ATLANTIC AMERICAN CORP

Previous wording

The following is management’s discussion and analysis of the financial condition and results of operations of Atlantic American Corporation (“Atlantic American” or the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”) as of and for three month period ended March 31, 2025. This discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere herein, as well as with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”).

Current wording

The following is management’s discussion and analysis of the financial condition and results of operations of Atlantic American Corporation (“Atlantic American” or the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”) as of and for the three month and six month periods ended June 30, 2025. This discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere herein, as well as with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”).

Previous wording

The following presents the Company’s revenue, expenses and net income (loss) for the three month period ended March 31, 2025 and the comparable period in 2024:

Current wording

The following presents the Company’s revenue, expenses and net income (loss) for the three month and six month periods ended June 30, 2025 and the comparable periods in 2024:

Previous wording

A reconciliation of net income (loss) to operating income (loss) for the three month period ended March 31, 2025 and the comparable period in 2024 is as follows:

Current wording

A reconciliation of net income (loss) to operating income (loss) for the three month and six month periods ended June 30, 2025 and the comparable periods in 2024 is as follows:

Previous wording

On a consolidated basis, the Company had net income of $0.8 million, or $0.03 per diluted share, for the three month period ended March 31, 2025, compared to net loss of $2.0 million, or $(0.10) per diluted share, for the three month period ended March 31, 2024. The increase in net income for the first quarter of 2025 was primarily the result of an increase in premium revenue in the life and health operations coupled with favorable loss experience in the life and health operations.

Current wording

On a consolidated basis, the Company had net income of $3.3 million, or $0.15 per diluted share, for the three month period ended June 30, 2025, compared to net loss of $0.7 million, or $(0.04) per diluted share, for the three month period ended June 30, 2024. The Company had net income of $4.1 million, or $0.19 per diluted share, for the six month period ended June 30, 2025, compared to net loss of $2.7 million, or $(0.14) per diluted share, for the six month period ended June 30, 2024. The increase in net income for the three month and six month periods ended June 30, 2025 was primarily the result of increases in premium revenue within the inland marine line of business in the property and casualty operations, as well as increases in the Medicare supplement and group accident and health lines of business within the life and health operations. Also contributing to the increase in net income was an increase in unrealized gains on equity securities during the three month and six month periods ended June 30, 2025. Also contributing to the increase in net income for the three month and six month periods ended June 30, 2025 was favorable development in the Medicare supplement line of business in the life and health operations.

Previous wording

Operating income increased $2.7 million in the three month period ended March 31, 2025 from the three month period ended March 31, 2024. The increase in operating income was primarily due to an increase in premium revenue in the life and health operations coupled with favorable loss experience in the life and health operations.

Current wording

Operating income increased $2.7 million in the three month period ended June 30, 2025 from the three month period ended June 30, 2024. For the six month period ended June 30, 2025, operating income increased $5.4 million from the comparable period in 2024. The increase in operating income for the three month and six month periods ended June 30, 2025 was primarily the result of increases in premium revenue within the inland marine line of business in the property and casualty operations, as well as increases in the Medicare supplement and group accident and health lines of business within the life and health operations, as previously mentioned.

Previous wording

The following summarizes American Southern’s premiums, losses, expenses and underwriting ratios for the three month period ended March 31, 2025 and the comparable period in 2024:

Current wording

The following summarizes American Southern’s premiums, losses, expenses and underwriting ratios for the three month and six month periods ended June 30, 2025 and the comparable periods in 2024:

Previous wording

Gross written premiums at American Southern increased $0.9 million, or 10.2%, during the three month period ended March 31, 2025 from the comparable period in 2024. The increase in gross written premiums was primarily attributable to the increase in premiums written in inland marine within the other lines of business due to a new program written by an existing agency. Also contributing to the increase in gross written premiums was an increase in the automobile physical damage line of business resulting from increased writings from existing agencies. Partially offsetting the increase in gross written premiums was a decrease in premiums written in the automobile liability line of business resulting from retrospective premium adjustments.

Current wording

Gross written premiums at American Southern increased $15.8 million, or 43.3%, during the three month period ended June 30, 2025 and $16.7 million, or 37.0%, during the six month period ended June 30, 2025, from the comparable periods in 2024. The increase in gross written premiums during the three month and six month periods ended June 30, 2025 was primarily attributable to an increase in premiums written in the automobile liability line of business due to the renewal of a program, which included a rate increase. Also contributing to the increase in gross written premiums were increases in premiums written in the inland marine line of business due to a new program written by an existing agency, as well as an increase in premiums written in the automobile physical damage line of business resulting from an increase in writings from existing agents.

Previous wording

Ceded premiums increased $0.1 million, or 9.1%, during the three month period ended March 31, 2025 from the comparable period in 2024. American Southern’s ceded premiums are typically determined as a percentage of earned premiums and generally fluctuate as earned premiums increase or decrease or retention levels change.

Current wording

Ceded premiums remained constant during the three month period ended June 30, 2025 and increased $0.1 million, or 4.0%, during the six month period ended June 30, 2025, from the comparable periods in 2024. American Southern’s ceded premiums are typically determined as a percentage of earned premiums and generally fluctuate as earned premiums subject to reinsurance increase or decrease or retentions levels change.

Previous wording

The following presents American Southern’s net earned premiums by line of business for the three month period ended March 31, 2025 and the comparable period in 2024:

Current wording

The following presents American Southern’s net earned premiums by line of business for the three month and six month periods ended June 30, 2025 and the comparable periods in 2024:

Previous wording

Net earned premiums increased $0.5 million, or 2.5%, during the three month period ended March 31, 2025 over the comparable period in 2024. The increase in net earned premiums was primarily attributable to an increase in earned premiums in inland marine within the other lines of business and the automobile physical damage line of business. Partially offsetting the increase in net earned premiums was a decrease in earned premiums in the automobile liability line of business resulting from the nonrenewal of one program and retrospective premiums adjustments. Premiums are earned ratably over their respective policy terms, and therefore premiums earned in the current year are related to policies written during both the current year and immediately preceding year.

Current wording

Net earned premiums increased $3.6 million, or 20.5%, during the three month period ended June 30, 2025, and $4.1 million, or 11.4%, during the six month period ended June 30, 2025, over the comparable periods in 2024. The increase in net earned premiums during the three month period ended June 30, 2025 was mainly due to increases in earned premiums in the inland marine line of business, as well as the earning out of premium within the automobile liability line of business. The increase in net earned premiums during the six month period ended June 30, 2025 was primarily attributable to increases in earned premiums in the inland marine line of business, as well as the automobile physical damage line of business, due to increases in premium writings, as previously mentioned. Premiums are earned ratably over their respective policy terms, and therefore premiums earned in the current year are related to policies written during both the current year and immediately preceding year.

Previous wording

Insurance benefits and losses incurred at American Southern increased $1.8 million, or 13.9%, during the three month period ended March 31, 2025 over the comparable period in 2024. As a percentage of earned premiums, insurance benefits and losses incurred were 79.6% in the three month period ended March 31, 2025, compared to 71.7% in the three month period ended March 31, 2024. The increase in the loss ratio during the three month period ended March 31, 2025 was primarily due to an increase in losses in the automobile physical damage and other lines of business. Also contributing to the increase in the loss ratio was an increase in loss adjustment expenses related to an increase in claims costs. Partially offsetting the increase was a decrease in the frequency of claims in the automobile liability line of business.

Current wording

Insurance benefits and losses incurred at American Southern increased $1.8 million, or 12.5%, during the three month period ended June 30, 2025, and $3.6 million, or 13.2%, during the six month period ended June 30, 2025, over the comparable periods in 2024. As a percentage of earned premiums, insurance benefits and losses incurred were 75.7% in the three month period ended June 30, 2025, compared to 81.1% in the three month period ended June 30, 2024. For the six month period ended June 30, 2025, this ratio increased to 77.5% from 76.3% in the comparable period in 2024. The decrease in the loss ratio during the three month period ended June 30, 2025 was due to an increase in premium growth exceeding the increase in insurance benefits and losses incurred. The increase in the loss ratio during the six month period ended June 30, 2025 was mainly due to an increase in losses within the automobile physical damage line of business and the inland marine line of business.

Previous wording

Commissions and underwriting expenses decreased $0.4 million, or 8.8%, during the three month period ended March 31, 2025, over the comparable period in 2024. As a percentage of earned premiums, underwriting expenses were 22.6% in the three month period ended March 31, 2025, compared to 25.4% in the three month period ended March 31, 2024. The decrease in the expense ratio during the three month period ended March 31, 2025 was primarily due to American Southern’s use of a variable commission structure with certain agents, which compensates the participating agents in relation to the loss ratios of the business they write. During periods in which the loss ratio decreases, commissions and underwriting expenses will generally increase, and conversely, during periods in which the loss ratio increases, commissions and underwriting expenses will generally decrease. During the three month period ended March 31, 2025, variable commissions at American Southern decreased by $0.5 million from the comparable period in 2024 due to an unfavorable loss experience from accounts subject to variable commissions.

Current wording

Commissions and underwriting expenses increased $1.8 million, or 50.7%, during the three month period ended June 30, 2025, and $1.4 million, or 17.3% during the six month period ended June 30, 2025, over the comparable periods in 2024. As a percentage of earned premiums, underwriting expenses were 25.3% in the three month period ended June 30, 2025, compared to 20.2% in the three month period ended June 30, 2024. For the six month period ended June 30, 2025, this ratio increased to 24.0% from 22.8% in the comparable period in 2024. The increase in the expense ratio during the three month and six month periods ended June 30, 2025 was primarily due to American Southern’s use of a variable commission structure with certain agents, which compensates the participating agents in relation to the loss ratios of the business they write. During periods in which the loss ratio decreases, commissions and underwriting expenses will generally increase, and conversely, during periods in which the loss ratio increases, commissions and underwriting expenses will generally decrease. During the three month and six month periods ended June 30, 2025, variable commissions at American Southern increased by $1.2 million and $0.7 million, respectively, from the comparable periods in 2024 due to favorable loss experience from accounts subject to variable commissions.

Previous wording

The following summarizes Bankers Fidelity’s earned premiums, losses, expenses and underwriting ratios for the three month period ended March 31, 2025 and the comparable period in 2024:

Current wording

The following summarizes Bankers Fidelity’s earned premiums, losses, expenses and underwriting ratios for the three month and six month periods ended June 30, 2025 and the comparable periods in 2024:

Previous wording

Gross earned premiums at Bankers Fidelity increased $2.8 million, or 7.1%, during the three month period ended March 31, 2025, from the comparable period in 2024. The increase in gross earned premiums was primarily attributable to the increase in gross earned premiums from the Medicare supplement line of business due primarily to the level of new business writings exceeding non-renewals. Also contributing to the increase in gross earned premiums was an increase in gross earned premiums in the group accident and health line of business.

Current wording

Gross earned premiums increased $3.2 million, or 7.9%, during the three month period ended June 30, 2025, and $6.1 million, or 7.5%, during the six month period ended June 30, 2025, from the comparable periods in 2024. The increase in gross earned premiums was primarily attributable to the increase in gross earned premiums from the Medicare supplement line of business due primarily to the level of new business writings exceeding non-renewals, partially offset by lapses within the same line of business. Also contributing to the increase in gross earned premiums was an increase in gross earned premiums in the group accident and health line of business, resulting from new business sales.

Previous wording

Ceded premiums increased $0.9 million, or 7.1%, during the three month period ended March 31, 2025, from the comparable period in 2024. The increase in ceded premiums was due to an increase in Medicare supplement premiums subject to reinsurance.

Current wording

Ceded premiums increased $1.7 million, or 12.7%, during the three month period ended June 30, 2025, and $2.6 million, or 9.9%, during the six month period ended June 30, 2025, from the comparable periods in 2024. The increase in ceded premiums was due to an increase in Medicare supplement premiums subject to reinsurance.

Previous wording

Net earned premium revenue at Bankers Fidelity increased $1.9 million, or 7.2%, during the three month period ended March 31, 2025, from the comparable period in 2024. The increase in net earned premiums was primarily attributable to increases in the group accident and health, other individual health and Medicare supplement lines of business due to new sales as previously mentioned.

Current wording

Net earned premium increased $1.6 million, or 5.7%, during the three month period ended June 30, 2025, and $3.5 million, or 6.4%, during the six month period ended June 30, 2025, over the comparable periods in 2024. The increase in net earned premiums was primarily attributable to increases in the Medicare supplement and group accident and health lines of business due to new sales as previously mentioned. Also contributing to the increase in net earned premiums was an increase in the other individual accident and health line of business due to new business growth.

Previous wording

Insurance benefits and losses incurred decreased $1.8 million, or 9.4%, during the three month period ended March 31, 2025, from the comparable period in 2024. As a percentage of earned premiums, insurance benefits and losses incurred were 60.6% in the three month period ended March 31, 2025, compared to 71.7% in the three month period ended March 31, 2024. The decrease in the loss ratio for the three month period ended March 31, 2025 was primarily due to lower utilization in the Medicare supplement line of business. Partially offsetting this decrease was an increase in incurred losses in the individual life and other individual accident and health lines of business.

Current wording

Insurance benefits and losses incurred increased $0.1 million, or 0.3%, during the three month period ended June 30, 2025, and decreased $1.7 million, or 4.7%, during the six month period ended June 30, 2025, from the comparable periods in 2024. As a percentage of earned premiums, benefits and losses were 60.8% in the three month period ended June 30, 2025, compared to 64.0% in the three month period ended June 30, 2024. For the six month period ended June 30, 2025, this ratio decreased to 60.7% from 67.8% in the comparable period in 2024. The decrease in the loss ratio for the three month and six month periods ended June 30, 2025 was primarily due to lower utilization within the Medicare supplement line of business.

Previous wording

Commissions and underwriting expenses increased $0.4 million, or 3.9%, during the three month period ended March 31, 2025, over the comparable period in 2024. As a percentage of earned premiums, underwriting expenses were 37.6% in the three month period ended March 31, 2025, compared to 38.8% in the three month period ended March 31, 2024. The decrease in the expense ratio was primarily due to an increase in earned premiums in the Medicare supplement, group life and group accident and health lines of business.

Current wording

Commissions and underwriting expenses decreased $0.8 million, or 8.1%, during the three month period ended June 30, 2025, and $0.4 million, or 2.1%, during the six month period ended June 30, 2025, over the comparable periods in 2024. As a percentage of earned premiums, underwriting expenses were 33.1% in the three month period ended June 30, 2025, compared to 38.0% in the three month period ended June 30, 2024. For the six month period ended June 30, 2025, this ratio decreased to 35.3% from 38.4% in the comparable period in 2024. The decrease in the expense ratio for the three month and six month periods ended June 30, 2025 was mainly due to growth in premiums coupled with a decline in underwriting expenses, primarily from lower variable expenses related to the group lines of business.

Previous wording

Net Investment Income and Realized Gains (Losses)

Current wording

Net Investment Income and Realized Gains

Previous wording

Investment income decreased $0.1 million, or 4.5%, during the three month period ended March 31, 2025, from the comparable period in 2024. The decrease in investment income was primarily attributable to a decrease in the equity in earnings from investments in the Company’s limited partnerships and limited liability companies of $0.1 million.

Current wording

Investment income increased $0.1 million, or 4.1%, during the three month period ended June 30, 2025, and remained constant during the six month period ended June 30, 2025, over the comparable periods in 2024. The increase in investment income in the three month period ended June 30, 2025, from the comparable periods in 2024, was primarily attributable to an increase in the equity in earnings from investments in the Company’s limited partnerships and limited liability companies.

Previous wording

The Company had no net realized investment gains during each of the three month periods ended March 31, 2025 and 2024. Management continually evaluates the Company’s investment portfolio and, as may be determined to be appropriate, makes adjustments for impairments and/or will divest investments. See Note 3 of Notes to Condensed Consolidated Financial Statements.

Current wording

The Company had net realized investment gains of less than $0.1 million during each of the three month and six month periods ended June 30, 2025, compared to net realized investment gains of less than $0.1 million during each of the three month and six month periods ended June 30, 2024. The net realized investment gains during the three month and six month periods ended June 30, 2025 was due to the sale and redemption of several of the Company’s investments in fixed maturity securities. The net realized investment gains during the three month and six month periods ended June 30, 2024 resulted primarily from the redemption of several of the Company’s investments in fixed maturity securities. Management continually evaluates the Company’s investment portfolio and makes adjustments for credit losses and/or divests investments as may be determined to be appropriate.

Previous wording

Investments in equity securities are measured at fair value at the end of the reporting period, with any changes in fair value reported in net income during the period. The Company recognized net unrealized gains on equity securities of $0.8 million during the three month period ended March 31, 2025 and unrealized losses on equity securities of $0.1 million during the three month period ended March 31, 2024. Changes in unrealized gains (losses) on equity securities for the applicable periods are primarily the result of fluctuations in the market value of certain of the Company’s equity securities.

Current wording

Investments in equity securities are measured at fair value at the end of the reporting period, with any changes in fair value reported in net income during the period. The Company recognized net unrealized gains on equity securities of $2.6 million during the three month period ended June 30, 2025 and unrealized gains on equity securities of $0.2 million during the three month period ended June 30, 2024. The Company recognized net unrealized gains on equity securities of $3.4 million during the six month period ended June 30, 2025 and unrealized gains on equity securities of $0.1 million during the six month period ended June 30, 2024. Changes in unrealized gains on equity securities for the applicable periods are the result of fluctuations in the market value of the Company’s equity securities.

Previous wording

Interest expense decreased $0.1 million, or 9.5%, during the three month period ended March 31, 2025, from the comparable period in 2024. Changes in interest expense were primarily due to changes in the Secured Overnight Financing Rate (“SOFR”) published by CME Group Benchmark Administration Limited, as the interest rates on the Company’s outstanding junior subordinated deferrable interest debentures (“Junior Subordinated Debentures”) and the revolving credit facility utilize SOFR as the reference rate.

Current wording

Interest expense decreased $0.1 million, or 10.8%, during the three month period ended June 30, 2025, and $0.2 million, or 10.2%, during the six month period ended June 30, 2025, from the comparable periods in 2024. Changes in interest expense were primarily due to changes in the Secured Overnight Financing Rate (“SOFR”) published by CME Group Benchmark Administration Limited, as the interest rates on the Company’s outstanding junior subordinated deferrable interest debentures (“Junior Subordinated Debentures”) and the revolving credit facility utilize SOFR as the reference rate.

Previous wording

Cash flows at the Parent are derived from dividends, management fees, and tax-sharing payments, as described below, from the subsidiaries. The principal cash needs of the Parent are for the payment of operating expenses, the acquisition of capital assets and debt service requirements, as well as the repurchase of shares and payments of any dividends as may be authorized and approved by the Company’s board of directors from time to time. At March 31, 2025, the Parent had approximately $3.5 million of unrestricted cash and investments.

Current wording

Cash flows at the Parent are derived from dividends, management fees, and tax-sharing payments, as described below, from the subsidiaries. The principal cash needs of the Parent are for the payment of operating expenses, the acquisition of capital assets and debt service requirements, as well as the repurchase of shares and payments of any dividends as may be authorized and approved by the Company’s board of directors from time to time. At June 30, 2025, the Parent had approximately $4.4 million of unrestricted cash and investments.

Previous wording

The Parent’s insurance subsidiaries reported statutory net income of $4.3 million for the three month period ended March 31, 2025, compared to statutory net income of $1.6 million for the three month period ended March 31, 2024. Statutory results are impacted by the recognition of all costs of acquiring business. In periods in which the Company’s first year premiums increase, statutory results are generally lower than results determined under GAAP. Statutory results for the Company’s property and casualty operations may differ from the Company’s results of operations under GAAP due to the deferral of acquisition costs for financial reporting purposes. The Company’s life and health operations’ statutory results may differ from GAAP results primarily due to the deferral of acquisition costs for financial reporting purposes, as well as the use of different reserving methods.

Current wording

The Parent’s insurance subsidiaries reported statutory net income of $4.7 million for the six month period ended June 30, 2025, compared to statutory net loss of $0.4 million for the six month period ended June 30, 2024. Statutory results are impacted by the recognition of all costs of acquiring business. In periods in which the Company’s first year premiums increase, statutory results are generally lower than results determined under GAAP. Statutory results for the Company’s property and casualty operations may differ from the Company’s results of operations under GAAP due to the deferral of acquisition costs for financial reporting purposes. The Company’s life and health operations’ statutory results may differ from GAAP results primarily due to the deferral of acquisition costs for financial reporting purposes, as well as the use of different reserving methods.

Previous wording

Over 90% of the invested assets of the Parent’s insurance subsidiaries are invested in marketable securities that can be converted into cash, if required; however, the use of such assets by the Company is limited by state insurance regulations. Dividend payments to a parent corporation by its wholly owned insurance subsidiaries are subject to annual limitations and are restricted to 10% of statutory surplus or statutory earnings before recognizing realized investment gains of the individual insurance subsidiaries. At March 31, 2025, American Southern had $47.6 million of statutory capital and surplus and Bankers Fidelity had $33.5 million of statutory capital and surplus. In 2025, dividend payments by the Parent’s insurance subsidiaries in excess of $6.3 million would require prior approval. Through March 31, 2025, the Parent received dividends of $2.1 million from its subsidiaries.

Current wording

Over 90% of the invested assets of the Parent’s insurance subsidiaries are invested in marketable securities that can be converted into cash, if required; however, the use of such assets by the Company is limited by state insurance regulations. Dividend payments to a parent corporation by its wholly owned insurance subsidiaries are subject to annual limitations and are restricted to 10% of statutory surplus or statutory earnings before recognizing realized investment gains of the individual insurance subsidiaries. At June 30, 2025, American Southern had $47.2 million of statutory capital and surplus and Bankers Fidelity had $34.6 million of statutory capital and surplus. In 2025, dividend payments by the Parent’s insurance subsidiaries in excess of $6.3 million would require prior approval. Through June 30, 2025, the Parent received dividends of $4.2 million from its subsidiaries.

Previous wording

At March 31, 2025, the Company had 55,000 shares of Series D preferred stock (“Series D Preferred Stock”) outstanding. All of the shares of Series D Preferred Stock are held by an affiliate of the Company’s controlling shareholder. The outstanding shares of Series D Preferred Stock have a stated value of $100 per share; 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 shares of common stock without obtaining prior shareholder approval; and are redeemable solely at the Company’s option. The Series D Preferred Stock is not currently convertible. At March 31, 2025, the Company had accrued but unpaid dividends on the Series D Preferred Stock totaling $0.1 million.

Current wording

At June 30, 2025, the Company had 55,000 shares of Series D preferred stock (“Series D Preferred Stock”) outstanding. All of the shares of Series D Preferred Stock are held by an affiliate of the Company’s controlling shareholder. The outstanding shares of Series D Preferred Stock have a stated value of $100 per share; 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 shares of common stock without obtaining prior shareholder approval; and are redeemable solely at the Company’s option. The Series D Preferred Stock is not currently convertible. At June 30, 2025, the Company had accrued but unpaid dividends on the Series D Preferred Stock totaling $0.2 million.

Previous wording

Bankers Fidelity Life Insurance Company (‘‘BFLIC”) is a member of the Federal Home Loan Bank of Atlanta (“FHLB”), for the primary purpose of enhancing financial flexibility. As a member, BFLIC can obtain access to low-cost funding and also receive dividends on FHLB stock. The membership arrangement provides for credit availability of five percent of statutory admitted assets, or approximately $8.4 million, as of March 31, 2025. Additional FHLB stock purchases may be required based upon the amount of funds borrowed from the FHLB. As of March 31, 2025, BFLIC has pledged bonds having an amortized cost of $9.1 million to the FHLB. BFLIC may be required to post additional acceptable forms of collateral for any borrowings that it makes in the future from the FHLB. As of March 31, 2025, BFLIC does not have any outstanding borrowings from the FHLB.

Current wording

Bankers Fidelity Life Insurance Company (‘‘BFLIC”) is a member of the Federal Home Loan Bank of Atlanta (“FHLB”), for the primary purpose of enhancing financial flexibility. As a member, BFLIC can obtain access to low-cost funding and also receive dividends on FHLB stock. The membership arrangement provides for credit availability of five percent of statutory admitted assets, or approximately $8.8 million, as of June 30, 2025. Additional FHLB stock purchases may be required based upon the amount of funds borrowed from the FHLB. As of June 30, 2025, BFLIC has pledged bonds having an amortized cost of $9.0 million to the FHLB. BFLIC may be required to post additional acceptable forms of collateral for any borrowings that it makes in the future from the FHLB. As of June 30, 2025, BFLIC does not have any outstanding borrowings from the FHLB.

Previous wording

Cash and cash equivalents increased from $35.6 million at December 31, 2024 to $35.9 million at March 31, 2025. The increase in cash and cash equivalents during the three month period ended March 31, 2025 was primarily attributable to net cash provided by investing activities of $1.1 million primarily as a result of investment sales and maturity of securities exceeding investment purchases. Partially offsetting the increase in cash and cash equivalents was net cash used in operating activities of $0.7 million.

Current wording

Cash and cash equivalents increased from $35.6 million at December 31, 2024 to $46.4 million at June 30, 2025. The increase in cash and cash equivalents during the six month period ended June 30, 2025 was primarily attributable to net cash provided by operating activities of $8.6 million. Also contributing to the increase in cash and cash equivalents was net cash provided by investing activities of $2.7 million primarily as a result of investment sales and maturity of securities exceeding investment purchases.