-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, FMZUgLy9b+QH0SNWWXEceE7C4ZzhRqVWBfFAX4st8hf5ai4fgVo8LxGlV3cG5Gwg q2r7z8iDyObS/exb2IYmyQ== 0000780118-95-000002.txt : 19950607 0000780118-95-000002.hdr.sgml : 19950607 ACCESSION NUMBER: 0000780118-95-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMWEST INSURANCE GROUP INC CENTRAL INDEX KEY: 0000780118 STANDARD INDUSTRIAL CLASSIFICATION: 6351 IRS NUMBER: 952672141 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09580 FILM NUMBER: 95539638 BUSINESS ADDRESS: STREET 1: 6320 CANOGA AVE STE 300 CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 8187041111 MAIL ADDRESS: STREET 1: 6320 CANOGA AVENUE SUITE 300 STREET 2: PO BOX 4500 CITY: WOODLAND HILLS STATE: CA ZIP: 91367 EX-27 1 FDS --
7 1,000 U.S. DOLLARS 3-MOS DEC-31-1995 JAN-1-1995 MAR-31-1995 1 82,768 15,262 0 7,912 0 0 106,235 1,186 2,317 14,739 145,404 9,991 32,439 0 0 12,500 24 0 0 38,717 145,404 16,719 866 67 0 5,389 7,932 3,395 936 9 927 0 0 0 927 .39 .39 8,900 793 4,679 1,831 2,550 9,991 0
10-Q 2 FORM 10-Q QUARTERLY FILING FOR AIG UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission file number: 1-9580 AMWEST INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 95-2672141 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6320 Canoga Avenue, Suite 300 Woodland Hills, California 91367 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (818) 704-1111 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X. No _. As of May 15, 1995, 2,352,839 shares of common stock, $.01 par value, were outstanding. AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES INDEX Part I. FINANCIAL INFORMATION: Item 1 Consolidated Statements of Operations for the three months ended March 31, 1995 and 1994 3 Consolidated Balance Sheets as of March 31, 1995 and December 31, 1994 4 Consolidated Statements of Cash Flows for the three months ended March 31, 1995 and 1994 6 Notes to Interim Consolidated Financial Statements 8 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Part II. OTHER INFORMATION: Item 1 Legal Proceedings 13 Item 2 Changes in Securities 13 Item 3 Defaults Upon Senior Securities 13 Item 4 Submission of Matters to a Vote of Security Holders 13 Item 5 Other Information 13 Item 6 Exhibits and Reports on Form 8-K 13
PART I - FINANCIAL INFORMATION Item 1 AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In thousands, except per share data) Three months ended March 31, -------------------------------------- 1995 1994 ----------- ----------- Underwriting revenues: Premiums written $ 16,209 $ 15,223 Premiums ceded (1,251) (810) ----------- ----------- Net premiums written 14,958 14,413 Change in unearned premiums: Direct 1,251 (177) Ceded 510 (192) ----------- ----------- Net premiums earned 16,719 14,044 ----------- ----------- Underwriting expenses: Losses and loss adjustment expenses 5,444 2,436 Reinsurance (recoveries) refunds (55) 303 ----------- ----------- Net losses and loss adjustment expenses 5,389 2,739 Policy acquisition costs 7,932 6,996 General operating costs 3,395 3,270 ----------- ----------- Total underwriting expenses 16,716 13,005 ----------- ----------- Underwriting income 3 1,039 Interest expense (280) (174) Collateral interest expense (445) (491) Net investment income 1,591 1,271 Net realized investment gains (losses) 67 (104) ----------- ----------- Income before income taxes 936 1,541 ----------- ----------- Provision for income taxes: Current 248 228 Deferred (239) 179 ----------- ----------- Total provision for income taxes 9 407 ----------- ----------- Net income $ 927 $ 1,134 =========== =========== Earnings per common share: Net income $ 0.39 $ 0.47 =========== =========== Weighted average number of common shares outstanding 2,382 2,409
See accompanying notes to interim consolidated financial statements.
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) ASSETS March 31, December 31, 1995 1994 ----------- ----------- (unaudited) Investments: Fixedmaturities, at amortized cost (market value of $15,163 and $14,469 at March 31, 1995 and December 31, 1994, respectively) $ 15,262 $ 15,120 Fixedmaturities, at market value (amortized cost of $84,203 and $88,056 at March 31, 1995 and December 31, 1994, respectively) 82,768 84,503 Common equity securities, at market value (cost of $4,955 and $4,814 at March 31, 1995 and December 31, 1994, respectively) 6,059 5,300 Preferred equity securities, at market value (cost of $1,837 and $1,500 at March 31, 1995 and December 31, 1994, respectively) 1,853 1,417 Other invested assets 268 - Short-term investments 25 25 ----------- ----------- Total investments 106,235 106,365 Cash and cash equivalents 1,186 3,948 Accrued investment income 1,420 1,450 Agents balances and premiums receivable (less allowance for doubtful accounts of $375 at March 31, 1995 and December 31, 1994) 8,197 7,000 Reinsurance recoverable: Paid loss and loss adjustment expenses 1,167 1,352 Unpaid loss and loss adjustment expenses 1,150 1,267 Ceded unearned premiums 2,176 1,666 Deferred policy acquisition costs 14,739 15,250 Furniture, equipment and improvements, net 2,065 1,853 Other assets 7,069 6,562 ----------- ----------- Total assets $ 145,404 $ 146,713 =========== ===========
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (Dollars in thousands) LIABILITIES AND STOCKHOLDERS' EQUITY March 31, December 31, 1995 1994 ----------- ----------- (unaudited) Liabilities: Unpaid losses and loss adjustment expenses $ 9,991 $ 8,900 Unearned premiums 32,439 33,689 Funds held as collateral 43,982 46,926 Current Federal income taxes 173 313 Deferred Federal income taxes 2,959 2,014 Bank indebtedness 12,500 12,500 Amounts due to reinsurers 192 183 Other liabilities 4,427 6,194 ----------- ------------ Total liabilities 106,663 110,719 ----------- ------------ Stockholders' equity: Preferred stock, $.01 par value, 1,000,000 shares authorized; issued and outstanding: none - - Common stock, $.01 par value, 10,000,000 shares authorized, issued and outstanding: 2,350,589 at March 31, 1995 and 2,334,089 at December 31, 1994 24 24 Additional paid-in capital 9,390 9,221 Net unrealized appreciation (depreciation) of investments carried at market, net of income taxes (197) (2,080) Retained earnings 29,524 28,829 ----------- ------------ Total stockholders' equity 38,741 35,994 ----------- ------------ Total liabilities and stockholders' equity $ 145,404 $ 146,713 =========== ============
See accompanying notes to interim consolidated financial statements.
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands) Three months ended March 31, ----------------------------------- 1995 1994 -------- --------- Cash flows from operating activities: Net income $ 927 $ 1,134 Adjustments to reconcile net income to cash provided by operating activities: Change in agents' balances and premiums receivable and unearned premiums (2,447) (689) Change in accrued investment income 30 172 Change in unpaid losses and loss adjustment expenses 1,091 60 Change in reinsurance recoverable on paid and unpaid losses and loss adjustment expenses and ceded unearned premiums (208) 654 Change in amounts due to reinsurers 9 11 Change in reinsurance funds held, net - (1,259) Change in other assets and other liabilities (2,274) 552 Change in income taxes, net (165) 121 Change in deferred policy acquisition costs 511 (620) Net realized (gain) loss on sale of fixed maturities (80) (8) Net realized (gain) loss on sale of equity securities 13 37 Net realized loss on sale of fixed assets 4 - Provision for depreciation and amortization 303 367 --------- --------- Net cash provided (used) by operating activities (2,286) 532 Cash flows from investing activities: Cash received from investments sold, matured, called or repaid: Investments held-to-maturity 32 - Investments available-for-sale 10,559 23,832 Cash paid for investments acquired: Investments held-to-maturity - (149) Investments available-for-sale (6,895) (30,067) Amortization of discount on bonds (646) 257 Capital expenditures, net (519) (190) --------- ---------- Net cash provided (used) by investing activities 2,531 (6,317)
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands) Three months ended March 31, ----------------------------------- 1995 1994 --------- --------- Cash flows from financing activities: Proceeds from issuance of common stock 169 8 Amortization of bank indebtedness - - Change in funds held as collateral (2,944) 6,154 Dividends paid (232) (213) --------- --------- Net cash provided (used) by financing activities (3,007) 5,949 --------- --------- Net increase (decrease) in cash and cash equivalents (2,762) 164 Cash and cash equivalents at beginning of period 3,948 6,723 --------- --------- Cash and cash equivalents at end of period $ 1,186 $ 6,887 ========= ========= Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 725 $ 666 Income taxes 388 285 Cash received during the period on: Investments sold prior to maturity $ 10,559 $ 23,713 Investments held to maturity 32 119
See accompanying notes to interim consolidated financial statements. AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES Notes to Interim Consolidated Financial Statements (unaudited) (1) Basis of Presentation The interim consolidated financial statements presented herein are unaudited and, in the opinion of management, reflect all adjustments necessary for a fair presentation of results for such periods. All such adjustments are of a normal, recurring nature. The results of operations for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. (2) Reclassifications Certain reclassifications have been made from amounts reported in prior years in order to be consistent with the current year's presentation. Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Premiums written increased 7% from $15,223,000 for the three months ended March 31, 1994 to $16,209,000 for the three months ended March 31, 1995. The increase in premiums written is attributable to the contract performance product line. Net premiums earned increased 19% from $14,044,000 for the three months ended March 31, 1994 to $16,719,000 for the three months ended March 31, 1995. The larger increase in net premiums earned is reflective of the significant increase in written premiums during the last nine months of 1994. The Company generally earns premiums ratably over the assigned bond terms. Net losses and loss adjustment expenses increased 97% from $2,739,000 for the three months ended March 31, 1994 to $5,389,000 for the three months ended March 31, 1995. The loss ratio for the three months ended March 31, 1994 was 20% as compared to 32% for the three months ended March 31, 1995. The increase in the loss ratio is the result of increased loss severity in the contract performance product line. Policy acquisition costs decreased as a percentage of net premiums earned from 50%,or $6,996,000 for the three months ended March 31, 1994 to 47%, or $7,932,000 for the three months ended March 31, 1995. The decrease in the ratio reflects efficiencies in the Company's branch distribution system in servicing increased production, partially offset by higher commissions paid by the Company to its independent agents. General operating costs decreased as a percentage of net premiums earned from 23% (or $3,270,000) for the three months ended March 31, 1994 to 20% (or $3,395,000) for the three months ended March 31, 1995. The improvement in the general and administrative expense ratio is reflective of the Company's ability to service increased writings without corresponding increases in home office expenses. Underwriting income decreased from $1,039,000 for the three months ended March 31, 1994 to $3,000 for the three months ended March 31, 1995. The combined ratio was 93% for the three months ended March 31, 1994 as compared to 100% for the three months ended March 31, 1995, due to a combination of the factors cited above. Interest expense increased 61% from $174,000 for the three months ended March 31, 1994 to $280,000 for the three months ended March 31, 1995. This increase is attributable to an increase in the interest rate on the bank indebtedness to an average of 8.3% for the three months ended March 31, 1995 from an average rate of 5.6% for the three months ended March 31, 1994. Collateral interest expense decreased 9% from $491,000 for the three months ended March 31, 1994 to $445,000 for the three months ended March 31, 1995. Average funds held as collateral decreased from $47,467,000 for the three months ended March 31, 1994 to $45,454,000 for the three months ended March 31, 1995. Collateral rates are adjusted at various times throughout the year in accordance with general market conditions. Net investment income and realized investment gains (losses) increased 42% from $1,167,000 for the three months ended March 31, 1994 to $1,658,000 for the three months ended March 31, 1995. The increase is generally due to higher investment yields received due to general increases in interest rates during 1994. Net realized investment gains recognized increased from a loss of $104,000 for the three months ended March 31, 1994 to a gain of $67,000 for the three months ended March 31, 1995. The investments sold during the three months ended March 31, 1995 were primarily fixed income investments including mortgage-backed and municipal bond securities. Income before income taxes decreased from $1,541,000 for the three months ended March 31, 1994 to $936,000 for the three months ended March 31, 1995 due to the factors outlined above. The effective tax rate was 26% for the three months ended March 31, 1994 as compared to an effective rate of 1% for the three months ended March 31, 1995. The lower effective tax rate is primarily due to a higher proportion of the income before income taxes attributable to tax advantaged investments in 1995 versus 1994, as well as a reduction in the Company's deferred tax asset valuation allowance of $50,000. The reduction in the valuation allowance was made because of continuing favorable development regarding the Company's ability to retain the full tax benefits of the salvage and subrogation fresh start adjustment. Net income decreased from $1,134,000 for the three months ended March 31, 1994 to $927,000 for the three months ended March 31, 1995 due to the factors outlined above. Liquidity and Capital Resources As of March 31, 1995, the Company held total cash and cash equivalents and invested assets of $107,421,000. This amount includes an aggregate of $43,982,000 in funds held as collateral which is shown as a liability on the Company's consolidated balance sheets. As of March 31, 1995, the Company's invested assets consisted of $15,262000 in fixed maturities, held at amortized cost, $82,768,000 in fixed maturities, held at market value, $6,059,000 in common equity securities, $1,853,000 in preferred equity securities, $268,000 in other invested assets and $25,000 in short-term investments, including certificates of deposit with original maturities less than one year. Because the Company depends primarily on dividends from its insurance subsidiaries for its net cash flow requirements, absent other sources of cash flow, the Company cannot pay dividends materially in excess of the amount of dividends that could be paid by the insurance subsidiaries to the Company. The Company's insurance subsidiaries are subject to state regulations which restrict the amount of stockholder dividends which may be paid within any one year without the approval of the California Department of Insurance. The California Insurance Code provides that amounts may be paid as dividends on an annual noncumulative basis without prior approval up to a maximum of the greater of (1) statutory net income for the preceding year or (2) 10% of statutory surplus as regards policyholders as of the preceding December 31. On August 6, 1993, the Company entered into a revolving credit agreement with Union Bank for $12,500,000. The bank loan has a variable rate based upon fluctuations in the London Interbank Offered Rate (LIBOR) with amortizing principal payments beginning July 15, 1995 and maturing July 15, 1999. The annual interest rate at March 31, 1995 was 8.4%. On April 24, 1995, the debt agreement was amended to increase the amount available under the revolving line of credit from $12,500,000 to $15,000,000. The repayment schedule was also revised to extend the principal payments until the year 2000 from 1999. The first principal payment in the amount of $2,500,000 is still due on July 15, 1995. Certain changes were also made to the interest rate calculation as well as various financial convenants of the debt agreement which are not currently significant, but could ultimately result in a decrease in the margin paid on the revolving line of credit. The Company is a party to a lease with Trillium/Woodland Hills regarding its corporate headquarters. Such lease contains provisions for scheduled lease charges and escalations in base rent over the lease term. The Company's minimum lease commitment for the remainder of 1995 is approximately $1,408,000. This lease expires in July 1998. Other than the Company's obligations with respect to funds held as collateral and the Company's obligation to pay claims as they arise, the Company's commitments to pay principal and interest on the bank debt and the payment of lease expenses as noted above, the Company has no significant cash commitments. The Company believes that its cash flows from operations and other present sources of capital are sufficient to sustain its needs for at least the remainder of 1995. The Company generated $532,000 in cash from operating activities for the three months March 31, 1994 as compared to using $2,286,000 for the three months ended March 31, 1995. The Company used $6,317,000 in cash for investing activities for the three months ended March 31, 1994 as compared to generating $2,531,000 for the three months ended March 31, 1995. The Company generated $5,949,000 in cash from financing activities for the three months ended March 31, 1994 as compared to using $3,007,000 for the three months ended March 31, 1995. The table on the next page shows, for the periods indicated, the net premiums written, net premiums earned, net losses and loss adjustment expenses and loss ratios for the Company's five major types of bonds:
TABLE 1 AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES SUMMARY OF PREMIUMS AND LOSSES BY PRODUCT LINE (Dollars in thousands) Three months ended Year ended March 31, December 31, ---------------------------- -------------------------- Type of Bond 1995 1994 1994 1993 ------------ ---------- --------- --------- ---------- Contract performance Net premiums written $ 11,164 $ 9,595 $ 46,638 $ 35,503 Net premiums earned 12,556 9,290 41,937 31,744 Net losses and loss adjustment expenses 4,913 1,784 11,098 9,397 Loss ratio 39% 19% 27% 30% Court Net premiums written $ 1,992 $ 2,055 $ 9,531 $ 7,930 Net premiums earned 1,984 2,020 9,183 7,387 Net losses and loss adjustment expenses 19 525 1,114 218 Loss ratio 1% 26% 12% 3% Contractor's license Net premiums written $ 447 $ 534 $ 2,154 $ 1,722 Net premiums earned 488 431 1,833 1,680 Net losses and loss adjustment expenses 99 286 477 364 Loss ratio 20% 66% 26% 22% SBA Net premiums written $ 236 $ 182 $ 1,213 $ 1,796 Net premiums earned 309 405 1,416 1,938 Net losses and loss adjustment expenses 196 (21) 145 614 Loss ratio 63% (5%) 10% 32% Miscellaneous Net premiums written $ 1,119 $ 2,047 $ 7,439 $ 7,380 Net premiums earned 1,382 1,898 7,460 7,341 Net losses and loss adjustment expenses 162 165 1,261 1,316 Loss ratio 12% 9% 17% 18%
PART II - OTHER INFORMATION AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES Item 1: LEGAL PROCEEDINGS California voters passed Proposition 103, an insurance initiative which required a rollback in insurance rates for policies (and bonds) written or renewed during the twelve month period beginning November 8, 1988 and provided that changes in insurance premiums after November 8, 1988 must be submitted for approval of the California Insurance Commissioner prior to implementation. While the Proposition has the most significant impact on automobile insurance, its provisions, as written, also apply to other property and casualty insurers including surety insurers. On August 26, 1991, The State of California enacted Insurance Code Section 1861.135 ("Section 1861.135") exempting surety insurance from the rate rollback and prior approval provisions of Proposition 103. Section 1861.135 does not affect Proposition 103's prohibition against excessive, inadequate or discriminatory rates. Due to the enactment of Section 1861.135, the Company terminated a previously established reserve for potential premium rebates. Subsequently, the Department of Insurance ("Department") and Voter Revolt brought a motion for writ of mandate challenging the validity of Section 1861.135. On March 21, 1992, the Los Angeles Superior Court concluded that Section 1861.135 did not violate the California Constitution or the provisions of Proposition 103. The Department and Voter Revolt appealed. On December 7, 1994, the Second District Court of Appeal overturned Section 1861.135 by a 2-1 vote. On February 24, 1994, the California Supreme Court agreed to hear the Company's petition for review, thereby staying the Court of Appeals opinion. Such hearing has not yet been held. The outcome of this appeal cannot be predicted; however, if this appeal is not successful, it could have a significant impact on the Company's earnings but is not expected to have a material adverse impact on the Company's financial position. Items 2-5: CHANGE IN SECURITIES, DEFAULTS UPON SENIOR SECURITIES, SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS, OTHER INFORMATION None Item 6: EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits See the Exhibit Index on page 15. (b) Reports on Form 8-K There were no reports filed on Form 8-K during the three months ended March 31, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMWEST INSURANCE GROUP, INC. Date: May 12, 1994 by: /s/ JOHN E. SAVAGE ------------------- John E. Savage President, Co-Chief Executive Officer and Chief Operating Officer (Principal Executive Officer) by: /s/ STEVEN R. KAY ------------------ Steven R. Kay Senior Vice-President, Chief Financial Officer, Treasurer and Director (Principal Financial and Principal Accounting Officer) AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES EXHIBIT INDEX Exhibit Number Description Location 2 Plan of acquisition, reorganization, arrangement, liquidation or succession None 4 Instruments defining the rights of securityholders, including indentures Not required 11 Statement re computation of per share earnings Page 16 15 Letter re unaudited interim financial information None 18 Letter re change in accounting principles None 19 Previously unfiled documents Exhibit 19.1 First Amendment to Revolving Credit Agreement Page 18 20 Report furnished to security holders None 23 Published report regarding matters submitted to vote of security holders None 24 Consents of experts and counsel None 25 Power of attorney None 28 Additional exhibits None EX-11 3 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
EXHIBIT 11 AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES STATEMENT RE COMPUTATION OF PER SHARE EARNINGS Primary (2) Fully diluted (3) earnings per share earnings per share ----------------------------- ---------------------------- 1995 1994 1995 1994 ---------- ---------- Average shares outstanding for the three month period ending March 31, 2,334,789 2,358,383 2,334,789 2,358,383 Incremental shares resulting from conversion of common stock equivalents: Options to purchase shares of common stock at an exercise price of $5.37- $15.675 (261,975 and 245,450 options at March 31, 1994 and 1995, respectively) (1) 47,605 50,648 54,039 50,648 ---------- ---------- ---------- ---------- Total incremental shares resulting from conversion of common stock equivalents at March 31, 47,605 50,648 54,039 50,648 ---------- ---------- ---------- ---------- Total shares and incremental shares resulting from conversion of common stock equivalents at March 31, 2,382,394 2,409,031 2,388,828 2,409,031 ========== ========== ========== ========== Percentage of incremental shares resulting from conversion of common stock equivalents at March 31, 2.00% 2.10% 2.26% 2.10% ========== ========== ========== ==========
EXHIBIT 11, (continued) AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES STATEMENT RE COMPUTATION OF PER SHARE EARNINGS (1) Outstanding options and warrants to purchase common stock. Options to purchase shares of common stock as of March 31, 1995 and 1994, respectively:
March 31, 1995 March 31, 1994 -------------- -------------- Grant price: $5.37 11,000 11,000 Grant price: $9.875 10,750 13,250 Grant price: $10.625 13,250 16,250 Grant price: $11.125 14,750 18,250 Grant price: $9.375 1,125 10,125 Grant price: $11.375 7,500 7,500 Grant price: $14.25 12,750 15,750 Grant price: $15.675 8,500 8,500 Grant price: $9.213 8,500 8,500 Grant price: $8.375 20,500 26,250 Grant price: $8.375 18,750 19,400 Grant price: $10.75 34,875 37,500 Grant price: $11.825 10,000 10,000 Grant price: $10.375 3,000 3,000 Grant price: $13.875 70,200 56,700 ------- ------- 245,450 261,975 ======= =======
(2) Calculation of incremental shares resulting from conversion of common stock equivalents, using the Treasury Stock Method for calculating primary earnings per share, is based on the average of the closing prices, for the three months and nine months ended March 31, 1995 and 1994, as reported on the American Stock Exchange. (3) Calculation of incremental shares resulting from conversion of common stock equivalents, using the Treasury Stock Method for calculating fully diluted earnings per share, is based on the greater of the average ending ask price or the closing ask price on March 31, 1995 and 1994, as reported on the American Stock Exchange. EX-10 4 FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT EXHIBIT 19.1 FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (this "Amendment") is entered into as of this 24th day of April, 1995, by and between AMWEST INSURANCE GROUP, INC. ("Borrower") and UNION BANK ("Bank"), in view of the following: WHEREAS, Borrower and Bank have previously entered into that certain Revolving Credit Agreement dated as of August 6, 1993 (the "Agreement"); and WHEREAS, Borrower has requested Bank to amend certain terms and conditions of the Agreement, as more fully elaborated hereinbelow; and WHEREAS, Bank is prepared to so amend the Agreement upon the terms and conditions set forth hereinbelow; NOW, THEREFORE, in view of the foregoing and in consideration of the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiently of which is acknowledged, Borrower and Bank agree as follows: 1. Capitalized Terms. All capitalized terms not specifically defined herein shall have the meanings given thereto in the Agreement. 2. Section and Paragraph Numbers. Unless otherwise provided, all references herein to section and paragraph numbers shall be to the Agreement. 3. Amendments to Agreement. 3.1 Amendments to Defined Terms in Article I. 3.1.1 The last sentence of the definition of "Applicable Base Lending Rate Margin" and "Applicable Eurodollar Lending Rate Margin" is deleted in its entirety. The interest rate grid immediately following the definition is deleted and the following grid substituted therefor:
Applicable Applicable Base Lending Eurodollar Lending Leverage Ratio Rate Margin Rate Margin ----------------- ------------- ------------------ greater than 0.30 0.50 2.00% from 0.25 to 0.30 0.25% 1.75% from 0.20 to 0.25 0.00% 1.50% from 0.15 to 0.20 0.00% 1.25% less than 0.15 0.00% 1.00%
Amwest Insurance lst Amendment to Credit Agmt. File A 7469 4/19/95 -1- 3.1.2 There shall be added a new defined term "Fixed Charge Coverage Ratio" as follows: "Fixed Charge Coverage Ratio means, as of the end of any fiscal quarter, the ratio of (a) the sum of (i) the amount of cash, Cash Equivalents and Investments of the Borrower, on a non-consolidated basis, as of the end of such fiscal quarter, plus (ii) the estimated interest expense related to the Surplus Note over the subsequent four (4) consecutive quarters, plus (iii) the greater of (1) statutory net income of Borrower's insurance Subsidiaries, determined on a combined statutory basis for the four (4) consecutive fiscal quarters ending on such day, or (2) 10% of the statutory surplus of the most recently ended fiscal quarter, plus (iv) cash received from stock options exercised for the four (4) previous consecutive fiscal quarters, plus (v) unused amounts available to be drawn under this Agreement, to (b) the sum of (i) aggregate payments of principal and interest on all Debt of the Borrower and its Subsidiaries required to be paid during the following four (4) consecutive fiscal quarters, plus (ii) the total amount of common stock dividends to be paid over the next four (4) consecutive fiscal quarters, plus (iii) the total amount of common share repurchases over the next four (4) consecutive fiscal quarters, plus (iv) total capital expenditures incurred by Borrower (inclusive of permitted acquisition payments made) over the next four (4) consecutive fiscal quarters." 3.1.3 The definition of "Leverage Ratio" is deleted in its entirety and the following substituted therefor: "Leverage Ratio" means the ratio of (a) funded Debt to Union Bank to (b) Tangible Net Worth, measured as of the last day of each fiscal quarter. 3.1.4 The definition of "Maturity Date" as meaning July 30, 1999 is deleted and the date of July 15, 2000 is substituted therefor. 3.1.5 The definition of "Revolving Commitment" is deleted in its entirety and the following substituted therefor: "Revolving Commitment" means Fifteen Million Dollars ($15,000,000); provided that on July 15, 1995 the Revolving Commitment shall mean an amount which is reduced by the Commitment Reduction for that date and by the same amount each July 15 thereafter." 3.1.6 The definition of "Tangible Net-Worth" is amended by adding the parenthetical phrase "(but excluding the effects of FASB 115)" after the phrase "as determined in accordance with generally accepted accounting principles consistently applied". Amwest Insurance lst Amendment to Credit Agmt. > File A 7469 4/19/95 -2- 3.2 Section 2.12 is deleted in its entirety and the following substituted therefor: "SECTION 2.12 Mandatory Commitment Reductions. The Revolving Commitment shall be reduced annually, commencing July 15, 1995 in accordance with this Section 2.12. On each Revolving Commitment Reduction Date, the Revolving Commitment shall be reduced by a Revolving Commitment Reduction Payment.
Revolving Commitment Annual Reduction Date Commitment Reduction --------------------- -------------------- July 15, 1995 $2,500,000 July 15, 1996 $2,500,000 July 15, 1997 $2,500,000 July 15, 1998 $2,500,000 July 15, 1999 $2,500,000 July 15, 2000 $2,500,000 (the Revolving Commitment shall be reduced to Zero Dollars ($0))
3.3 Sections 5.9 Liquidity Ratio and 5.10 Leverage Ratio are deleted in their entirety. New Sections 5.9 and 5.10 are added to read as follows: "SECTION 5.9 Fixed Charge Coverage Ratio. On a consolidated basis, Borrower and its Subsidiaries will not permit, as of the end of each fiscal quarter, the Fixed Charge Coverage Ratio to be less than 1.10:1.00." "SECTION 5.10 [Intentionally deleted]" 3. Effectiveness of this Amendment. This Amendment shall become effective as of the date hereinabove stated when, and only when, Bank shall have received all of the following, each in form and substance satisfactory to Bank: (a) A counterpart of this Amendment, duly executed by the Borrower; (b) A new Revolving Note to evidence the increased Revolving Commitment and to replace the existing Revolving Note; (c) A fully earned, non-refundable facility fee in the amount of Eighteen Thousand Seven Hundred Fifty Dollars ($18,750), payable by debiting Borrower's demand deposit account with Bank or by incoming wire transfer of immediately available funds; and (d) Such other documents, instruments or agreements as Bank may reasonably deem necessary. Amwest Insurance lst Amendment to Credit Agmt. File A 7469 4/19/95 -3- 4. Ratification. (a) Except as specifically amended herein above, the Agreement shall remain in full force and effect and is hereby ratified and confirmed; and (b) Upon the effectiveness of this Amendment, each reference in the Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like import referring to the Agreement shall mean and be a reference to the Agreement as amended by this Amendment and each reference in the Agreement to the "Revolving Note" or words of like import referring to the Revolving Note shall mean and be a reference to the replacement Revolving Note issued pursuant to this Amendment. 5. Representations and Warranties. Borrower represents and warrants as follows: (a) Each of the representations and warranties contained in Section 3 of the Agreement, as hereby amended, is hereby reaffirmed as of the date hereof, each as if set forth herein; (b) The execution, delivery and performance of this Amendment are within Borrower's corporate powers, have been duly authorized by all necessary corporate action, have received all necessary approvals, if any, and do not contravene any law or any contractual restriction binding on Borrower; (c) This Amendment is, and the replacement Revolving Note when delivered for value received will be, the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their terms; and (d) No event has occurred and is continuing or would result from this Amendment which constitutes an Event of Default under the Agreement, or would constitute an Event of Default but for the requirement that notice be given or time elapse or both. 6. Governing Law. This Amendment shall be deemed a contract under and subject to, and shall be construed for all purposes and in accordance with, the laws of the State of California. 7. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] [NEXT PAGE IS SIGNATURE PAGE] Amwest Insurance lst Amendment to Credit Agmt. File A 7469 4/19/95 -4- WITNESS the due execution hereof as of the date first above written. AMWEST INSURANCE GROUP, INC. UNION BANK By: /s/ Steven R. Kay By: /s/ Robert C. Dawson -------------------- ----------------------- Name: Steven R. Kay Name: Robert C. Dawson -------------------- ----------------------- Title: Sr. V.P. & CFO Title: Vice President -------------------- ----------------------- By: By: -------------------- ----------------------- Name: Name: -------------------- ----------------------- Title: Title: -------------------- ----------------------- Amwest Insurance lst Amendment to Credit Agmt. 4/19/95 -5- -----END PRIVACY-ENHANCED MESSAGE-----