-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PkJYHaaKagWlspsvF3aBsG0QKLBTvv5bFomR7YwBg+65uV3TeCXZCVnzEP1usX+6 VAnloO2O1wsyKOrrFbOvnA== 0000780118-97-000011.txt : 19970814 0000780118-97-000011.hdr.sgml : 19970814 ACCESSION NUMBER: 0000780118-97-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMWEST INSURANCE GROUP INC CENTRAL INDEX KEY: 0000780118 STANDARD INDUSTRIAL CLASSIFICATION: SURETY INSURANCE [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: 97658372 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 US DOLLARS 3-MOS DEC-31-1996 APR-01-1997 JUN-30-1997 1 0 0 97,713 15,520 0 0 118,924 355 8,884 18,838 182,708 39,604 36,624 0 0 14,500 0 0 34 53,590 182,708 21,781 1,605 348 5 7,983 10,151 3,269 1,858 544 1,314 0 0 0 1,314 0.39 0.39 42,009 11,269 3,675 4,055 13,294 39,604 0
10-Q 2 FORM 10-Q QUARTERLY FILING FOR AIG 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 June 30, 1997 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.) 5230 Las Virgenes Rd. Calabasas, California 91302 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (818) 871-2000 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 August 12, 1997, 3,379,590 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 and six months ended June 30, 1997 and 1996 3 Consolidated Balance Sheets as of June 30, 1997 and December 31, 1996 4 Consolidated Statements of Cash Flows for the three and six months ended June 30, 1997 and 1996 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 Ho1ders 13 Item 5 Other Information 13 Item 6 Exhibits and Reports on Form 8-K 14 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 Six months ended June 30, June 30, -------- -------- 1997 1996 1997 1996 ---- ---- ---- ---- Underwriting revenues: Net premiums written $ 26,227 $ 22,979 $ 46,687 $ 43,444 Net change in unearned premiums (4,446) (1,444) (3,460) (74) ---------------- ---------------- ---------------- ---------------- Net premiums earned 21,781 21,535 43,227 43,370 ---------------- ---------------- ---------------- ---------------- Underwriting expenses: Losses and loss adjustment expenses 9,364 12,810 16,017 23,273 Reinsurance recoveries (1,381) (980) (967) (1,372) ---------------- ---------------- ---------------- ---------------- Net losses and loss adjustment expenses 7,983 11,830 15,050 21,901 Policy acquisition costs 10,151 9,069 20,973 18,556 General operating costs 3,269 3,287 6,172 7,115 ---------------- ---------------- ---------------- ---------------- Total underwriting expenses 21,403 24,186 42,195 47,572 ---------------- ---------------- ---------------- ---------------- Underwriting income (loss) 378 (2,651) 1,032 (4,202) Interest expense (478) (598) (879) (1,192) Merger expense - - - (710) Lease termination expense - (1,300) - (1,300) Net investment income 1,605 1,679 3,286 3,486 Net realized investment gains 348 516 985 1,541 Commissions and fees 5 80 5 223 ---------------- ---------------- ---------------- ---------------- Income (loss) before income taxes 1,858 (2,274) 4,429 (2,154) Provision (benefit) for income taxes: Current (122) (55) 402 21 Deferred 666 (908) 928 (950) ---------------- ---------------- ---------------- ---------------- Total provision (benefit) for income taxes 544 (963) 1,330 (929) ---------------- ---------------- ---------------- ---------------- Net income (loss) $ 1,314 $ (1,311) $ 3,099 $ (1,225) ================ ================ ================ ================ Earnings (loss) per common share: Net income (loss) $ 0.39 $ (0.39) $ 0.92 $ (0.37) ================ ================ ================ ================ Weighted average shares outstanding 3,395 3,353 3,376 3,348
See accompanying notes to interim consolidated financial statements. AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) ASSETS
June 30, December 31, 1997 1996 --------------------- --------------------- (unaudited) Investments: Fixed maturities, available-for-sale (amortized cost of $96,915 and $101,799 at June 30, 1997 and December 31, 1996, respectively) $ 97,713 $ 102,494 Common equity securities, available-for-sale (cost of $7,221 and $7,217 at June 30, 1997 and December 31, 1996, respectively) 10,470 9,779 Preferred equity securities, available-for-sale (cost of $4,557 and $3,971 at June 30, 1997 and December 31, 1996, respectively) 5,050 4,253 Other invested assets (cost of $3,500 and $2,667 at June 30, 1997 and December 31, 1996, respectively) 4,110 2,849 Short-term investments 1,581 890 --------------------- --------------------- Total investments 118,924 120,265 Cash and cash equivalents 355 6,434 Accrued investment income 1,334 1,399 Agents balances and premiums receivable (less allowance for doubtful accounts of $446 at June 30, 1997 and December 31, 1996) 14,976 10,882 Reinsurance recoverable: Paid loss and loss adjustment expenses 2,420 2,749 Unpaid loss and loss adjustment expenses 6,464 6,443 Ceded unearned premiums 1,074 1,849 Deferred policy acquisition costs 18,838 16,101 Furniture, equipment and improvements, net 5,391 4,747 Income taxes recoverable 1,818 2,802 Other assets 11,114 7,747 --------------------- --------------------- Total assets $ 182,708 $ 181,418 ===================== =====================
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (Dollars in thousands) LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31, 1997 1996 --------------------- --------------------- (unaudited) Liabilities: Unpaid losses and loss adjustment expenses $ 39,604 $ 42,009 Unearned premiums 36,624 33,939 Funds held as collateral 26,148 29,928 Bank indebtedness 14,500 12,500 Amounts due to reinsurers 288 345 Deferred Federal income taxes 3,205 1,842 Other liabilities 8,715 10,923 --------------------- --------------------- Total liabilities 129,084 131,486 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: 3,369,577 at June 30, 1997 and 3,326,002 at December 31, 1996 34 33 Additional paid-in capital 17,216 16,827 Net unrealized appreciation of investments carried at market, net of income taxes 3,399 2,456 Retained earnings 32,975 30,616 --------------------- --------------------- Total stockholders' equity 53,624 49,932 --------------------- --------------------- Total liabilities and stockholders' equity $ 182,708 $ 181,418 ===================== =====================
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 Six months ended June 30, June 30, -------- -------- 1997 1996 1997 1996 ---- ---- ---- ---- Cash flows from operating activities: Net income (loss) $ 1,314 $ (1,311) $ 3,099 $ (1,225) Adjustments to reconcile net income to cash provided by operating activities: Change in agents' balances and premiums receivable and unearned premiums 1,200 (269) (1,409) (3,936) Change in accrued investment income 88 82 65 135 Change in unpaid losses and loss adjustment expenses 582 1,652 (2,405) 4,308 Change in reinsurance recoverable on paid and unpaid losses and loss adjustment expenses and ceded unearned premiums (288) (2,296) 1,083 (2,461) Change in amounts due to/from reinsurers (324) (851) (57) (511) Change in other assets and other liabilities (2,847) 739 (5,575) 3,744 Change in income taxes, net 333 (1,355) 1,861 (1,908) Change in deferred policy acquisition costs (2,625) (1,103) (2,737) (909) Net realized gain on sale of investments (348) (505) (985) (1,657) Net realized (gain)loss on sale of fixed assets (7) - (5) 1 Provision for depreciation and amortization 316 325 661 655 ------------ ------------- ------------ -------------- Net cash used by operating activities (2,606) (4,892) (6,404) (3,764) Cash flows from investing activities: Cash received from investments sold, matured, called or repaid: Investments available-for-sale 15,304 12,885 28,362 35,305 Cash paid for investments acquired: Investments available-for-sale (12,335) (11,961) (24,579) (27,274) Amortization of discount on bonds (30) 46 (28) 83 Capital expenditures, net (1,187) (585) (1,300) (1,305) ------------ ------------- ------------ -------------- Net cash provided by investing activities 1,752 385 2,455 6,809
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands)
Three months ended Six months ended June 30, June 30, -------- -------- 1997 1996 1997 1996 ---- ---- ---- ---- Cash flows from financing activities: Proceeds from issuance of long term debt 2,000 - 2,000 Proceeds from issuance of common stock 164 19 390 265 Change in funds held as collateral (1,043) (602) (3,780) (5,974) Dividends paid (371) (468) (740) (729) ------------ ------------- ------------ -------------- Net cash provided (used) by financing activities 750 (1,051) (2,130) (6,438) ------------ ------------- ------------ -------------- Net decrease in cash and cash equivalents (104) (5,558) (6,079) (3,393) Cash and cash equivalents at beginning of period 459 7,397 6,434 5,232 ------------ ------------- ------------ -------------- Cash and cash equivalents at end of period $ 355 $ 1,839 $ 355 $ 1,839 ============ ============= ============ ============== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 478 $ 598 $ 879 $ 1,192 Income taxes 212 748 256 1,312 Cash received during the period on: Investments sold prior to maturity $13,594 $ 11,885 $23,765 $ 34,005 Investments held to maturity 1,710 1,000 4,597 1,300
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, 1996. Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net premiums earned remained relatively constant at $21,535,000 and $43,370,000 for the three months and six months ended June 30, 1996, respectively, as compared to $21,781,000 and $43,227,000 for the three months and six months ended June 30, 1997, respectively. The Company generally earns premiums ratably over the assigned bond terms for the surety operations and the policy term for the specialty property and casualty operations. Net losses and loss adjustment expenses decreased 33% and 31% from $11,830,000 and $21,901,000 for the three months and six months ended June 30, 1996, respectively, to $7,983,000 and $15,050,000 for the three months and six months ended June 30, 1997, respectively. The loss ratio for the surety operations decreased from 45% and 41% for the three months and six months ended June 30, 1996, respectively, to 29% and 27% for the three months and six months ended June 30, 1997, respectively. This improved loss ratio is reflective of decreased loss severity primarily in the contract performance and payment product line. The loss ratio for the property and casualty operations also decreased from 85% and 79% for the three months and six months ended June 30, 1996, respectively, to 58% for each of the three months and six months ended June 30, 1997, primarily due to improved results on business written under the Arizona private passenger automobile program. Policy acquisition costs increased as a percentage of net premiums earned from 42%, or $9,069,000, and 43%, or $18,556,000, for the three months and six months ended June 30, 1996, respectively, to 47%, or $10,151,000, and 49%, or $20,973,000, for the three months and six months ended June 30, 1997, respectively. Such increase is primarily attributable to increased costs of the Company's branch office network without a corresponding increase in premiums earned on business written through the Company's branches, as well as a decline in contingent commissions earned by the Company due to changes in its reinsurance treaties. General operating costs remained relatively steady as a percentage of net premiums earned at 15%, or $3,287,000, and 16%, or $7,115,000, for the three months and six months ended June 30, 1996, respectively, as compared to 15%, or $3,269,000, and 14%, or $6,172,000, for the three months and six months ended June 30, 1997, respectively. The improvement in general and administrative expenses for the six months ended June 30, 1997 is reflective of operational efficiencies associated with the merger with Condor Services, Inc. which was consumated on March 14, 1996. Underwriting results were losses of $2,651,000 and $4,202,000 for the three months and six months ended June 30, 1996, respectively, and income of $378,000 and $1,032,000 for the three months and six months ended June 30, 1997, respectively. The combined ratio decreased from 112% and 110% for the three months and six months ended June 30, 1996, respectively, to 98% for each of the three months and six months ended June 30 1997. Interest expense decreased 20% and 26% from $598,000 and $1,192,000 for the three months and six months ended June 30, 1996, respectively, to $478,000 and $879,000 for the three months and six months ended June 30, 1997, respectively. The decrease is attributable to a decrease in the interest rate on the bank indebtedness from an average 8.7% for the six months ended June 30, 1996 to an average rate of 7.1% for the six months ended June 30, 1997. The decrease is also attributed to an overall reduction in average funds held as collateral from $31,977,000 and $34,663,000 for the three months and six months ended June 30, 1996, respectively, to $26,670,000 and $28,038,000 for the three months and six months ended June 30, 1997, respectively. Collateral rates are adjusted at various times throughout the year in accordance with general market conditions. A non-recurring $1,300,000 pre-tax charge for the costs associated with accelerating the lease termination date on the Company's former home office from July 31, 1998 to June 30, 1997 was charged to operations during the second quarter of 1996. During the second quarter of 1997, the Company moved its home office to Calabasas, CA. The new home office has allowed the Company to consolidate the operations of its surety subsidiaries, Amwest Surety Insurance Company and Far West Insurance Company, with the operations of its property and casualty subsidiary, Condor Insurance Company. Net investment income decreased 4% and 6% from $1,679,000 and $3,486,000 for the three months and six months ended June 30, 1996, respectively, to $1,605,000 and $3,286,000 for the three months and six months ended June 30, 1997, respectively. The decrease is primarily due to a decrease in the amount of invested assets from $121,356,000 at June 30, 1996 to $118,924,000 at June 30, 1997. Net realized investment gains decreased from $516,000 and $1,541,000 for the three months and six months ended June 30, 1996, respectively, to $348,000 and $985,000 for the three months and six months ended June 30, 1997, respectively. The investments sold during the three months and six months ended June 30, 1997 were primarily equity securities and certain fixed income investments including mortgage-backed and municipal bond securities. Income before income taxes increased from losses of $2,274,000 and $2,154,000 for the three months and six months ended June 30, 1996, respectively, to income of $1,858,000 and $4,429,000 for the three months and six months ended June 30, 1997, respectively, due to the factors outlined above. The effective tax benefit was 42% and 43% for the three months and six months ended June 30, 1996 as compared to an effective tax rate of 29% and 30% for the three months and six months ended June 30, 1997. The primary reason for the variance from the corporate income tax rate of 34% is tax advantaged income received on a portion of the Company's investment portfolio. Net income increased from net losses of $1,311,000 and $1,225,000 for the three months and six months ended June 30, 1996, respectively, to net income of $1,314,000 and $3,099,000 for the three months and six months ended June 30, 1997, respectively, due to the factors outlined above. Liquidity and Capital Resources As of June 30, 1997, the Company held total cash and cash equivalents and invested assets of $119,279,000. This amount includes an aggregate of $26,148,000 in funds held as collateral which is shown as a liability on the Company's consolidated balance sheets. As of June 30, 1997, the Company's invested assets consisted of $97,713,000 in fixed maturities, $10,470,000 in common equity securities, $5,050,000 in preferred equity securities, $4,110,000 in other invested assets and $1,581,000 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 respective domicilary state of each of the insurance subsidiaries regulates, through the Office of the Insurance Commissioner, the amount of dividends which can be paid by a domestic insurance company utilizing various formula methodology. On August 6, 1993, the Company entered into a revolving credit agreement with Union Bank for $12,500,000. The loan was amended on April 24, 1995 and again on July 10, 1996 to increase the amount available under the revolving line of credit from $12,500,000 to $15,000,000. The loan has a variable rate based upon fluctuations in the London Interbank Offered Rate (LIBOR) with amortizing credit line reduction each September 30, ultimately maturing on September 30, 2001. On June 30, 1997, the Company increased its outstanding balance by $2,000,000 to $14,500,000. On September 30, 1997, the revolving credit line is scheduled to be reduced to $12,000,000. The interest rate at June 30, 1997 was 7.1%. The credit agreement contains certain financial covenants with respect to capital expenditures, business acquisitions, liquidity ratio, leverage ratio, tangible net worth, net profit and dividend payments. The Company terminated a portion of its lease with Trillium/Woodland Hills on June 30, 1997. The Company is still responsible for approximately 18,000 square feet through July 31, 1998. The Company is a party to a new lease with Ahmanson Commercial Development Company for its corporate headquarters. The lease commenced on May 27, 1997. The new lease term is for 15 years and contains provisions for scheduled lease charges. The Company's minimum lease commitment for the remainder of 1997 is approximately $596,000. The Company also has the option to purchase this new building and land three years into the lease period at a predetermined rate for the building, with the value of land based on then existing market rates. Other than the Company's obligations with respect to funds held as collateral, the Company's obligation to pay claims as they arise, the Company's commitments to pay principal and interest on the bank debt and 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 1997. The Company used $4,892,000 and $3,764,000 in cash from operating activities for the three months and six months ended June 30, 1996 as compared to $2,606,000 and $6,404,000 for the three months and six months ended June 30, 1997. The Company generated $385,000 and $6,809,000 in cash from investing activities for the three months and six months ended June 30, 1996 as compared to $1,752,000 and $2,455,000 for the three months and six months ended June 30, 1997. The Company used $1,051,000 and $6,438,000 in cash from financing activities for the three months and six months ended June 30, 1996 as compared to generating $750,000 and using $2,130,000 for the three months and six months ended June 30, 1997. The table on the next page shows, for the periods indicated, the gross premiums written, net premiums earned, net losses and loss adjustment expenses and loss ratios for the Company's specialty property and casualty operations and surety operations. The surety operations are detailed by the Company's three 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 Six months ended Year ended June 30, June 30, December 31, Type of Bond 1997 1996 1997 1996 1996 1995 ------------ ---- ---- ---- ---- ---- ---- Contract Gross premiums written $ 15,059 $ 13,823 $ 24,678 $ 25,423 $ 49,782 $ 54,039 Net premiums earned 10,690 11,240 21,768 23,283 46,158 49,736 Net losses and loss adjustment expenses 4,102 6,411 7,559 12,050 24,430 20,044 Loss ratio 38% 57% 35% 52% 53% 40% Court Gross premiums written $ 2,589 $ 2,588 $ 5,096 $ 5,172 $ 11,197 $ 7,669 Net premiums earned 2,352 2,449 4,994 5,126 10,897 7,816 Net losses and loss adjustment expenses 73 185 7 734 835 323 Loss ratio 3% 8% 0% 14% 8% 4% Commercial Surety Gross premiums written $ 4,247 $ 2,918 $ 7,714 $ 4,625 $ 11,191 $ 8,374 Net premiums earned 3,206 2,409 5,558 4,591 8,407 9,746 Net losses and loss adjustment expenses 583 638 1,115 887 2,553 1,767 Loss ratio 18% 26% 20% 19% 30% 18% Total Surety Gross premiums written $ 21,895 $ 19,329 $ 37,488 $ 35,220 $ 72,170 $ 70,082 Net premiums earned 16,248 16,098 32,320 32,999 65,462 67,298 Net losses and loss adjustment expenses 4,758 7,234 8,681 13,671 27,818 22,134 Loss ratio 29% 45% 27% 41% 42% 33% Property & Casualty Gross premiums written $ $ 6,420 $ 12,296 $ 13,737 $ 25,172 $ 24,101 6,280 Net premiums earned 5,533 5,437 10,907 10,371 22,421 17,872 Net losses and loss adjustment expenses 3,225 4,596 6,369 8,230 18,830 13,131 Loss ratio 58% 85% 58% 79% 84% 73% Total Company Gross premiums written $ 28,175 $ 25,749 $ 49,784 $ 48,957 $ 97,342 $ 94,183 Net premiums earned 21,781 21,535 43,227 43,370 87,883 85,170 Net losses and loss adjustment expenses 7,983 11,830 15,050 21,901 46,648 35,265 Loss ratio 37% 55% 35% 50% 53% 41%
PART II - OTHER INFORMATION AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES Items 1-3: LEGAL PROCEEDINGS, CHANGE IN SECURITIES, DEFAULTS UPON SENIOR SECURITIES None Item 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The annual meeting of stockholders was held on May 30, 1997. (b) (i) The following directors were elected to serve until the 2000 Annual Meeting of Stockholders or until their successors have been duly elected and qualified: Richard H. Savage Steven R. Kay Charles L. Schultz (ii) The other directors whose terms of office continued after the meeting are: John E. Savage Guy A. Main Arthur F. Melton Thomas R. Bennett Edgar L. Fraser Bruce A. Bunner Jonathan K. Layne (c) (i) Of the 2,792,300 shares represented at the meeting, the directors named in (b) (i) above were elected by the following votes: No. of Votes Received ------------------------ Withhold Name For Authority Richard H. Savage 2,784,759 7,541 Steven R. Kay 2,786,059 6,241 Charles L. Schultz 2,784,159 8,141 Item 5: OTHER INFORMATION None Item 6: EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits See the Exhibit Index on page 16. (b) Reports on Form 8-K There were no reports filed on Form 8-K during the three months ended June 30, 1997. 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: August 13, 1997 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 17 15 Letter re unaudited interim financial information .... None 18 Letter re change in accounting principles ............ None 19 Previously unfiled documents ......................... None 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 1997 1996 1997 1996 Average shares outstanding for the six month period ending June 30, 3,348,969 3,309,301 3,348,969 3,309,301 Incremental shares resulting from conversion of common stock equivalents: Options to purchase shares of common stock at an exercise price of $6.14 - $14.875 (404,085 and 451,355 options at June 30, 1997 and 1996, respectively) (1) 26,876 38,839 38,674 38,839 ----------------- ------------------ ------------------ ----------------- Total incremental shares resulting from conversion of common stock equivalents at June 30, 26,876 38,839 38,674 38,839 ----------------- ------------------ ------------------ ----------------- Total shares and incremental shares resulting from conversion of common stock equivalents at June 30, 3,375,845 3,348,140 3,387,643 3,348,140 ================= ================== ================== ================= Percentage of incremental shares resulting from conversion of common stock equivalents at June 30, 0.80% 1.16% 1.14% 1.16% ================= ================== ================== =================
EXHIBIT 11 (continued) AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
Primary (2) Fully diluted (3) earnings per share earnings per share 1997 1996 1997 1996 Average shares outstanding for the three month period ending June 30, 3,363,900 3,321,080 3,363,900 3,321,080 Incremental shares resulting from conversion of common stock equivalents: Options to purchase shares of common stock at an exercise price of $6.14 - $14.875 (404,085 and 451,355 options at June 30, 1997 and 1996, respectively) (1) 30,646 31,780 54,243 31,780 ----------------- ------------------ ------------------ ----------------- Total incremental shares resulting from conversion of common stock equivalents at June 30, 30,646 31,780 54,243 31,780 ----------------- ------------------ ------------------ ----------------- Total shares and incremental shares resulting from conversion of common stock equivalents at June 30, 3,394,546 3,352,860 3,418,143 3,352,860 ================= ================== ================== ================= Percentage of incremental shares resulting from conversion of common stock equivalents at June 30, 0.90% 0.95% 1.59% 0.95% ================= ================== ================== =================
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 June 30, 1997 and 1996, respectively: June 30, 1997 June 30, 1996 ------------- ------------- Grant price: $6.14 3,025 3,025 Grant price: $6.82 - 1,650 Grant price: $8.375 - 32,250 Grant price: $9.00 5,050 5,550 Grant price: $9.10 4,785 5,005 Grant price: $9.213 - 8,500 Grant price: $9.875 10,500 10,500 Grant price: $9.90 - 1,650 Grant price: $10.375 3,000 3,000 Grant price: $10.50 4,550 4,850 Grant price: $10.625 12,750 12,750 Grant price: $10.75 25,500 27,000 Grant price: $11.125 12,000 12,000 Grant price: $11.55 - 1,650 Grant price: $11.825 10,000 10,000 Grant price: $12.50 17,500 17,500 Grant price: $12.75 4,000 4,000 Grant price: $13.375 94,575 101,000 Grant price: $13.875 62,700 67,950 Grant price: $14.02 1,650 1,650 Grant price: $14.125 17,500 - Grant price: $14.25 107,500 112,375 Grant price: $14.875 7,500 7,500 ----------- ------------ 404,085 451,355 =========== ============ (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 six months ended June 30, 1997 and 1996, 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 June 30, 1997 and 1996, as reported on the American Stock Exchange.
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