-----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, B2VEx1K1olh56ZVWfh0RB5H+ay8DVMbmpD7xEEqh1zeyugqNejJvp9qcQS3J86DB 4tO2vtUrKn+fDua8M+/Sbw== 0000780118-98-000003.txt : 19980519 0000780118-98-000003.hdr.sgml : 19980519 ACCESSION NUMBER: 0000780118-98-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980518 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: SEC FILE NUMBER: 001-09580 FILM NUMBER: 98626709 BUSINESS ADDRESS: STREET 1: 5230 LAS VIRGENES RD CITY: CALABASAS STATE: CA ZIP: 91302 BUSINESS PHONE: 8188712000 MAIL ADDRESS: STREET 1: 5230 LAS VIRGENES RD CITY: CALABASAS STATE: CA ZIP: 91302 EX-27 1 FDS --
7 1,000 U.S. Dollars 3-MOS Dec-31-1997 Jan-1-1998 Mar-31-1998 1 98,240 0 0 15,156 0 0 123,482 6,705 7,906 21,603 195,378 39,056 41,864 0 0 14,500 0 0 38 60,386 195,378 27,124 1,577 820 0 8,908 14,146 3,155 2,907 851 2,056 0 0 0 2,056 .54 .53 39,523 8,894 1,074 3,255 7,180 39,056 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, 1998 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 Road 91302 Calabasas, California (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 May 13, 1998, 3,835,841 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, 1998 and 1997 3 Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997 4 Consolidated Statements of Cash Flows for the three months ended March 31, 1998 and 1997 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 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, 1998 1997 Premiums written ............................................................................. $ 29,342 $ 21,610 Premiums ceded ............................................................................... (2,398) (1,149) -------- -------- Net premiums written ...................................................................... 26,944 20,461 Change in unearned premiums: Direct .................................................................................... 148 1,644 Ceded ..................................................................................... 32 (659) -------- -------- Net premiums earned .................................................................... 27,124 21,446 -------- -------- Underwriting expenses: Losses and loss adjustment expenses .......................................................... 9,492 6,653 Reinsurance (recoveries) refunds ............................................................. (584) 415 -------- -------- Net losses and loss adjustment expenses ................................................... 8,908 7,068 Policy acquisition costs ..................................................................... 14,146 10,821 General operating costs ...................................................................... 3,155 2,903 -------- -------- Total underwriting expenses ............................................................... 26,209 20,792 -------- -------- Underwriting income .................................................................... 915 654 Interest expense ................................................................................. (405) (401) Net investment income ............................................................................ 1,577 1,681 Net realized gains ............................................................................... 820 637 -------- -------- Income before income taxes ................................................................... 2,907 2,571 Provision for income taxes: Current ...................................................................................... 700 524 Deferred ..................................................................................... 151 262 -------- -------- Total provision for income taxes .......................................................... 851 786 -------- -------- Net income ............................................................................. $ 2,056 $ 1,785 ======== ======== Earnings per common share: Basic ........................................................................................ $ 0.54 $ 0.49 ======== ======== Diluted ...................................................................................... $ 0.53 $ 0.48 ======== ========
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, 1998 1997 --------- --------- (unaudited) Investments, available-for-sale: Fixedmaturities, at market value (amortized cost of $95,915 and $96,516 at March 31, 1998 and December 31, 1997, respectively) .................................................................. $ 98,240 $ 98,746 Common equity securities, at market value (cost of $6,775 and $6,856 at March 31, 1998 and December 31, 1997, respectively) 11,339 10,297 Preferred equity securities, at market value (cost of $3,797 and $2,664 at March 31, 1998 and December 31, 1997, respectively) 4,177 2,894 Other invested assets (cost of $6,250 and $5,816 at March 31, 1998 and December 31, 1997, respectively) ..................................... 7,645 6,455 Short-term investments .............................................................. 2,081 2,281 --------- --------- Total investments ................................................................... 123,482 120,673 Cash and cash equivalents ........................................................... 6,705 3,807 Accrued investment income ........................................................... 1,423 1,366 Agents balances and premiums receivable (less allowance for doubtful accounts of $967 and $467 at March 31, 1998 and December 31, 1997) ............................................................. 15,829 12,511 Reinsurance recoverable: Paid loss and loss adjustment expenses ......................................... 1,424 2,524 Unpaid loss and loss adjustment expenses ....................................... 6,482 6,185 Ceded unearned premiums ............................................................. 2,071 2,039 Deferred policy acquisition costs ................................................... 21,603 21,299 Furniture, equipment and improvements, net .......................................... 5,348 5,355 Current Federal income taxes ........................................................ (778) 1,581 Other assets ........................................................................ 11,789 13,179 --------- --------- Total assets ............................................................... $ 195,378 $ 190,519 ========= =========
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (Dollars in thousands) LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31, 1998 1997 -------- -------- (unaudited) Liabilities: Unpaid losses and loss adjustment expenses ...................................... $ 39,056 $ 39,523 Unearned premiums ............................................................... 41,864 42,013 Funds held as collateral ........................................................ 26,491 23,116 Deferred Federal income taxes ................................................... 4,131 3,925 Bank indebtedness ............................................................... 14,500 14,500 Amounts due to reinsurers ....................................................... 599 455 Other liabilities ............................................................... 8,313 9,808 -------- -------- Total liabilities ........................................................... 134,954 133,340 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: 3,818,624 at March 31, 1998 and 3,798,141 at December 31, 1997 ........................... 38 34 Additional paid-in capital ...................................................... 23,809 18,209 Net unrealized appreciation of investments carried at market, net of income taxes ......................................................... 5,707 4,316 Retained earnings ............................................................... 30,870 34,620 -------- -------- Total stockholders' equity .................................................. 60,424 57,179 -------- -------- Total liabilities and stockholders' equity ......................... $195,378 $190,519 ======== ========
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, 1998 1997 Cash flows from operating activities: Net income ....................................................................................... $ 2,056 $ 1,785 Adjustments to reconcile net income to cash provided by operating activities: Change in agents' balances and premiums receivable and unearned premiums ......................................................................... (3,467) (2,608) Change in accrued investment income ........................................................... (57) (22) Change in unpaid losses and loss adjustment expenses .......................................... (467) (2,987) Change in reinsurance recoverable on paid and unpaid losses and loss adjustment expenses and ceded unearned premiums 771 1,311 Change in amounts due to reinsurers ........................................................... 144 326 Change in other assets and other liabilities .................................................. 495 (2,217) Change in income taxes, net ................................................................... 1,848 1,556 Change in deferred policy acquisition costs ................................................... (304) (112) Net realized (gain) on sale of investments .................................................... (819) (637) Net realized loss on sale of fixed assets ..................................................... 2 1 Provision for depreciation and amortization ................................................... 393 346 -------- -------- Net cash provided (used) by operating activities ........................................ 595 (3,258) Cash flows from investing activities: Cash received from investments sold prior to maturity ............................................ 16,753 10,171 Cash received from investments matured or called ................................................ 3,561 2,887 Cash paid for investments acquired ............................................................... (20,229) (12,244) Amortization of discount on bonds ................................................................ 33 (26) Capital expenditures, net ........................................................................ (388) (113) Acquisition of agencies, net ..................................................................... (600) -- Mortgage and other loans, net .................................................................... -- (510) -------- -------- Net cash provided (used) by investing activities ............................................. (870) 165 Cash flows from financing activities: Proceeds from issuance of common stock ............ 179 226 Change in funds held as collateral ................ 3,375 (2,738) Dividends paid .................................... (381) (369) ------- ------- Net cash provided (used) by financing activities 3,173 (2,881) ------- ------- Net (decrease) in cash and cash equivalents ............ 2,898 (5,974) Cash and cash equivalents at beginning of period ....... 3,807 6,433 ------- ------- Cash and cash equivalents at end of period ............. $ 6,705 $ 459 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the period for: Interest .......................................... $ 405 $ 401 Income taxes ...................................... 162 44
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, 1997. (2) Stock Dividend The Company paid a 10% stock dividend to stockholders of record as of March 31, 1998. The dividend was charged to retained earnings in the amount of $5,424,000, which was based on the closing price of $15.625 per share of Common Stock on the declaration date. All share and per share amounts included in the accompanying consolidated financial statements and notes are based on the increased number of shares giving retroactive effect to the stock dividend. (3) Comprehensive Income SFAS No. 130 "Reporting Comprehensive Income" was adopted by the Company effective January 1, 1998. Comprehensive Income represents a measure of all changes in equity of enterprises that result from recognized transactions and other economic events of the period other than transactions with owners in their capacity as owners. Comprehensive income for the quarterly periods ended March 31, 1998 and 1997 was $3,447,000 and $473,000, respectively. The Company's Comprehensive Income is comprised of net income for the period plus the tax effected increase or decrease in unrealized gains occurring during the period. (4) Earnings Per Share In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 128 ("FAS 128"), "Earnings Per Share", which requires the presentation of "basic" and "diluted" earnings per share("EPS") and is effective for periods ending after December 15, 1997. Basic EPS is calculated based on the weighted average number of common shares outstanding and diluted EPS includes the effects of dilutive potential common shares. The effect of this change on reported EPS data is as follows:
Three months ended March 31, Income Shares Per-Share (Numerator) (Denominator) Amount ($ in thousands) (Dollars) ---------------- ------------- --------- Basic EPS: 1998 $ 2,056 3,801,735 $ .54 1997 $ 1,785 3,667,441 $ .49 Effect of Dilutive Securities: 1998 79,592 1997 25,416 Diluted EPS: 1998 $ 2,056 3,881,327 $ .53 1997 $ 1,785 3,692,857 $ .48
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Premiums written increased 36% from $21,610,000 for the three months ended March 31, 1997 to $29,342,000 for the three months ended March 31, 1998. The premium growth was primarily due to premium increases in the surety product lines. Premiums for the surety division increased 44% from $15,710,000 for the three months ended March 31, 1997 to $22,634,000 for the three months ended March 31, 1998. The Company believes that the increase is attributable to the impact of regionalization of contract surety underwriting function thereby allowing the Company to respond on a more timely basis to bond requests coupled with continued strong growth in the commercial surety operation. Premiums for the property and casualty division also increased 14% from $5,900,000 for the three months ended March 31, 1997 to $6,708,000 for the three months ended March 31, 1998, primarily due to the commencement of one specialty general agency program. Net premiums earned increased 26% from $21,446,000 for the three months ended March 31, 1997 to $27,124,000 for the three months ended March 31, 1998. 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 ratio remained constant at 33%, or $7,068,000 for the three months ended March 31, 1997 and $8,908,000 for the three months ended March 31, 1998. The loss ratio for surety operations improved from 25% in 1997 to 22% in 1998, primarily due to improved loss experience in both contract and commercial surety operations. The loss ratio for property and casualty operations deteriorated from 58% in 1997 to 77% in 1998, primarily due to an increase in claims activity for the commercial trucking operation during the first quarter. The Company believes that the increase in commercial trucking claims activity for the first quarter of 1998 is primarily due to poor weather driving conditions in California caused by significantly increased rainfall in 1998 versus the corresponding 1997 period. Policy acquisition costs increased as a percentage of net premiums earned from 50%, or $10,821,000 to 52%, or $14,146,000 for the three months ended March 31, 1997 and 1998, respectively. This increase is primarily attributable to expenses incurred by the property and casualty division for additional programs which have not yet commenced. General operating costs decreased as a percentage of net premiums earned from 14%, or $2,903,000 for the three months ended March 31, 1997 to 12%, or $3,155,000 for the three months ended March 31, 1998. The improvement in the general and administrative expense ratio is reflective of increased net premiums earned. The Company's underwriting income increased from $654,000 for the three months ended March 31, 1997 to $915,000 for the three months ended March 31, 1998. The combined ratio remained steady at 97% for the three months ended March 31, 1997 and three months ended March 31, 1998, due to a combination of the factors discussed above. Interest expense increased from $401,000 for the three months ended March 31, 1997 to $405,000 for the three months ended March 31, 1998. This increase is attributable to an increase in the outstanding balance of bank indebtedness from $12,500,000 to $14,500,000 in June 1997 as well as an increase in the interest rate on the bank indebtedness from an average rate of 7.1% for the three months ended March 31, 1997 to an average rate of 7.5% for the three months ended March 31, 1998. The increase was partially offset by a reduction in average funds held as collateral from $28,560,000 for the three months ended March 31, 1997 to $24,804,000 for the three months ended March 31, 1998. Collateral rates are adjusted at various times throughout the year in accordance with general market conditions. Net investment income and realized investment gains increased 3% from $2,318,000 for the three months ended March 31, 1997 to $2,396,000 for the three months ended March 31, 1998. The increase is primarily due to an increase in realized investment gains from $637,000 at March 31, 1997 to $819,000 at March 31, 1998. The investments sold during the three months ended March 31, 1998 were primarily equity securities and certain fixed income investments including mortgage-backed and municipal bond securities. Income before income taxes increased from $2,571,000 for the three months ended March 31, 1997 to $2,907,000 for the three months ended March 31, 1998 due to the factors outlined above. The effective tax rate was 31% for the three months ended March 31, 1997 as compared to an effective rate of 29% for the three months ended March 31, 1998. 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 $1,785,000 for the three months ended March 31, 1997 to $2,056,000 for the three months ended March 31, 1998 due to the factors outlined above. Liquidity and Capital Resources As of March 31, 1998, the Company held total cash and cash equivalents and invested assets of $130,187,000. This amount includes an aggregate of $26,491,000 in funds held as collateral which is shown as a liability on the Company's consolidated balance sheets. As of March 31, 1998, the Company's invested assets consisted of $98,240,000 in fixed maturities, held at market value, $11,339,000 in common equity securities, $4,177,000 in preferred equity securities, $7,645,000 in other invested assets and $2,081,000 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 State of Nebraska 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 which refinanced a previous loan. The debt agreement was amended on April 24, 1995, July 10, 1996 and again on September 30, 1997 to increase the amount available under the revolving line of credit from $12,500,000 to $15,000,000 and to change certain covenants and payment requirements. The bank loan has a variable rate of interest based upon fluctuations in the London Interbank Offered Rate (LIBOR) and has amortizing principal payments. The interest rate at March 31, 1998 was 7.5%. 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 is a party to a lease with ACD2 for its corporate headquarters. This lease has a term of 15 years and contains provisions for scheduled lease charges. The Company's minimum commitment with respect to this lease in 1998 is approximately $699,000. The Company also has the option to purchase this new home office 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 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 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 1998. The Company used $3,258,000 in cash from operating activities for the three months March 31, 1997 as compared to generating $595,000 for the three months ended March 31, 1998. The Company generated $165,000 in cash for investing activities for the three months ended March 31, 1997 as compared to using $870,000 for the three months ended March 31, 1998. The Company used $2,881,000 in cash from financing activities for the three months ended March 31, 1997 as compared to generating $3,173,000 for the three months ended March 31, 1998. Certain statements contained in this Form 10-Q regard matters which are not historical facts and are forward looking statements. Because such forward looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward looking statements. Factors that could cause actual results to differ materially include, but are not limited to: a decline in demand for surety bonds or specialty property and casualty insurance, the ineffectiveness of certain management and reorganization changes made, a deterioration in results of any of the Company's product lines, adverse loss development and associated expense incurred by the Company due to severity or frequency of claims filed with respect to the Company's insurance products, or a general economic decline. The Comany undertakes no obligation to release publicly the results of any revisions to these forward looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 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 Year ended March 31, December 31, Type of Bond 1998 1997 1997 1996 - ------------------------------------------------------------------------------------ -------- -------- -------- -------- Contract Gross premiums written ......................................................... $ 12,474 $ 9,619 $ 54,808 $ 49,782 Net premiums earned ............................................................ 13,388 11,077 46,741 46,158 Net losses and loss adjustment expenses ........................................ 3,735 3,456 15,738 24,430 Loss ratio ..................................................................... 28% 31% 34% 53% Commercial Surety Gross premiums written ......................................................... $ 7,277 $ 3,260 $ 16,694 $ 11,192 Net premiums earned ............................................................ 5,757 2,305 12,786 8,446 Net losses and loss adjustment expenses ........................................ 969 568 2,873 2,571 Loss ratio ..................................................................... 17% 25% 22% 30% Court Gross premiums written ......................................................... $ 2,883 $ 2,831 $ 11,109 $ 11,196 Net premiums earned ............................................................ 2,786 2,739 11,038 10,897 Net losses and loss adjustment expenses ........................................ 204 (66) 1,403 835 Loss ratio ..................................................................... 7% -2% 13% 8% Total Surety Gross premiums written ......................................................... $ 22,634 $ 15,710 $ 82,611 $ 72,335 Net premiums earned ............................................................ 21,931 16,121 70,566 65,501 Net losses and loss adjustment expenses ........................................ 4,908 3,958 20,013 27,836 Loss ratio ..................................................................... 22% 25% 28% 42% Property & Casualty Gross premiums written ......................................................... $ 6,708 $ 5,900 $ 25,481 $ 25,072 Net premiums earned ............................................................ 5,193 5,325 21,585 22,382 Net losses and loss adjustment expenses ........................................ 4,000 3,110 14,644 18,811 Loss ratio ..................................................................... 77% 58% 68% 84% Total Company Gross premiums written ......................................................... $ 29,342 $ 21,610 $108,091 $ 97,242 Net premiums earned ............................................................ 27,124 21,446 92,151 87,883 Net losses and loss adjustment expenses ........................................ 8,908 7,068 34,657 46,647 Loss ratio ..................................................................... 33% 33% 38% 53%
PART II - OTHER INFORMATION AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES Items 1-5: LEGAL PROCEEDINGS, 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, 1998. 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 13, 1998 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 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 None 20 Report furnished to security holders None 23 Published report regarding matters submitted to vote None of security holders 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
Basic Diluted (2) earnings per share earnings per share 1998 1997(3) 1998 1997(3) Average shares outstanding for the three month period ending March 31, 3,801,735 3,667,441 3,801,735 3,667,441 Incremental shares resulting from conversion of common stock equivalents: Options to purchase shares of common stock at an exercise price of $5.58- $13.52 (471,417 and 448,565 options at March 31, 1998 and 1997, respectively) (1) 79,592 25,416 ----------------- ------------------ ------------------ ----------------- Total incremental shares resulting from conversion of common stock equivalents at March 31, 79,592 25,416 ----------------- ------------------ ------------------ ----------------- Total shares and incremental shares resulting from conversion of common stock equivalents at March 31, 3,801,735 3,667,441 3,881,327 3,692,857 ================= ================== ================== ================= Percentage of incremental shares resulting from conversion of common stock equivalents at March 31, 2.05% 0.69% ================= ================== ================== =================
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, 1998 and 1997, respectively: March 31, 1998 March 31, 1997 -------------- -------------- Grant price $5.582 3,328 3,328 Grant price $7.614 16,913 Grant price $8.182 5,555 6,105 Grant price $8.273 5,264 5,264 Grant price $8.977 11,550 Grant price $9.432 3,300 3,300 Grant price $9.545 5,005 5,335 Grant price $9.659 11,000 14,025 Grant price $9.773 8,250 28,050 Grant price $10.114 12,100 13,200 Grant price $10.500 1,815 Grant price $10.750 11,000 11,000 Grant price $11.023 80,850 Grant price $11.364 19,250 19,250 Grant price $11.591 3,300 4,400 Grant price $12.159 95,920 105,270 Grant price $12.614 61,545 70,620 Grant price $12.745 1,815 Grant price $12.841 19,250 Grant price $12.955 118,250 119,075 Grant price $13.523 8,250 8,250 ------------ ------------ 471,417 448,565 ============ ============ (2) Calculation of incremental shares resulting from conversion of common stock equivalents, using the Treasury Stock Method for calculating diluted earnings per share, is based on the greater of the average ending ask price or the closing ask price on March 31, 1998 and 1997, as reported on the American Stock Exchange. (3) 1997 amounts are restated to reflect the 10% stock dividend paid to stockholders of record as of March 31, 1998. -----END PRIVACY-ENHANCED MESSAGE-----