gray Class A common stock and 106,000 shares of Gray common stock.

The aggregate carrying value of these investments in Gray at December 31, 2023 and 2022 was $ 8,490 and $ 10,772 , respectively.

In each of the years ended December 31, 2023 and 2022, Gray paid the Company approximately $ 2,050 and $ 1,708 in insurance premiums related to certain voluntary employee

benefit plans.

Certain members of the Company’s management and board of directors are shareholders and on the board of directors of Gray Media, Inc., formerly

Gray Television, Inc.

As of December 31, 2024 and 2023, the Company owned 880,272 shares of Gray Class A common stock

and 106,000 shares of Gray common stock.

The aggregate carrying value of these investments in Gray at December 31, 2024 and 2023

was $ 6,751 and $ 8,490 ,

respectively.

In each of the years ended December 31, 2024 and 2023, Gray paid the Company approximately $ 2,173 and $ 2,050 in insurance premiums related to certain

voluntary employee benefit plans.

Segment Information

The Parent’s primary insurance subsidiaries operate with relative autonomy and each company is evaluated based on its individual performance.

The Parent’s primary insurance subsidiaries operate with relative autonomy and each company is evaluated based

on its individual performance.

American Southern operates in the property and casualty insurance market, while Bankers Fidelity operates in the life and health insurance market.

Each segment derives revenue from the collection of premiums, as well as from investment income.

Substantially all revenue other than that in the corporate and other segment is from external sources.

Each segment derives revenue from the collection of premiums, as

well as from investment income.

The Company’s strategy is to focus on well-defined geographic, demographic and/or product niches within the insurance marketplace.

Substantially all revenue other than that in the corporate and other segment is

from external sources.

The Company adopted ASU No.

2023-07, Segment Reporting- An Amendment for Improvements to Reportable Segment

Disclosures (Topic 280) in December 2024.

The most significant provision was for the Company to disclose significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”).

Our CODM is the Company’s

Chairman, President and Chief Executive Officer.

The segment’s most significant expenses include insurance benefits and losses incurred and other expenses, such as commissions and underwriting.

Interest expense at the segment level is

insignificant.

To assess proﬁtability on a reportable segment basis, the CODM reviews income (loss) before income taxes.

For the Year Ended December 31, 2024

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Subsequent Events

On April 1, 2024 , the Company announced that the board of directors declared an annual cash dividend of $ 0.02 per share of common stock that is payable to shareholders of record at the close of business on April 12, 2024 .

On March 22, 2024, the Company entered into a First Amendment (the "Amendment") to its Revolving Credit Agreement (as

amended, the “Credit Agreement”) with Truist Bank as the lender (the “Lender”).

The Amendment, among other things, (a) updates the interest rate provisions to memorialize that the Company pays interest on the unpaid principal balance of

outstanding revolving loans at the Adjusted Term SOFR rate (as defined in the Credit Agreement), plus 2.00 %, (b) extends the

maturity date of the revolving credit facility to March 22, 2027 and (c) requires that the Company maintain a consolidated net

worth of not less than $ 64.2 million.

Except as modified by the Amendment, the existing terms of the Credit Agreement remain in

On February 21, 2024, a third-party service provider the Company utilizes for certain medical network claims data

identified a cybersecurity incident, resulting in disruption of services.

In response to the incident the Company examined our data and systems thoroughly and has not detected any breach of our systems.

Subsequent to the incident, the

Company transitioned to an alternative service provider as a permanent solution.

We do not believe the cybersecurity incident at our third-party service provider materially affected or is reasonably likely to materially affect the Company

or our business strategy, results of operations, or financial condition.

On March 25, 2025 , the Company announced that the board of directors declared an annual cash dividend of $ 0.02

per share of common stock that is payable to shareholders of record at the close of business on April 9, 2025 .

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data