-----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, RHGfBXcbAAhiRzZA68WhPyCcu2/gH76xSHhrgeWHWPjUtAjLensCFEmtYpOGI0aW 2K00sl7q61yaM4gMHb7enQ== 0000950134-97-004901.txt : 19970627 0000950134-97-004901.hdr.sgml : 19970627 ACCESSION NUMBER: 0000950134-97-004901 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970626 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN EAGLE GROUP INC CENTRAL INDEX KEY: 0000882800 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 752100622 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 001-12922 FILM NUMBER: 97629798 BUSINESS ADDRESS: STREET 1: 12801 N CENTRAL EXPRWY STREET 2: STE 800 CITY: DALLAS STATE: TX ZIP: 75243 BUSINESS PHONE: 2144481400 MAIL ADDRESS: STREET 1: 12801 N CENTRAL EXPRESSWAY STREET 2: STE 800 CITY: DALLAS STATE: TX ZIP: 75243 10-K405/A 1 AMENDMENT NO. 1 TO FORM 10-K - FYE 12/31/96 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------- FORM 10-K/A Amendment No. 1 to ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 --------------------------- FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 COMMISSION FILE NO. 1-12922 AMERICAN EAGLE GROUP, INC. (Exact Name of registrant as Specified in its Charter) DELAWARE 75-2100622 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) 12801 NORTH CENTRAL EXPRESSWAY SUITE 800 DALLAS, TEXAS 75243 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (972) 448-1400 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED ------------------- ------------------- COMMON STOCK, $0.01 PAR VALUE NEW YORK STOCK EXCHANGE SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] The aggregate market value of the voting stock held by non-affiliates of the Registrant as of March 21, 1997 was $12,501,152 based upon a closing price of $4.00 per share. As of March 21, 1997, there were 7,047,098 shares of the Registrant's Common Stock, $.01 par value per share, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Certain exhibits to Registrant's Form S-1 filed with the S.E.C. and effective May 11, 1994 (File No. 33-75490) are incorporated by reference into Part IV. 2 The purpose of this Form 10-K/A is to refile pages 23, 36 and 43 of the Form 10-K for the fiscal year ended December 31, 1996 of American Eagle Group, Inc. to correct typographical errors contained in the EDGAR filing of such Form 10-K. 3 AMERICAN EAGLE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (In Thousands Except Per Share Data)
1996 1995 1994 ----------- ----------- ----------- Revenues: Earned Premiums, Net $ 107,217 $ 102,447 $ 82,725 Agency Operations, Net 424 396 919 Investment Income, Net 4,470 5,497 4,106 Realized Investment Gains (Losses), Net (74) 496 (33) ----------- ----------- ----------- Total Revenues 112,037 108,836 87,717 ----------- ----------- ----------- Expenses: Losses and Loss Adjustment Expenses, Net of Reinsurance 107,473 90,933 52,729 Policy Acquisition and Other Underwriting Expenses 47,848 37,292 23,694 Interest Expense 1,132 987 800 ----------- ----------- ----------- Total Expenses 156,453 129,212 77,223 ----------- ----------- ----------- Income (Loss) Before Income Tax Provision (Benefit) (44,416) (20,376) 10,494 Income Tax Provision (Benefit) -- (7,300) 3,351 Net Income (Loss) $ (44,416) $ (13,076) $ 7,143 =========== =========== =========== Net Income (Loss) Available for Common Stockholders $ (44,514) $ (13,174) $ 6,588 =========== =========== =========== Net Income (Loss) Per Common Share (Primary and Fully Diluted) $ (6.32) $ (1.87) $ 1.16 =========== =========== =========== Weighted Average Number of Common Shares Outstanding (Primary and Fully Diluted) 7,048,898 7,052,998 5,684,386 =========== =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 36 4 ITEM 6: SELECTED FINANCIAL DATA (Dollars in Thousands Except Per Share Amounts)
FOR THE YEAR 1990 1991 1992 1993 1994 1995 1996 ---- ---- ---- ---- ---- ---- ---- Gross premiums produced (1) $ 94,565 $ 103,752 $ 114,750 $ 139,847 $ 167,207 $ 181,561 $ 151,182 Net premiums written $ 7,350 $ 30,895 $ 51,250 $ 71,869 $ 95,997 $ 120,957 $ 96,229 Earned premiums $ 6,874 $ 16,592 $ 43,725 $ 66,091 $ 82,725 $ 102,447 $ 107,217 Net investment income $ 4,784 $ 3,299 $ 2,880 $ 2,918 $ 4,106 $ 5,497 $ 4,470 Realized investment gains (losses) $ 202 $ 1,719 $ 1,622 $ 1,414 $ (33) $ 496 $ (74) Interest expense $ 1,465 $ 682 $ 462 $ 708 $ 800 $ 987 $ 1,132 Operating income (loss) $ 3,653 $ 1,530 $ 3,145 $ 4,799 $ 7,164 $ (13,394) $ (44,342) Income (loss) before extraordinary items and cumulative effect of change in accounting principle $ 3,784 $ 2,694 $ 4,199 $ 5,718 $ 7,143 $ (13,076) $ (44,416) Net income (loss) $ 3,784 $ 3,624 $ 6,079 $ 5,718 $ 7,143 $ (13,076) $ (44,416) Net income (loss) available for common stockholders(2) $ 3,784 $ 3,467 $ 4,781 $ 4,420 $ 6,588 $ (13,174) $ (44,514) Weighted average shares outstanding 3,091,493 3,469,448 3,469,448 3,469,448 5,684,386 7,052,998 7,048,898 Loss and LAE Ratio 83.6% 55.7% 57.7% 62.3% 63.7% 88.8% 100.2% Expense Ratio 65.7% 49.4% 38.2% 29.8% 28.6% 36.4% 44.6% -------- --------- --------- --------- --------- --------- ----------- Combined Ratio 149.3% 105.1% 95.9% 92.1% 92.3% 125.2% 144.8% ======== ========= ========= ========= ========= ========= =========== PER COMMON SHARE Operating income $ 1.18 $ 0.44 $ 0.91 $ 1.38 $ 1.26 $ (1.90) $ (6.29) Operating income (loss) for common stockholders (2) $ 1.18 $ 0.40 $ 0.53 $ 1.01 $ 1.16 $ (1.91) $ (6.30) Net income (loss) $ 1.22 $ 1.04 $ 1.75 $ 1.65 $ 1.26 $ (1.85) $ (6.30) Net income (loss) for common stockholders (2) $ 1.22 $ 1.00 $ 1.38 $ 1.27 $ 1.16 $ (1.87) $ (6.32) Stockholders' equity $ 4.34 $ 5.63 $ 7.00 $ 8.27 $ 9.12 $ 7.58 $ 1.06 Dividends declared $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.09 $ 0.13 $ 0.08 AT YEAR END Total cash and investments $ 65,741 $ 67,436 $ 48,064 $ 87,262 $ 98,181 $ 106,792 $ 89,087 Total assets $183,917 $ 211,646 $ 219,028 $ 299,622 $ 337,103 $ 318,269 $ 261,959 Reserve for loss and loss adjustment expenses $ 96,954 $ 102,979 $ 95,074 $ 122,342 $ 142,768 $ 136,528 $ 138,133 Note payable $ 9,945 $ 3,295 $ 10,000 $ 10,000 $ 9,250 $ 11,250 - Total liabilities $167,226 $ 180,470 $ 183,114 $ 259,285 $ 271,139 $ 263,174 $ 219,670 Redeemable preferred stock $ 1,629 $ 11,629 $ 11,629 $ 11,629 $ 1,629 $ 1,629 $ 34,793 Stockholders' equity $ 15,062 $ 19,547 $ 24,285 $ 28,708 $ 64,335 $ 53,466 $ 7,496 Total debt to equity 76.8% 76.3% 89.1% 75.3% 16.9% 24.1% 464.2% Return on average equity 34.1% 20.0% 21.8% 16.7% 14.2% (22.2)% (145.7)% SELECTED STATUTORY DATA Policyholders' surplus $ 28,376 $ 31,471 $ 40,204 $ 44,752 $ 65,107 $ 50,465 $ 20,351 Net premiums written to surplus 0.3x 0.9x 1.1x 1.6x 1.3x 2.3x 5.2x Loss and LAE Ratio 71.4% 53.7% 57.9% 63.1% 64.2% 89.8% 100.2% Expense Ratio 55.4% 38.2% 41.2% 30.0% 33.7% 34.9% 43.5% -------- --------- --------- --------- --------- --------- ----------- Combined Ratio 126.8% 91.9% 99.1% 93.2% 97.9% 124.7% 143.7% ======== ========= ========= ========= ========= ========= ===========
(1) For a discussion of gross premiums produced, see "Management's Discussion of Financial Condition and Results of Operations." (2) After deduction of preferred dividends. 23 5 3. INSURANCE OPERATIONS: Reinsurance Transactions In the ordinary course of business, AEIC and AMIC purchase reinsurance for the purpose of limiting their retained loss exposure and maintaining required statutory surplus amounts. Reinsurance does not relieve the Company from its liabilities under the original policies to the extent that the reinsuring companies fail to meet their obligations under reinsurance contracts. Management evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Management believes that the allowances at December 31, 1996, are adequate to cover known and anticipated losses. At December 31, 1996 and 1995, the Company's consolidated balance sheets reflected the following reinsurance recoverable balances and the related allowances for doubtful accounts:
1996 1995 --------- --------- Reinsurance recoverable $ 70,622 $ 101,941 Allowance for doubtful accounts (1,380) (816) --------- --------- Reinsurance recoverable, net $ 69,242 $ 101,125 ========= ========= The effect of reinsurance on premiums written and earned for the insurance operations is as follows: Written Earned --------- --------- For the year ended December 31, 1996- Direct premiums $ 130,198 $ 153,817 Reinsurance assumed 12,622 8,543 Reinsurance ceded (46,591) (55,143) --------- --------- Net premiums $ 96,229 $ 107,217 ========= ========= Percentage assumed of net 13% 8% ========= ========= For the year ended December 31, 1995- Direct premiums $ 166,001 $ 152,579 Reinsurance assumed 6,235 7,164 Reinsurance ceded (51,279) (57,296) --------- --------- Net premiums $ 120,957 $ 102,447 ========= ========= Percentage assumed of net 5% 7% ========= ========= For the year ended December 31, 1994- Direct premiums $ 151,875 $ 136,445 Reinsurance assumed 7,268 5,040 Reinsurance ceded (63,146) (58,760) --------- --------- Net premiums $ 95,997 $ 82,725 ========= ========= Percentage assumed of net 8% 6% ========= =========
The Company makes quarterly deposits for reinsurance contracts in the normal course of business. At December 31, 1996 and 1995, the Company had entered into reinsurance contracts with future deposits totaling $17,550 and $ 32,064, respectively. These deposits are generally payable in the first nine months of the subsequent year. 43 6 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. Dated: June 25, 1997 AMERICAN EAGLE GROUP, INC. BY: /s/ M. Philip Guthrie ------------------------------- M. Philip Guthrie, Chairman of the Board, Chief Executive Officer and President 73 -----END PRIVACY-ENHANCED MESSAGE-----