Atlantic American(AAME) - 2019 Q1 - Quarterly Report

Revenue and Income - Total revenue for the three-month period ended March 31, 2019, was $55.0 million, an increase of $14.5 million or 35.8% compared to $40.5 million for the same period in 2018[87]. - Net income for the three-month period ended March 31, 2019, was $4.2 million, or $0.19 per diluted share, compared to a net loss of $5.0 million, or a loss of $0.25 per diluted share, for the same period in 2018[90]. Insurance Premiums - Insurance premiums increased by $2.6 million, or 6.1%, to $44.8 million, primarily due to growth in the Medicare supplement business[90]. - American Southern's gross written premiums increased by $0.9 million, or 12.5%, to $7.7 million, driven by increased writings in the automobile physical damage line[94]. - Bankers Fidelity's gross earned premiums rose by $5.2 million, or 13.2%, to $48.5 million, mainly due to successful new business strategies[100]. - Ceded premiums at Bankers Fidelity increased by $3.7 million, or 26.6%, due to a significant rise in Medicare supplement premiums subject to reinsurance[100]. - Net earned premiums at American Southern increased by $1.1 million, or 8.6%, to $13.8 million, attributed to growth in automobile physical damage coverage[96]. Underwriting and Loss Ratios - The loss ratio for Bankers Fidelity was 84.8% for the three-month period ended March 31, 2019, compared to 81.4% for the same period in 2018, reflecting unfavorable loss experience in the Medicare supplement line[101]. - Underwriting expenses at American Southern increased by $0.8 million, or 24.3%, to $4.2 million, with an expense ratio of 30.5% compared to 26.7% in the prior year[99]. - The combined ratio for Bankers Fidelity was 112.6% for the three-month period ended March 31, 2019, indicating an underwriting loss compared to 110.7% in the same period of 2018[100]. Investment Income - Investment income decreased slightly during Q1 2019 compared to Q1 2018, primarily due to a loss from equity in earnings from real estate partnerships[104]. - The Company reported net realized investment gains of $1.4 million in Q1 2019, up from $0.4 million in Q1 2018, mainly from the sale of equity securities[105]. - Net unrealized gains on equity securities held were $6.5 million in Q1 2019, compared to unrealized losses of $4.4 million in Q1 2018[106]. Expenses and Cash Flow - Interest expense increased by $0.1 million, or 18.2%, in Q1 2019 due to rising LIBOR rates affecting junior subordinated debentures[107]. - Other expenses rose by $0.6 million, or 4.7%, in Q1 2019, but as a percentage of earned premiums, they decreased to 31.0% from 31.4% in Q1 2018[108]. - Cash and cash equivalents decreased from $12.6 million at December 31, 2018 to $8.6 million at March 31, 2019, primarily due to net cash used in operating activities of $6.9 million[117]. Shareholder Information - The Company has a repurchase plan allowing for the buyback of up to 750,000 shares of common stock, with 17,865 shares repurchased in Q1 2019[123][125]. - At March 31, 2019, the Company had accrued but unpaid dividends on Series D Preferred Stock totaling $0.1 million[116]. Statutory Loss - The Parent's insurance subsidiaries reported a statutory net loss of $0.7 million for Q1 2019, compared to a loss of $0.5 million in Q1 2018[111].