-----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, DWF4oQEe1N1vm9Hbw3s5q9Cc+4o3L/F718rZcEKJifiGeL1qqTFkGW5N7jGWHurx /pEcDjiPWsbrXGDzTx+Mcw== 0000818155-97-000011.txt : 19971111 0000818155-97-000011.hdr.sgml : 19971111 ACCESSION NUMBER: 0000818155-97-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971110 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WALSHIRE ASSURANCE COMPANY CENTRAL INDEX KEY: 0000818155 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 232023240 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16267 FILM NUMBER: 97710946 BUSINESS ADDRESS: STREET 1: 3350 WHITEFORD RD STREET 2: PO BOX 3849 CITY: YORK STATE: PA ZIP: 17402 BUSINESS PHONE: 7177570000 MAIL ADDRESS: STREET 1: 3350 WHITEFORD RD STREET 2: PO BOX 3849 CITY: YORK STATE: PA ZIP: 174020138 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 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 0-16267 WALSHIRE ASSURANCE COMPANY (Exact name of registrant as specified in its charter) Pennsylvania 23-2023240 (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification Number) 3350 Whiteford Road, P. O. Box 3849, York, PA 17402-0138 (Address of principal executive offices) (Zip code) (717)757-0000 (Registrant s telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) 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 Indicate the number of shares outstanding of each of the issuer s classes of common stock, as of the latest practical date. Class: Outstanding at October 31, 1997: Common stock - $.01 Par Value 4,683,653 shares WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES INDEX PAGE NUMBER Part I FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets as of September 30, 1997 (unaudited) and December 31, 1996. . . . . . . . . . . 2 Consolidated Statements of Income for the three months ended September 30, 1997 and 1996 (unaudited) . 4 Consolidated Statements of Income for the nine months months ended September 30, 1997 and 1996 (unaudited) . 5 Consolidated Statements of Cash Flows for the nine months ended September 30, 1997 and 1996 (unaudited) . 6 Notes to Consolidated Financial Statements (unaudited) . . . . . . . . . . . . . . . . . . . . . 7 Item 2. Management s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . 9 Part II OTHER INFORMATION . . . . . . . . . . . . . . . . . . 11 Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . 11 Item 2. Changes in Securities . . . . . . . . . . . . . . . . 11 Item 3. Defaults Upon Senior Securities . . . . . . . . . . . 11 Item 4. Submission of Matters to Vote of Security Holders. . . 11 Item 5. Other Information . . . . . . . . . . . . . . . . . . 11 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 11 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 1 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except per share data) September 30, December 31, Assets 1997 1996 (Unaudited) Investments: Held to maturity, at amortized cost: Fixed maturities (fair value $18,118 and $18,158) . . . . . . . . . . . . . . . . $ 17,706 $ 17,923 Available for sale, at fair value: Fixed maturities (cost $40,129 and $37,512) . . . . . . . . . . . . . . . . 40,585 37,356 Equity securities (cost $10,259 and $8,711). . . . . . . . . . . . . . . . . 10,517 8,930 Short-term investments . . . . . . . . . . . . 2,987 4,758 Other investments. . . . . . . . . . . . . . . 2,050 2,051 Total investments . . . . . . . . . . . . . 73,845 71,018 Cash. . . . . . . . . . . . . . . . . . . . . . . 494 637 Accrued investment income receivable. . . . . . . 829 847 Amounts receivable from reinsurers. . . . . . . . - 1,837 Amounts receivable from reinsured company . . . . 546 563 Agents balances (net of allowance for doubtful accounts of $120). . . . . . . . . . . . . . . 7,307 8,501 Installment premiums receivable . . . . . . . . . 6,913 8,514 Agents balances and installment premiums receivable from related parties. . . . . . . . 2,023 3,073 Premium finance receivables (net of unearned finance charges and allowance for credit losses of $103 and $109) . . . . . . . . . . . 4,547 4,836 Reinsurance receivable. . . . . . . . . . . . . . 27,564 19,699 Deferred acquisition costs. . . . . . . . . . . . 4,632 5,193 Property and equipment, (net of accumulated depreciation of $2,076 and $1,725) . . . . . . 3,615 4,526 Other assets. . . . . . . . . . . . . . . . . . . 1,999 1,692 Total assets. . . . . . . . . . . . . . . . $134,314 $130,936 See accompanying notes to consolidated financial statements. 2 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES Consolidated Balance Sheets, Continued (In thousands, except per share data) September 30, December 31, Liabilities and Shareholders Equity 1997 1996 (Unaudited) Liabilities: Unpaid claims and claim settlement expenses. $ 42,567 $ 36,551 Unearned premiums. . . . . . . . . . . . . . 27,907 33,250 Amounts payable to reinsurers. . . . . . . . 3 902 - Short-term notes payable . . . . . . . . . . 5,206 7,293 Long-term notes payable. . . . . . . . . . . 688 1,076 Deposits by insureds . . . . . . . . . . . . 2,184 2,380 Commissions payable to agents. . . . . . . . 1,321 1,681 Commissions payable to related parties . . . 221 401 Other liabilities. . . . . . . . . . . . . . _ 1,959 1,470 Total liabilities . . . . . . . . . . . . 85,955 84,102 Shareholders equity: Preferred stock, par value $.01 per share; 2,000 shares authorized; 128 shares issued and outstanding. . . . . . . . . . 1 1 Common stock, par value $.01 per share; 10,000 shares authorized; 4,682 and 4,651 shares issued and outstanding . . . 47 47 Additional paid-in capital . . . . . . . . . 38,796 38,648 Unrealized gains on investments available for sale (net of deferred taxes of $243 and $21). . . . . . . . . . . . . . . . . 471 42 Retained earnings. . . . . . . . . . . . . . 9,044 8,096 Shareholders equity. . . . . . . . . . . 48,359 46,834 Total liabilities and shareholders equity . $134,314 $130,936 See accompanying notes to consolidated financial statements. 3 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) Three Months Ended September 30,_____ 1997 1996 (Unaudited)(Unaudited) Revenues: Premiums earned . . . . . . . . . . . . . . . . . $16,464 $ 14,622 Premiums ceded. . . . . . . . . . . . . . . . . . ( 7,091) ( 2,956) Net premiums earned . . . . . . . . . . . . . . . 9,373 11,666 Net investment income . . . . . . . . . . . . . . 1,110 821 Net realized gains on investments . . . . . . . . 842 272 Other . . . . . . . . . . . . . . . . . . . . . . 261 166 Total revenues . . . . . . . . . . . . . . . . 11,586 12,925 Expenses: Claims and claim settlement expenses. . . . . . . 12,120 9,509 Reinsurance recoveries. . . . . . . . . . . . . . ( 5,484) ( 1,773) Net claims and claim settlement expenses. . . . . 6,636 7,736 Amortization of deferred acquisition costs. . . . 1,257 1,909 Underwriting, general and administrative expenses. . . . . . . . . . . . . . . . . . . . 1,889 2,055 Dividends to policyholders. . . . . . . . . . . . 213 - Interest. . . . . . . . . . . . . . . . . . . . . 178 118 Total expenses . . . . . . . . . . . . . . . . 10,173 11,818 Income before income taxes . . . . . . . . . . . . . 1,413 1,107 Provision for income taxes . . . . . . . . . . . . . 366 172 Net income . . . . . . . . . . . . . . . . . . . . . 1,047 935 Less dividends on convertible preferred stock. . . . 104 104 Net income available for common stock. . . . . . . . $ 943 $ 831 Net income per common share and common equivalent share: Primary: Net income . . . . . . . . . . . . . . . . . . $ .20 $ .17 Weighted average shares outstanding. . . . . . 4,784 4,778 Fully diluted: Net income . . . . . . . . . . . . . . . . . . $ .19 $ .17 Weighted average shares outstanding. . . . . . 5,388 5,375 See accompanying notes to consolidated financial statements. 4 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) Nine Months Ended September 30, _ 1997 1996 (Unaudited)(Unaudited) Revenues: Premiums earned . . . . . . . . . . . . . . . . . $48,014 $ 42,799 Premiums ceded. . . . . . . . . . . . . . . . . . (15,316) ( 9,015) Net premiums earned . . . . . . . . . . . . . . . 32,698 33,784 Net investment income . . . . . . . . . . . . . . 3,161 2,294 Net realized gains on investments . . . . . . . . 2,235 1,041 Other . . . . . . . . . . . . . . . . . . . . . . 593 528 Total revenues . . . . . . . . . . . . . . . . 38,687 37,647 Expenses: Claims and claim settlement expenses. . . . . . . 34,812 26,276 Reinsurance recoveries. . . . . . . . . . . . . . (10,483) ( 3,462) Net claims and claim settlement expenses. . . . . 24,329 22,814 Amortization of deferred acquisition costs. . . . 4,585 5,295 Underwriting, general and administrative expenses. . . . . . . . . . . . . . . . . . . . 6,246 5,743 Dividends to policyholders. . . . . . . . . . . . 213 117 Interest. . . . . . . . . . . . . . . . . . . . . 543 291 Total expenses . . . . . . . . . . . . . . . . 35,916 34,260 Income before income taxes . . . . . . . . . . . . . 2,771 3,387 Provision for income taxes . . . . . . . . . . . . . 600 554 Net income . . . . . . . . . . . . . . . . . . . . . 2,171 2,833 Less dividends on convertible preferred stock. . . . 312 320 Net income available for common stock. . . . . . . . $ 1,859 $ 2,513 Net income per common share and common equivalent share: Primary: Net income . . . . . . . . . . . . . . . . . . $ .39 $ .53 Weighted average shares outstanding. . . . . . 4,803 4,778 Fully diluted: Net income . . . . . . . . . . . . . . . . . . $ .39 $ .53 Weighted average shares outstanding. . . . . . 4,803 5,385 See accompanying notes to consolidated financial statements. 5 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) except per share data) Nine Months Ended September 30, ____ 1997 1996 (Unaudited) (Unaudited) Cash flows from operating activities: Net income . . . . . . . . . . . . . . . . . . . . $ 2,171 $ 2,833 Adjustments to reconcile net income to net cash provided by operating activities Net realized gains on investments. . . . . . . ( 2,235) ( 1,041) Decrease (increase) in assets: Accrued investment income receivable. . . . . 18 ( 52) Amounts receivable from reinsurers. . . . . . 1,837 998 Amounts receivable from reinsured company . . 17 ( 37) Agents balances and installment premiums receivable . . . . . . . . . . . . . . . . . 2,795 ( 2,203) Agents balances and installment premiums receivable from related parties. . . . . . . 1,050 ( 713) Premium finance receivables . . . . . . . . . 289 1,162 Reinsurance receivables . . . . . . . . . . . ( 7,865) (11,008) Deferred acquisition costs. . . . . . . . . . 561 ( 112) Other, net. . . . . . . . . . . . . . . . . . 204 ( 554) (Decrease) increase in liabilities: Unpaid claims, claim settlement expenses and claim drafts outstanding . . . . . . . . . . 6,016 13,588 Unearned premiums . . . . . . . . . . . . . . ( 5,343) 4,214 Amounts payable to reinsurers . . . . . . . . 3,902 --- Deposits by insureds. . . . . . . . . . . . . ( 196) 403 Other, net. . . . . . . . . . . . . . . . . . ( 38) 603 Net cash provided by operating activities. . . . . 3,183 8,081 Cash flows from investing activities: Purchase of investments: Held to maturity . . . . . . . . . . . . . . . . ( 2,338) ( 3,713) Available for sale . . . . . . . . . . . . . . . (27,784) (12,755) Sale of investments: Available for sale . . . . . . . . . . . . . . . 24,273 4,703 Maturity of investments. . . . . . . . . . . . . . 4,010 4,267 Net (purchase) sale of short term and other investments. . . . . . . . . . . . . . . . . . . 1,801 ( 2,939) Purchase of property and equipment . . . . . . . . ( 216) ( 1,301) Sale of property and equipment . . . . . . . . . . 616 9 Other, net . . . . . . . . . . . . . . . . . . . . ( 137) 403 Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . 225 (11,326) Cash flows from financing activities: Cash dividends paid. . . . . . . . . . . . . . . . ( 1,223) ( 1,128) Issuance of common stock . . . . . . . . . . . . . 148 890 Proceeds from notes payable . . . . . . . . . . . --- 4,159 Payment of notes payable . . . . . . . . . . . . . ( 2,476) ( 360) Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . ( 3,551) 3,561 Net increase (decrease) in cash . . . . . . . . . . ( 143) 316 Cash at beginning of the period. . . . . . . . . . . 637 99 Cash at end of the period. . . . . . . . . . . . . . $ 494 $ 415 See accompanying notes to consolidated financial statements. 6 WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. The consolidated balance sheet as of September 30, 1997, the consolidated statements of income for the three and nine months ended September 30, 1997 and 1996, and the consolidated statements of cash flows for the nine months then ended have been prepared by Walshire Assurance Company ( the Company ) without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 1997 and for all periods presented, have been made. 2. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. It is suggested that these unaudited consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company s 1996 Annual Report. The results of operations for the period ended September 30, 1997 are not necessarily indicative of the results of operations for the full year. 3. Net income per common share is computed after recognition of preferred stock dividend requirements and is based on the weighted average number of shares of common stock and common stock equivalents outstanding. The number of common shares was increased by the number of shares issuable on the exercise of options when the market price of the common stock exceeds the exercise price of the options. This increase in the number of common shares was reduced by the number of common shares that are assumed to have been purchased with the proceeds from the exercise of the options; these purchases were assumed to have been made at the average price of the common stock during that part of the year when the market price of the common stock exceeded the exercise price of the options. Fully diluted net income per share was determined on the assumption that the convertible preferred stock was converted and the outstanding stock options were exercised on January 1, 1997 and 1996. As to the preferred stock, net income was adjusted for dividends declared. As to the options, outstanding shares were increased as described above except that purchases of common stock are assumed to have been made at the higher of the period-end price or the average price of the common stock during that part of the year when the market price of the common stock exceeded the exercise price of the options. FASB Statement No. 128, Earnings Per Share (Statement 128) supersedes APB Opinion No. 15, Earnings Per Share, and specifies the computation, presentation, and disclosure requirements for earnings per share (EPS) for entities with publicly held common stock or potential common stock. Statement 128 was issued to simplify the computation of EPS and to make the U.S. standard more compatible with the EPS standards of other countries and that of the International Accounting Standards Committee (IASC). It also requires dual presentation of Basic EPS and Diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the Basic EPS computation to the numerator and denominator of the Diluted EPS computation. 7 Basic EPS, unlike Primary EPS, excludes all dilution while Diluted EPS, like Fully Diluted EPS, reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. For many entities Basic EPS will be higher than Primary EPS and Diluted EPS will be approximately the same as Fully Diluted EPS. Statement 128 is effective for financial statements for both interim and annual periods ending after December 15, 1997. Management does not expect that the adoption of Statement 128 will have a material impact on its earnings per share. FASB Statement No. 130, "Comprehensive Income", was issued and established standards for the reporting and disclosure of comprehensive income and its components (revenues, expenses, gains and losses). The statement requires that all items that are required to be recognized under accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. The statement requires that an enterprise (a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other comprehensive income separately from retained earnings and additional paid- in capital in the equity section of a statement of financial position. The statement is effective for fiscal years beginning after December 15, 1997. The Company will adopt the statement in 1998. FASB Statement No. 131, "Disclosures about Segments of an Enterprise and Related Information", was issued and established standards for the way that public business enterprises report information about operating segments in annual financial statements. The statement requires that those enterprises report selected information about operating segments in interim financial reports issued to stockholders. It also establishes standards for related disclosures about products and services, geographic areas and major customers. The statement is effective for fiscal years beginning after December 15, 1997. The Company is in the process of determining the effect of this statement upon its financial reporting requirements. 4. Forward Looking Statements. The information contained in this Quarterly Report contains forward looking statements (as such term is defined in the Securities Exchange Act of 1934 and the regulations thereunder), including without limitation, statements as to the allowances for doubtful accounts and credit losses, the provision for unpaid claims and claim settlement expenses, the classification of the Company's investment portfolio and other statements as to management's beliefs, expectations or opinions. Such forward looking statements are subject to risks and uncertainties and may be affected by various factors which may cause actual results to differ materially from those in the forward looking statements. Certain of these risks, uncertainties and other factors are discussed in this Quarterly Report or in the Company's Annual Report on Form 10-K for the year ended December 31, 1996, a copy of which may be obtained from the Company upon request and without charge (except for the exhibits thereto). 5. Investment Considerations. In analyzing whether to make, or to continue, an investment in the Company, investors should consider, among other factors, certain investment considerations more particularly described in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. 8 Item 2. Management s Discussion and Analysis of Financial Condition and Results of Operations Revenues for the three month period ended September 30, 1997 decreased $1.3 million, or 10.4%, from revenues for the three month period ended September 30, 1996. This decrease was primarily the result of a decrease in net premiums earned, offset, in part, by an increase in net realized gains on investments. Even though net premiums earned decreased, premiums earned in the third quarter of 1997 increased $1.8 million, or 12.6%, over premiums earned in the same period in 1996 due to a greater amount of in force premiums in the third quarter of 1997. The decrease in net premiums earned is a result of the Company ceding more premiums to reinsurers in the current year than it did in 1996. Direct premiums written decreased $2.3 million, or 17.1%, in the three month period ended September 30, 1997 when compared to the same period in 1996. The following table sets forth the direct premiums written by the Company for the three month periods ended September 30, 1997 and 1996 by line of business. (In thousands) Three months ended September 30, 1997 1996 %Change Auto liability $ 4,282 $ 5,092 ( 15.9%) Auto physical damage 3,192 4,980 ( 35.9%) Workers compensation 858 1,955 ( 56.1%) Inland marine 606 752 ( 19.4%) Homeowners 793 - N/M Other 1,223 437 179.9% Total $10,954 $13,216 ( 17.1%) Expenses for the three month period ended September 30, 1997 decreased $1.6 million, or 13.9%, over expenses for the three month period ended September 30, 1996. The decrease was primarily the result of a decrease in net claims and claim settlement expenses and amortization of deferred acquisition costs. The decrease in net claims and claim settlement expenses was the result of a decrease in net premiums earned, offset, in part, by an increase in the statutory loss ratio from 67.7% in 1996 to 72.1% in 1997. The increase in the loss ratio was due primarily to increases in the loss ratio of the Company's auto liability and auto physical damage products, offset, in part, by a reduction in the provision for workers' compensation claims. The decrease in the amortization of deferred acquisition costs was primarily the result of the decrease in net premiums earned and an increase in ceding commission income. The statutory combined ratio for the three month period ended September 30, 1997 was 108.1%, an increase from 99.4% for the three month period ended September 30, 1996. Revenues for the nine month period ended September 30, 1997 increased $1.0 million, or 2.8%, from revenues for the nine month period ended September 30, 1996. This increase was primarily the result of increases in net investment income and net realized gains on investments, offset, in part, by a decrease in net premiums earned. Even through net premiums earned decreased, premiums earned in the first nine months of 1997 increased $5.2 million, or 12.2%, over premiums earned in the same period in 1996 due to a greater amount of in force premiums in the current year. The decrease in net premiums earned is a result of the Company ceding more premiums to reinsurers in the current year than it did in 1996. Direct premiums written decreased $.9 million, or 2.1%, in the nine month period ended September 30, 1997 when compared to the same period in 1996. The following table sets forth the direct premiums written by the Company for the nine month periods ended September 30, 1997 and 1996 by line of business. 9 (In thousands) Nine months ended September 30, 1997 1996 %Change Auto liability $18,540 $18,211 1.8% Auto physical damage 12,727 16,390 ( 22.3%) Workers compensation 2,813 5,066 ( 44.5%) Inland marine 2,365 2,491 ( 5.1%) Homeowners 2,132 - N/M Other 3,488 802 334.9% Total $42,065 $42,960 ( 2.1%) Expenses for the nine month period ended September 30, 1997 increased $1.7 million, or 4.8%, over expenses for the nine month period ended September 30, 1996. The increase was primarily the result of increases in net claims and claim settlement expenses and underwriting, general and administrative expenses, offset, in part, by a decrease in the amortization of deferred acquisition costs. Increases in net claims and claim settlement expenses were the result of an increase in the statutory loss ratio from 68.9% in 1996 to 75.8% in 1997. The increase in the loss ratio was due primarily to increases in the loss ratio of the Company's auto liability and auto physical damage products, offset, in part, by a reduction in the provision for workers' compensation claims. Increases in underwriting, general and administrative expenses were primarily the result of the additional operating expenses of Yorktowne Insurance Company, which was acquired on September 30, 1996. The decrease in the amortization of deferred acquisition costs was primarily the result of increases in ceding commission income and decreases in net premiums earned. The statutory combined ratio for the nine month period ended September 30, 1997 was 110.1%, an increase from 98.4% for the nine month period ended September 30, 1996. Liquidity and Capital Resources Historically, the Company has generated funds sufficient to support its operations and has maintained a high degree of liquidity in its investment portfolio. The primary sources of funds to meet the demands of claim settlements and operating expenses are premiums, ceding commissions, investment income and existing lines of credit. The Company s funds generally are invested in securities with maturities intended to provide adequate funds to pay claims and expenses without the forced sale of investments. The Company believes that its current cash and short term investments, together with funds generated from operations, will be sufficient to meet its operating and capital requirements for the foreseeable future. 10 Part II OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matter to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K Exhibits (a) Exhibit 27.1 Financial data schedule Reports on Form 8-K None 11 SIGNATURES Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WALSHIRE ASSURANCE COMPANY (Registrant) DATE: November 5, 1997 /s/ Kenneth R. Taylor Kenneth R. Taylor President and Chief Executive Officer DATE: November 5, 1997 /s/ Gary J. Orndorff Gary J. Orndorff Vice President/Treasurer and Chief Financial Officer 12 SIGNATURES Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WALSHIRE ASSURANCE COMPANY (Registrant) DATE: November 5, 1997 __________________________ Kenneth R. Taylor President and Chief Executive Officer DATE: November 5, 1997 __________________________ Gary J. Orndorff Vice President/Treasurer and Chief Financial Officer 12 EX-27 2
7 9-MOS DEC-31-1997 SEP-30-1997 40,585 17,706 18,118 10,517 101 0 73,845 494 546 4,632 134,314 42,567 27,907 0 2,184 5,894 47 0 1 48,311 134,314 32,698 3,161 2,235 593 24,329 4,585 6,246 2,771 600 0 0 0 0 2,171 .39 .39 36,552 22,872 1,294 11,568 10,076 42,567 0
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