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, 1996
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 0-27146
AMERIN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 11-3085148
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 E. Randolph Drive, 49th Floor, Chicago, IL 60601-7125
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(312) 540-0078
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
---- -----
APPLICABLE ONLY TO ISSUER'S INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
---- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at August 1, 1996
----- -----------------------------
Voting Common Stock, $.01 par value 22,422,675
Nonvoting Common Stock, $.01 par 3,609,625
value
<PAGE>
AMERIN CORPORATION
Table of Contents
Page
----
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements:
Condensed Consolidated Balance Sheets at
June 30, 1996 (unaudited) and December 31, 1995 . . . . . . . . . . . 1
Condensed Consolidated Statements of Operations for the
Three and Six Month Periods Ended June 30, 1996 and 1995
(unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statements of Cash Flows for the
Six Month Periods Ended June 30, 1996 and 1995 (unaudited) . . . . . . 3
Notes to Condensed Consolidated Financial Statements (unaudited) . . . . 4
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . 5
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security-Holders . . . . . . . 10
ITEM 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . 10
i
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Amerin Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
June 30, December 31,
1996 1995
---------- ----------
(unaudited)
(in thousands of dollars)
Assets
Investments:
Fixed maturities available-for-sale at fair
value . . . . . . . . . . . . . . . . . . . $ 266,592 $ 151,021
Short-term investments . . . . . . . . . . 19,999 145,961
----------- ------------
Total investments . . . . . . . . . . . . . . 286,591 296,982
Cash and cash equivalents . . . . . . . . . . 1,500 1,054
Accrued investment income . . . . . . . . . . 4,281 2,376
Premiums receivable . . . . . . . . . . . . . 1,911 2,375
Deferred policy acquisition costs . . . . . . 4,670 4,419
Leasehold improvements, furniture and
equipment, at cost,
net of accumulated depreciation . . . . . . 4,002 4,199
Goodwill, net of accumulated amortization . . 2,356 2,431
Other intangibles, net of accumulated
amortization . . . . . . . . . . . . . . . . 317 478
Deferred income taxes . . . . . . . . . . . . 2,083 --
Other assets . . . . . . . . . . . . . . . . 2,379 2,014
----------- ------------
Total assets . . . . . . . . . . . . . . . . $ 310,090 $ 316,328
=========== ============
Liabilities and Common Stockholders' Equity
Liabilities:
Unearned premiums . . . . . . . . . . . . . . $ 15,269 $ 12,710
Loss reserves . . . . . . . . . . . . . . . . 11,879 7,092
Current income taxes . . . . . . . . . . . . 41 600
Deferred income taxes . . . . . . . . . . . . -- 1,783
Payable for securities . . . . . . . . . . . -- 15,724
Accrued expenses and other liabilities . . . 3,078 4,282
----------- ------------
Total liabilities . . . . . . . . . . . . . . 30,267 42,191
Common Stockholders' Equity:
Voting Common Stock, $.01 par, 50,000,000
shares authorized, 22,422,675 shares and
22,381,818 shares issued and outstanding
in 1996 and 1995, respectively . . . . . . 224 224
Nonvoting Common Stock, $.01 par, 50,000,000
shares authorized, 3,609,625 issued and
outstanding in 1996 and 1995 . . . . . . . 36 36
Additional paid-in capital . . . . . . . . . 315,173 314,614
Net unrealized investment gains (losses) . . (4,029) 3,229
Retained-earnings deficit . . . . . . . . . . (31,581) (43,966)
----------- ------------
Total common stockholders' equity . . . . . . 279,823 274,137
----------- ------------
Total liabilities and common stockholders'
equity . . . . . . . . . . . . . . . . . . . $ 310,090 $ 316,328
=========== ============
See accompanying notes.
1
<PAGE>
Amerin Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
Three months ended Six months ended
June 30, June 30,
------------------ ----------------
1996 1995 1996 1995
------- ------- ----- -----
(unaudited)
(in thousands of dollars, except per share data)
Revenues:
Net premiums written . . . . $ 16,129 $ 6,578 $ 29,436 $ 10,841
Increase in unearned premiums (1,374) (1,040) (2,559) (1,323)
------- ------- -------- --------
Net premiums earned . . . . . 14,755 5,538 26,877 9,518
Net investments income . . . 4,082 1,670 8,123 3,256
Realized investment gains
(losses) . . . . . . . . . . (266) 288 (221) 373
------- ------- -------- --------
Total revenues . . . . . . . . . 18,571 7,496 34,779 13,147
Expenses:
Losses Incurred . . . . . . . 4,350 1,657 8,366 2,253
Policy acquisition costs . . 2,157 1,713 4,111 3,565
Underwriting and other
expenses . . . . . . . . . . 2,742 1,635 5,100 3,256
------- ------- -------- --------
Total expenses . . . . . . . . . 9,249 5,005 17,577 9,074
------- ------- -------- --------
Net income before taxes . . . . . 9,322 2,491 17,202 4,073
Income taxes . . . . . . . . . . 2,611 -- 4,817 --
------- ------- -------- --------
Net income . . . . . . . . . . . 6,711 2,491 12,385 4,073
Pay-in-kind dividends on preferred
stock . . . . . . . . . . . . . . -- 1,418 -- 2,774
------- ------- -------- --------
Net income applicable to common
stockholders . . . . . . . . . . $6,711 $1,073 $12,385 $1,299
======= ======= ======== ========
Net income per common share . . . $0.25 $0.10 $0.47 $0.12
======= ======= ======== ========
Average common and common
equivalent shares
outstanding (in thousands) . . 26,344.6 10,545.2 26,345.0 10,545.4
See accompanying notes.
2
<PAGE>
Amerin Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Six months ended June 30,
------------------------
1996 1995
------- -------
(unaudited)
(in the thousands of dollars)
Cash flows from operating activities
Net Income . . . . . . . . . . . . . . . . . $ 12,385 $ 4,073
Adjustments to reconcile net income to net
cash provided by operating activities:
Change in:
Accrued investment income and premiums
receivable . . . . . . . . . . . . . . . (1,441) (980)
Loss reserves . . . . . . . . . . . . . 4,787 2,059
Unearned premiums . . . . . . . . . . . 2,559 1,323
Accounts payable and accrued expenses . (586) (623)
Federal income taxes . . . . . . . . . . (517) --
Policy acquisition costs deferred . . . . . . (4,011) (2,853)
Policy acquisition costs amortized . . . . . 3,760 2,329
Depreciation and other amortization . . . . . 561 428
Realized investment gains . . . . . . . . . . 221 (376)
Other items, net . . . . . . . . . . . . . . (104) (33)
-------- --------
Net cash provided by operating activities . . 17,614 5,347
-------- --------
Cash flows from investing activities
Purchase of:
Fixed maturity securities . . . . . . . . . (164,459) (34,519)
Property and equipment . . . . . . . . . . (660) (238)
Sale or maturity of:
Fixed maturity securities . . . . . . . . . 21,713 22,121
Short-term investments, net . . . . . . . . 125,960 7,181
-------- --------
Net cash used by investing activities . . . . (17,446) (5,455)
-------- --------
Financing activities
Issuance of common stock . . . . . . . . . 278 --
-------- --------
Net increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . . . . . . 446 (108)
Cash and cash equivalents at beginning of
period . . . . . . . . . . . . . . . . . . . 1,054 694
-------- --------
Cash and cash equivalents at end of period . $ 1,500 $ 586
======== ========
See accompanying notes.
3
<PAGE>
Amerin Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 1996
(Unaudited)
1. Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the requirements of Form 10-Q. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting only of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three and six month periods ended June 30, 1996, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1996. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
Net Income Per Common Share
Net income per share of common stock is determined by dividing net income, less
dividends on preferred stock, by the weighted-average number of shares of common
stock and common stock equivalents (dilutive stock options) outstanding. For
1996, the weighted average shares of common stock includes 13,340,000 shares
issued on November 28, 1995, in conjunction with Amerin Corporation's (the
Company's) initial public offering in November 1995 (Initial Public Offering).
Weighted average shares of common stock in 1996 also includes 2,250,068 shares
as of November 28, 1995 out of a total of 11,000,000 shares that were previously
excluded from weighted average shares due to the fact that such shares were
subject to contingent recall provisions and the conditions required for the
removal of the recall provisions on the 11,000,000 shares had not been met. The
Company's Initial Public Offering removed the recall provisions on 2,250,068 of
the 11,000,000 shares and resulted in the cancellation of the remaining
8,749,932 shares.
Where the effect of common stock equivalents on net income per share would be
antidilutive, they are excluded from the weighted average number of shares
outstanding. Common stock awards and options issued in the 12 months prior to
the Company's Initial Public Offering are treated as common stock equivalents
for 1995. Fully diluted net income per share is equal to primary net income per
share for the three and six month periods ended June 30, 1996 and 1995.
2. Income Taxes
The provision for income taxes varies from the statutory federal income tax rate
applied to income before income taxes principally due to tax exempt interest
and, in 1995, the effects of net operating loss carryforwards.
4
<PAGE>
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Three Months Ended June 30, 1996 Compared to Three Months Ended June 30,
1995. Net premiums written for the three months ended June 30, 1996 were $16.1
million compared to $6.6 million for the three months ended June 30, 1995, which
represents a 145% increase. The increase was primarily attributable to a 66%
increase in new insurance written and growth in insurance in force and related
renewal premiums of Amerin Guaranty Corporation ("Amerin Guaranty"). Management
believes that Amerin Guaranty was able to increase revenues due primarily to
increased use by existing lenders of the Company's borrower-paid mortgage
insurance, which was introduced nationwide in February 1994 at rates which the
Company believes are lower than those generally offered by other mortgage
insurance companies, the addition of new, large lenders which began doing
business with the Company during the second half of 1995 and increased sales of
lender paid mortgage insurance. The increase in net premiums written was also
due to higher average premiums during the three months ended June 30, 1996
compared to the same period in 1995, principally due to the increased coverage
requirements introduced by Fannie Mae and Freddie Mac during the first quarter
of 1995, which requirements took effect over the course of 1995. Amerin
Guaranty's monthly premium plan represented 87% of new insurance written for the
three months ended June 30, 1996 compared to 82% for the same period in 1995.
Renewal premiums for the three months ended June 30, 1996 increased 203% from
the comparable prior year period due primarily to the growth of insurance in
force throughout 1995, as well as increased popularity of the monthly premium
plan.
Net premiums earned increased by $9.2 million to $14.8 million for the three
months ended June 30, 1996 from $5.6 million for the three months ended June 30,
1995. This increase was primarily due to the increase in insurance written and
in force in the 1996 period over the corresponding portion of the 1995 period.
Net investment income of $4.1 million for the three months ended June 30,
1996 increased by $2.4 million (or 144%) over the same period in 1995 primarily
due to investment of the proceeds from the Company's initial public offering in
November 1995 (the "Initial Public Offering"), which resulted in an increase of
178% in the monthly average amount of invested assets. Realized investment
losses for the three months ended June 30, 1996 were $0.3 million compared to
realized investment gains of $0.3 million for the same period in 1995. This
change was due primarily to the sale of a fixed income security with a low yield
relative to the prevailing interest rate environment, as well as the reduced
activity within the existing portfolio required to maintain the desired
composition of the portfolio in accordance with the Company's investment
strategy.
Losses incurred in the three months ended June 30, 1996 were $4.3 million,
compared to $1.7 million of losses incurred in the three months ended June 30,
1995, as a result of the aging of the Company's policies. Because of the
Company's limited operating history, its loss experience is expected to
significantly increase as its policies age further. Policy
5
<PAGE>
acquisition costs during the three months ended June 30, 1996 of $2.2 million
increased by $0.5 million (or 26%) compared to the same period in 1995
principally due to the growth in the level of marketing and underwriting
activity in connection with the increased production of new insurance written in
the 1996 period compared to the prior year period. Underwriting and other
expenses increased by $1.1 million (or 68%) for the three months ended June 30,
1996 over the same period in 1995 due to the institution of an excess loss
treaty, the increase in insurance in force and increases in various
administrative and occupancy costs relating to growth in the Company's
personnel.
The Company's effective tax rate was 28% in the three months ended June 30,
1996, compared to 0% in the same period in 1995. The increase in the
effective tax rate resulted from the fact that the Company fully utilized its
net operating losses in 1995 and no additional net operating losses were
available for utilization in 1996. The effective tax rate for the second
quarter of 1996 was below the statutory rate of 35%, reflecting the benefits of
tax-preferenced investment income.
As a result of the foregoing factors, the Company had net income of $6.7
million for the three months ended June 30, 1996, compared to net income before
pay-in-kind dividends on its previously outstanding 13.5% Cumulative Preferred
Stock of $2.5 million for the same period in 1995. Net income applicable to
common stockholders (after pay-in-kind dividends) was $1.1 million for the
second quarter of 1995. The 13.5% Cumulative Preferred Stock was redeemed in
connection with the Initial Public Offering.
Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995.
Net premiums written for the six months ended June 30, 1996 were $29.4 million
compared to $10.8 million for the six months ended June 30, 1995 which
represents a 172% increase. The increase was primarily attributable to an 80%
increase in Amerin Guaranty's new insurance written and growth in insurance in
force and related renewal premiums. Management believes that Amerin Guaranty
was able to increase revenues due primarily to increased use by existing lenders
of the Company's borrower-paid mortgage insurance, which was introduced
nationwide in February 1994 at rates which the Company believes are lower than
those generally offered by other mortgage insurance companies, the addition of
new, large lenders which began doing business with the Company during the second
half of 1995 and increased sales of lender paid mortgage insurance. The
increase in net premiums written was also due to higher average premiums during
the six months ended June 30, 1996 compared to the first six months of 1995,
principally due to the increased coverage requirements introduced by Fannie Mae
and Freddie Mac during the first quarter of 1995, which requirements took effect
over the course of 1995. Amerin Guaranty's monthly premium plan represented 85%
of new insurance written for the six months ended June 30, 1996 compared to 80%
for the same period in 1995. Renewal premiums for the six months ended June 30,
1996 increased 244% from the comparable prior year period due primarily to the
growth of insurance in force throughout 1995, as well as increased popularity of
the monthly premium plan.
Net premiums earned increased by $17.4 million to $26.9 million for the six
months ended June 30, 1996 from $9.5 million for the six months ended June 30,
1995. This
6
<PAGE>
increase was primarily due to the increase in insurance written and in force in
the 1996 period over the corresponding portion of the 1995 period.
Net investment income of $8.1 million for the first six months of 1996
increased by $4.9 million (or 149%) over the first six months of 1995 primarily
due to investment of the proceeds from the Initial Public Offering, which
resulted in an increase of 177% in the monthly average amount of invested
assets. Realized investment losses for the first six months of 1996 were $0.2
million compared to realized investment gains of $0.4 million for the first six
months of 1995. This change was due primarilly to the sale of a fixed income
security with a low yield relative to the prevailing interest rate environment,
as well as the reduced activity within the existing portfolio required to
maintain the desired composition of the overall portfolio in accordance with the
Company's investment strategy. As of June 30, 1996 and 1995, the yields to
maturity in the investment portfolio were 5.7% and 6.5%, respectively, and the
average durations of the investment portfolio were 6.5 years and 4.9 years,
respectively.
Losses incurred in the first six months of 1996 were $8.4 million, compared
to $2.3 million of losses incurred in the first six months of 1995 as a result
of the aging of the Company's policies. Because of the Company's limited
operating history, its loss experience is expected to significantly increase as
its policies age further. Policy acquisition costs during the first six months
of 1996 of $4.1 million increased by $0.5 million (or 15%) compared to the first
six months of 1995 principally due to the growth in the level of marketing and
underwriting activity in connection with the increased production of new
insurance written in the 1996 period compared to the prior year period.
Underwriting and other expenses increased by $1.8 million (or 57%) for the first
six months of 1996 over the first six months of 1995 due to the institution of
an excess loss treaty, the increase in insurance in force and increases in
various administrative and occupancy costs relating to growth in the Company's
personnel.
The effective tax rate was 28% in the six months ended June 30, 1996,
compared to 0% in the first six months of 1995. The increase in the effective
tax rate resulted from the fact that the Company fully utilized its net
operating losses in 1995 and no additional net operating losses were available
for utilization in the first six months of 1996. The effective tax rate for the
first quarter of 1996 was below the statutory rate of 35%, reflecting the
benefits of tax-preferenced investment income.
As a result of the foregoing factors, the Company had net income of $12.4
million for the first six months of 1996, compared to net income before pay-in-
kind dividends on its previously outstanding 13.5% Cumulative Preferred Stock of
$4.1 million for the first six months of 1995. Net income applicable to common
stockholders (after pay-in-kind dividends) was $1.3 million for the first six
months of 1995. The 13.5% Cumulative Preferred Stock was redeemed in connection
with the Initial Public Offering.
7
<PAGE>
Liquidity and Capital Resources
The liquidity and capital resources considerations are different for Amerin
Corporation and its principal insurance operating subsidiary, Amerin Guaranty,
as discussed below.
Amerin Corporation is a holding company whose principal assets are its
investments in Amerin Guaranty and Amerin Re Corporation ("Amerin Re"). Amerin
Corporation has no operations of its own and no employees and has only limited
needs for liquidity to meet certain legal, accounting, tax and administrative
expenses. Amerin Corporation relies primarily on dividends and other permitted
distributions from Amerin Guaranty and Amerin Re as sources of funds. Amerin
Corporation does not currently have any committed lines of credit.
The principal sources of funds for Amerin Guaranty are premiums received on
new and renewal business, amounts earned from the investment of its contributed
capital as well as the investment of its cash flow and commissions on ceded
business and reimbursement of losses from reinsurers. The principal uses of
funds by Amerin Guaranty are the payment of claims and related expenses,
reinsurance premiums, other operating expenses and dividends to Amerin
Corporation. Liquidity requirements are influenced significantly by the level
of claims incidence. Amerin Guaranty does not currently have any committed
lines of credit.
Amerin Guaranty generates substantial cash flows from operations as a result
of premiums being received in advance of the time when claim payments are
required. Cash flows generated from Amerin Guaranty's mortgage insurance
operations totaled $20.5 million and $4.9 million for the first six months of
1996 and the first six months of 1995, respectively. These operating cash
flows, along with that portion of the investment portfolio that is held in cash
and highly liquid securities, are available towards the liquidity requirements
of Amerin Guaranty. Amerin Guaranty's investment portfolio was $252.5 million
at June 30, 1996 and $260.8 million at December 31, 1995.
All of the Company's $266.6 million of fixed income securities at June 30,
1996 are rated "investment grade," which is defined by the Company as a security
having a National Association of Insurance Commissioners ("NAIC") rating of 1 or
2 or an S&P rating ranging from "AAA" to "BBB-."
Risk to Capital Ratio. As a condition to maintenance of its claims-paying
ratings, the total amount of insurance risk that may be written by Amerin
Guaranty is limited to a multiple of 20 times its statutory capital (which
includes the contingency reserve) less the carrying value of non-investment
grade debt and tax and loss bonds and investments in affiliates, or such higher
or lower multiple as is reasonably determined by the rating agency in its sole
discretion. Amerin Guaranty has several alternatives available to control its
risk to capital ratio, including obtaining capital contributions from the
Company, purchasing reinsurance and reducing the amount of new business written.
A material reduction in statutory capital, whether resulting from underwriting
or investment losses or otherwise, or a disproportionate increase in risk in
force, could increase the risk to capital ratio. An increase in the risk to
capital ratio could limit Amerin Guaranty's ability to write new business (which
8
<PAGE>
in turn could materially adversely affect the Company's results of operations
and prospects). At June 30, 1996 and December 31, 1995, Amerin Guaranty's risk
to capital ratio was 10.8 to 1 and 8.2 to 1, respectively.
The Initial Public Offering resulted in net proceeds of $200.2 million to
the Company. Of these proceeds, $46 million was used to retire all of the
outstanding 13.5% Convertible Preferred Stock on December 1, 1995, and $127.0
million and $25.0 million were contributed to the capital of Amerin Guaranty and
Amerin Re, respectively, in order to increase the statutory capital of the two
companies by such amounts.
9
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security-Holders
At the Company's Annual Meeting of Stockholders held on June 11, 1996, the
stockholders (i) elected Mr. Gerald L. Friedman and Mr. Alan E. Goldberg as
Class I directors to serve for a three-year term expiring in 1999 and
(ii) ratified the selection of Ernst & Young LLP as independent auditors for the
Company for 1996. The number of votes cast for and against each matter voted
upon at the Annual Meeting of Stockholders, as well as the number of
abstentions, were as follows:
For Against Abstain
--- ------- -------
Election of Mr. Friedman 19,473,855 0 6,510
Election of Mr. Goldberg 19,473,855 0 6,510
Selection of Ernst & 18,968,805 0 511,560
Young LLP
ITEM 6. Exhibits and Reports on Form 8-K
a) Exhibits
See Exhibit Index on Page E-1 for exhibits filed with this report on Form
10-Q.
b) Reports on Form 8-K
The Registrant did not file any reports on Form 8-K during the quarter for
which this report on Form 10-Q is filed.
10
<PAGE>
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.
AMERIN CORPORATION
Date: August 13, 1996 By:/s/ Gerald L. Friedman
--------------------------------
Gerald L. Friedman
Chairman of the Board and
Chief Executive Officer
Date: August 13, 1996 /s/ George G. Freudenstein
-----------------------------------
George G. Freudenstein
Senior Vice President, Chief Financial
Office and Chief Administrative Officer
11
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Document Page
-------- ----------------------- ----
11.1 Statement Regarding Computation of Earnings Per
Share.
27.1 Financial Data Schedule.
E-1
<TABLE><CAPTION>
Exhibit 11
Amerin Corporation and Subsidiaries
Statement of Computation of Per Share Net Income or Loss
Three Months ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
(in thousands of dollars, except share and per share amounts)
<S> <C> <C> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . $ 6,711 $ 2,491 $ 12,385 $ 4,073
Less pay-in kind dividends on
preferred stock . . . . . . . . . . . . . . . . -- 1,418 -- 2,774
---------- ---------- ---------- ----------
Primary and fully diluted basis-net income . (1) $ 6,711 $ 1,073 $ 12,385 $ 1,299
========== ========== ========== ==========
Average shares outstanding . . . . . . . . . (2) 26,025,570 10,399,125 26,017,835 10,399,125
Stock issued within one year of IPO . . . . . (3) -- 85,750 -- 85,750
Common stock equivalents from dilutive
stock options, based on the treasury
stock method using average market
price . . . . . . . . . . . . . . . . . . . (4) 319,012 60,355 327,121 60,500
---------- ---------- ---------- ----------
Total shares -- primary basis . . . . . . . . 26,344,582 10,545,230 26,344,956 10,545,375
Additional shares assuming conversion
of preferred stock . . . . . . . . . . . . (1) -- -- -- --
Additional common stock equivalents
from dilutive stock options, based
on the treasury stock method using
closing market price, if higher
than average market price . . . . . . . . . (4) 17,001 1,893 8,578 3,375
---------- ---------- ---------- ----------
Total shares -- fully diluted . . . . . . . . 26,361,583 10,547,123 26,353,534 10,548,750
========== ========== ========== ==========
Net income per share -- primary . . . . . . . . . $ 0.25 $ 0.10 $ 0.47 $ 0.12
========== ========== ========== ==========
Net income per share -- fully diluted . . . . . . $ 0.25 $ 0.10 $ 0.47 $ 0.12
========== ========== ========== ==========
</TABLE>
____________________
(1) Preferred stock (redeemed in December 1995) was not convertible until 2007
at which time it was mandatorily convertible. Because conversion was not
effective within 10 years of each reporting period, conversion was not
assumed for all periods prior to 1996.
(2) For the three and six month periods ended June 30, 1995, excludes 11,000,000
shares of common stock issued subject to contingent recall provisions.
Conditions required for the removal of the recall provisions were not met
during such periods. For the three and six month periods ended June 30,
1996, includes 13,340,000 shares issued in conjunction with the Company's
November 28, 1995 initial public offering and 2,250,068 shares, as of the
date of such offering, out of a total of 11,000,000 shares that were
excluded from weighted average shares prior to the Company's initial public
offering. The Company's initial public offering removed the recall
provisions on 2,250,068 of the shares and resulted in the cancellation of
the remaining 8,749,932 common shares.
(3) Stock awards and options issued in the twelve months prior to the Company's
initial public offering are treated as common stock equivalents (based on
the treasury stock method using the initial public offering price).
(4) Prior to the Company's initial public offering, excludes options for
4,375,000 shares of common stock subject to contingent recall provisions.
Conditions required for the removal of the recall provisions were not met
during the periods prior to the Company's initial public offering. Upon
consummation of the Company's initial public offering, options for 4,374,966
shares were cancelled.
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED FINANCIAL STATEMENTS AND RELATED NOTES OF AMERIN CORPORATION AND
SUBSIDIARIES FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<DEBT-HELD-FOR-SALE> 266,592
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 286,591
<CASH> 1,500
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 4,670
<TOTAL-ASSETS> 310,090
<POLICY-LOSSES> 11,879
<UNEARNED-PREMIUMS> 15,269
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
260<F1>
0
<COMMON> 0
<OTHER-SE> 279,563
<TOTAL-LIABILITY-AND-EQUITY> 310,090
26,877
<INVESTMENT-INCOME> 8,123
<INVESTMENT-GAINS> (221)
<OTHER-INCOME> 0
<BENEFITS> 8,366
<UNDERWRITING-AMORTIZATION> 4,111
<UNDERWRITING-OTHER> 5,100
<INCOME-PRETAX> 17,202
<INCOME-TAX> 4,817
<INCOME-CONTINUING> 12,385
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,385
<EPS-PRIMARY> .47
<EPS-DILUTED> .47
<RESERVE-OPEN> 0<F2>
<PROVISION-CURRENT> 0<F2>
<PROVISION-PRIOR> 0<F2>
<PAYMENTS-CURRENT> 0<F2>
<PAYMENTS-PRIOR> 0<F2>
<RESERVE-CLOSE> 0<F2>
<CUMULATIVE-DEFICIENCY> 0<F2>
<FN>
<F1>Common stock at par value
<F2>Available on an annual basis only.
</FN>
</TABLE>
