<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 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
---------- ---------
AMERICAN BANKERS INSURANCE GROUP, INC.
11222 QUAIL ROOST DRIVE
MIAMI, FLORIDA 33157
(305) 253-2244
Commission File Number: 0-9633
State of Incorporation: Florida
I.R.S. Employer Identification Number: 59-1985922
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 report), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
----- -----
Common Stock - Par Value $1.00
20,492,357 Shares Outstanding on October 28, 1996
1
<PAGE> 2
Form 10-Q
Company or group of companies for which report is filed:
AMERICAN BANKERS INSURANCE GROUP, INC.
This quarterly report, filed pursuant to Rule 13A-13 of the General Rules and
Regulations under the Securities Exchange Act of 1934, consists of the
following information as specified in Form 10-Q.
Part I - Financial Information
Item 1 - Financial Statements
1. Consolidated Balance Sheets at September 30, 1996 and December 31,
1995.
2. Consolidated Statements of Income for the three months ended
September 30, 1996 and 1995.
3. Consolidated Statements of Income for the nine months ended
September 30, 1996 and 1995.
3. Consolidated Statements of Cash Flows for the nine months ended
September 30, 1996 and 1995.
4. Notes to Consolidated Financial Statements.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Part II - Other Information
Item 1 - Legal Proceedings
Item 4 - Submission of matters to a vote of security holders
Item 6 - Exhibits and Reports
a. Exhibits.
The following exhibits are included herein:
(11) Statement re: computation of earnings per share.
(27) Financial Data Schedule
b. Report on Form 8-K.
None
2
<PAGE> 3
Form 10-Q
SIGNATURE
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.
AMERICAN BANKERS
INSURANCE GROUP, INC.
November 11, 1996
Date
/s/ Floyd Denison
-------------------------------------
Floyd Denison
Executive Vice President of Finance
3
<PAGE> 4
PART I
FINANCIAL INFORMATION
4
<PAGE> 5
AMERICAN BANKERS INSURANCE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
-------- --------
Assets (unaudited)
<S> <C> <C>
Investments
Held-to-Maturity securities, at amortized cost $ 811,490 $ 594,277
Available-for-Sale securities, at approximate market value 814,726 793,277
Trading securities, at approximate market value 8,920 -
Equity securities, at approximate market value 106,468 113,028
Mortgage loans on real estate 10,440 11,793
Policy loans 8,212 7,819
Short-term and other investments 178,959 168,216
------------ -------------
Total investments 1,939,215 1,688,410
Cash 18,948 23,257
Accounts receivable, net of allowance for doubtful
accounts of $4,926 in 1996 and $5,024 in 1995 136,365 130,970
Reinsurance receivable 171,495 168,128
Accrued investment income 24,147 20,943
Deferred policy acquisition costs 366,738 310,879
Prepaid reinsurance premiums 505,063 502,312
Other assets 194,012 142,835
------------ -------------
Total assets $ 3,355,983 $ 2,987,734
============ =============
Liabilities, Common Stock and
Other Stockholders' Equity
Policy liabilities $ 287,432 $ 275,250
Unearned premiums 1,263,653 1,178,867
Claim liabilities 464,806 404,745
------------ -------------
2,015,891 1,858,862
Other policyholders' funds 7,497 7,113
Notes payable 245,068 235,981
Deferred income taxes 35,520 29,549
Accrued commissions and other expenses 145,498 136,174
Other liabilities 228,197 207,058
------------ -------------
Total liabilities 2,677,671 2,474,737
------------ -------------
Commitments and Contingencies (Note 4)
Common Stock and Other Stockholders' Equity
Preferred Stock. $3.125 Series B Cumulative Convertible Preferred Stock
Authorized 3,500 shares. Issued and Outstanding : 1996-2,300 shares 115,000 -
Common stock of $1 par value. Authorized 35,000 shares.
Issued and outstanding: 1996-20,491 shares; 1995-20,384 shares 20,491 20,384
Additional paid-in capital 216,613 215,121
Net unrealized investment and foreign exchange (losses) gains (1,555) 7,255
Retained earnings 337,888 282,748
Less:
Treasury stock, at cost - 93 shares in 1996 and 136 shares in 1995 (1,426) (2,516)
Unamortized restricted stock (3,918) (3,620)
Collateralization of loan to Leveraged Employee
Stock Ownership Plan (4,781) (6,375)
------------ -------------
Total common stock and other stockholders' equity 678,312 512,997
------------ -------------
Total liabilities, common stock and other
stockholders' equity $ 3,355,983 $ 2,987,734
============ =============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE> 6
AMERICAN BANKERS INSURANCE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(IN THOUSANDS EXCEPT PER COMMON SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Gross collected premiums $ 634,165 $ 605,033
============ =============
Premiums and other revenues:
Net premiums earned $ 363,786 $ 325,919
Net investment income 31,038 25,877
Realized investment gains 263 495
Other income 4,532 4,954
------------ -------------
Total premiums and other revenues 399,619 357,245
------------ -------------
Benefits and expenses:
Net benefits, claims, losses and settlement expenses 133,218 125,109
Commissions 160,838 137,370
Operating expense 69,397 65,931
Interest expense 4,469 3,748
------------ -------------
Total benefits and expenses 367,922 332,158
------------ -------------
Income before taxes 31,697 25,087
------------ -------------
Income tax expense (benefit):
Current (2,100) 2,778
Deferred 11,160 3,625
------------ -------------
9,060 6,403
------------ -------------
Net Income $ 22,637 $ 18,684
============= =============
PER COMMON SHARE AND COMMON EQUIVALENT SHARE DATA
Primary:
Net Income $ 1.02 $ .90
=========== ============
Weighted average number of shares outstanding 20,887 20,864
=========== ============
Fully diluted:
Net Income $ 1.00 $ .90
=========== ============
Weighted average number of shares outstanding 22,647 20,887
=========== ============
Dividends per common share $ .20 $ .19
=========== ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
6
<PAGE> 7
AMERICAN BANKERS INSURANCE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(IN THOUSANDS EXCEPT PER COMMON SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Gross collected premiums $ 1,840,196 $ 1,657,190
============ =============
Premiums and other revenues:
Net premiums earned $ 1,052,417 $ 907,591
Net investment income 87,242 72,415
Realized investment gains (losses) 6,284 (707)
Other income 15,361 13,928
------------ -------------
Total premiums and other revenues 1,161,304 993,227
------------ -------------
Benefits and expenses:
Net benefits, claims, losses and settlement expenses 412,735 342,859
Commissions 433,471 385,847
Operating expense 204,264 183,903
Interest expense 12,995 11,483
------------ -------------
Total benefits and expenses 1,063,465 924,092
------------ -------------
Income before taxes 97,839 69,135
------------ -------------
Income tax expense:
Current 17,582 13,243
Deferred 11,924 6,289
------------ -------------
29,506 19,532
------------ -------------
Net Income $ 68,333 $ 49,603
============ =============
PER COMMON SHARE AND COMMON EQUIVALENT SHARE DATA
Primary:
Net Income $ 3.23 $ 2.39
============ ============
Weighted average number of shares outstanding 20,771 20,722
============ ============
Fully diluted:
Net Income $ 3.18 $ 2.39
============ ============
Weighted average number of shares outstanding 21,541 20,821
============ ============
Dividends per common share $ .59 $ .56
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
7
<PAGE> 8
AMERICAN BANKERS INSURANCE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 68,333 $ 49,603
Adjustments to reconcile net income to net cash provided
by operating activities:
Change in policy liabilities, unearned premiums, claim
liabilities, reinsurance receivable and prepaid reinsurance premiums 151,098 199,558
Change in other assets and other liabilities (17,695) 22,047
Increase in accounts receivable (5,395) (20,418)
Increase in accrued investment income (3,204) (3,661)
Increase in accrued commission and expenses 9,324 30,953
Increase (decrease) in policyholders' funds 384 (6,218)
Increase in policy loans (393) (728)
Amortization of deferred policy acquisition costs 170,370 309,290
Amortization of cost of insurance acquired 1,430 1,857
Policy acquisition costs deferred (226,229) (379,299)
Provision for amortization and depreciation 4,390 12,077
Provision for deferred income taxes 10,840 6,289
Net (gain) loss on sale of investments (6,284) 707
Compensation and tax effect on stock option shares 2,366 983
Net cash flow from purchases and sales of trading securities (8,850) (607)
----------- -------------
Net cash provided by operating activities 150,485 222,433
----------- -------------
INVESTING ACTIVITIES:
Purchase of investments
Held-to-maturity securities (291,083) (130,587)
Available-for-sale securities (158,103) (259,003)
Mortgage loans - (648)
Proceeds from sale of investments
Available-for-sale securities 86,943 57,554
Mortgage loans 1,364 2,103
Real Estate 1,466 -
Proceeds from maturities of investments
Held-to-maturity securities 73,366 65,008
Available-for-sale securities 44,142 16,520
Increase in short-term investments (14,733) (67,835)
Transactions related to capital assets
Capital expenditures (10,371) (7,763)
Sales of capital assets 460 275
------------ -------------
Net cash used in investing activities (266,549) (324,376)
------------ -------------
FINANCING ACTIVITIES:
Proceeds from issuance of debt 138,147 93,000
Repayment of debt (127,466) (53,683)
Dividends paid to shareholders (12,013) (11,157)
Proceeds from issuance of stock 113,250 869
Purchase of treasury stock (175) (893)
------------ -------------
Net cash provided by financing activities 111,743 28,136
------------ -------------
Net decrease in cash (4,321) (73,807)
Cash at beginning of period 23,257 89,536
Rate change effect on cash flow 12 440
------------ -------------
Cash at end of period $ 18,948 $ 16,169
============ =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 11,933 $ 9,207
Income taxes $ 29,777 $ 16,742
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
8
<PAGE> 9
AMERICAN BANKERS INSURANCE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
1. Financial Statements
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and 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 of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the period ended September 30, 1996 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1996. These statements should be read in conjunction
with the financial statements and notes thereto included in the Company's
Annual Report Form 10-K for the year ended December 31, 1995. Certain
items have been reclassed to conform with 1996 presentation.
2. Translation of Foreign Currencies
Unrealized foreign exchange losses, totaling $13,801,000 and $12,668,000
as of September 30, 1996 and December 31, 1995 respectively, are included
in Other Stockholders' Equity under the caption "Net unrealized investment
and foreign exchange (losses) gains."
3. Reinsurance
The Company accounts for reinsurance contracts under Financial Accounting
Standards Board's Statement 113. The Company recognizes the income on
reinsurance contracts principally on a pro-rata basis over the life of the
policies covered under the reinsurance agreements. Reinsurance
Recoverables on Unpaid Losses are included as an asset in the Balance
Sheet under the caption "Reinsurance Receivables". Ceded Unearned Premiums
are included as an asset in the Balance Sheet under the caption "Prepaid
Reinsurance Premiums".
The effect of reinsurance on premiums earned is as follows for the nine
months and three months ended September 30, 1996 and 1995:
<TABLE>
<CAPTION>
(in thousands)
Nine Months Ended
September 30, 1996 September 30, 1995
------------------ ------------------
<S> <C> <C>
Direct premiums $ 1,658,096 $ 1,364,260
Reinsurance assumed 93,252 122,032
Reinsurance ceded (698,931) (578,701)
--------------- ----------------
Net premiums earned $ 1,052,417 $ 907,591
=============== ================
</TABLE>
<TABLE>
<CAPTION>
(in thousands)
Three Months Ended
September 30, 1996 September 30, 1995
------------------ ------------------
<S> <C> <C>
Direct premiums $ 566,396 $ 477,137
Reinsurance assumed 34,371 48,362
Reinsurance ceded (236,981) (199,580)
------------ ---------------
Net premiums earned $ 363,786 $ 325,919
============ ===============
</TABLE>
Reinsurance ceded incurred losses for the nine months ended September
30, 1996 and 1995 were $217,947,000 and $181,967,000 respectively.
Reinsurance ceded incurred losses for the three months ended September
30, 1996 and 1995 were $65,592,000 and $48,232,000 respectively.
9
<PAGE> 10
4. Commitments and Contingencies
For a comprehensive description of the Company's litigation, see Item
III of the Company's 1995 Form 10-K.
Alabama and Related Litigation:
The Company and certain of its insurance subsidiaries are presently
parties to a number of individual consumer and class action lawsuits
pending in Alabama involving premium, rate and policy coverage issues.
While a few similar suits have been filed in other jurisdictions, the
insurance and finance industries have been targeted in Alabama by
plaintiffs' lawyers who enjoy a favorable judicial climate. The Company
typically has been named as a co-defendant with one or several retailer
or finance companies who have sold the Company's product to a consumer.
A number of other insurers are also named as co-defendants in many of
the suits.
Although the Alabama lawsuits and similar suits pending in other
jurisdictions generally involve relatively small amounts of actual or
compensatory damages, they typically assert claims requesting
substantial punitive awards or purport to represent a large class of
policyholders. The Company denies any wrongdoing in any of these suits
and believes that it has not engaged in any conduct that would warrant
an award of punitive damages or that the class allegations have merit.
The Company has been advised by legal counsel that it has meritorious
defenses to all claims being asserted against it.
While no one case is necessarily significant in terms of financial risk
to the Company, the judicial climate in Alabama is such that the outcome
of these cases is extremely unpredictable. Without admitting any
wrongdoing, the Company has settled a number of these suits, but there
are still a significant number of cases pending, and it is expected that
more suits alleging essentially the same causes of action are likely to
continue to be filed during 1996. The Company intends to continue to
defend itself vigorously against all such suits and believes, based on
information currently available, that any liabilities that could result
are not expected to have a material effect on the Company's financial
position.
The Company is involved with a number of cases in the ordinary course of
business relating to insurance matters, or more infrequently, certain
corporate matters. Generally, the Company's liability is limited to
specific amounts relating to insurance or policy coverage for which
provision has been made in the financial statements. Other cases involve
general corporate matters which generally do not represent significant
contingencies for the Company.
10
<PAGE> 11
5. Segment Information
Gross collected premiums, net premiums earned and income (loss) before
federal income taxes are summarized as follows:
<TABLE>
<CAPTION>
(in thousands)
Nine Months Ended
September 30,
-------------
1996 1995
------ -----
<S> <C> <C>
GROSS COLLECTED PREMIUMS:
Life $ 562,485 $ 493,896
Property and Casualty 1,277,711 1,163,294
------------ ----------
Total $ 1,840,196 $1,657,190
============ ==========
NET PREMIUMS EARNED:
Life $ 296,373 $ 280,500
Property and Casualty 756,044 627,091
------------ ----------
Total $ 1,052,417 $ 907,591
============ ==========
INCOME (LOSS) BEFORE INCOME TAXES:
Life $ 51,741 $ 38,725
Property and Casualty 65,609 53,376
Other (6,516) (11,483)
------------ ----------
110,834 80,618
Interest Expense 12,995 11,483
------------ ----------
Total Income $ 97,839 $ 69,135
============ ==========
</TABLE>
6. Accounting for Investments
The Company accounts for its investments according to the Financial
Accounting Standards Board's Statement 115 - Accounting for Certain
Investments in Debt and Equity Securities.
This Statement addresses the accounting and reporting for investments in
equity securities that have readily determinable fair values and for all
investments in debt securities. Those investments are to be classified
in three categories and accounted for as follows:
Held-to-Maturity - Securities for which the enterprise has the positive
intent and ability to hold to maturity. These securities are carried at
amortized cost.
Trading Securities - Securities that are bought and held principally for
the purpose of selling them in the near term. These securities are
carried at market value with the unrealized holding gain or loss included
in earnings.
Available-for-Sale - Securities not classified as trading or
held-to-maturity. These securities are carried at market value with the
unrealized holding gain or loss reported as a separate component of
equity, net of the income tax effect.
11
<PAGE> 12
The detail of Cost and Statement Value for the Fixed Maturities and Equity
Securities held at September 30, 1996 is as follows:
<TABLE>
<CAPTION>
(in thousands)
Amortized Statement
Cost Value
------------ -------------
<S> <C> <C>
Fixed Maturities
Held-to-Maturity Securities $ 811,490 $ 811,490
Available-for-Sale Securities 812,452 814,726
Trading Securities 8,859 8,920
------------ -----------
Total Fixed Maturities $ 1,632,801 $ 1,635,136
============ ===========
Net unrealized gain $ 2,274
===========
Net unrealized gain included in investment income $ 61
===========
Market
Cost Value
----------- -----------
Equity Securities
Held-to-Maturity Securities $ - $ -
Available-for-Sale Securities 94,947 106,468
Trading Securities - -
------------ -----------
Total Equity Securities $ 94,947 $ 106,468
============ ===========
Net unrealized gain $ 11,521
===========
</TABLE>
The net unrealized gain for "Available-for-Sale Securities" decreased by
$11,073,000 (net of $5,272,000 in deferred income taxes) from December 31, 1995
to September 30, 1996. There were no unrealized gains and losses from transfers
of Held-to-Maturity Securities.
An analysis of the realized gains and losses of the Company for the nine months
ended September 30, 1996 is as follows:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Gross realized gains from sales of Available-for-Sale Securities $ 10,148
Gross realized losses from sales of Available-for-Sale Securities (3,377)
Gross realized gains from sales of Held-to-Maturity Securities 1
Gross realized losses from sales of Held-to-Maturity Securities (82)
-----------
Net realized gain from investment activity 6,690
Net realized loss from other investment activity (406)
-----------
Total realized gain $ 6,284
==========
</TABLE>
The Company uses the specific identification method to determine cost for
computing the realized gains and losses. There were no transfers of securities
from Available-for-Sale to Trading for the nine months ended September 30,
1996. The Company disposed of certain Held-to-Maturity securities due to
deteriorating credit quality, mandatory redemption, or that were within three
months of maturity.
12
<PAGE> 13
AMERICAN BANKERS INSURANCE GROUP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Gross collected premiums increased $29.1 million or 5% to $634.2 million for
the three months ended September 30, 1996, from $605.0 million for the same
period of 1995. Approximately 49% or $14.2 million of the increase came from
the largest product line - Credit Unemployment.
During the three months ended September 30, 1996, total premiums and other
revenues were $399.6 million, an increase of $42.4 million over total premiums
and other revenues of $357.2 million for the same period in 1995. The increase
includes a $37.9 million increase in net premiums earned from the premium
growth experienced by the Company's existing clients. The overall growth in
invested assets generated an additional $5.2 million of investment income for
the third quarter of 1996 as compared to the same period of 1995.
Both the benefits and claims ratio and the operating expenses ratio improved
slightly to 37% and 17%, respectively, for the three months ended September 30,
1996, compared to 38% and 18%, respectively, for the same period of 1995. The
benefits, claims, losses and settlement expenses include approximately $5.2
million (net of tax) of hurricane losses for the three months ended September
30, 1996. However, this line for the same period of 1995 included $4.7 million
(net of tax) of credit bond losses and related expenses including the final
settlement of the FDIC litigation. The improvement in the benefits and claims
ratio was offset by an increase in the commissions ratio from 42% for the three
months ended September 30, 1995, to 44% for the same period of 1996.
Financial Condition
Total assets at September 30, 1996, and December 31, 1995, were $3.4 billion
and $3.0 billion, respectively. Invested assets at the same date were $1.9
billion and $1.7 billion, respectively. Approximately $80 million of the
increase in invested assets was attributable to additional borrowing under the
short-term credit facility during June 1996.
Liabilities were $2.7 billion and $2.5 billion at September 30, 1996, and at
December 31, 1995, respectively, and were primarily comprised of insurance
liabilities of $2.0 billion and $1.9 billion respectively.
Stockholders' Equity increased $165.3 million from $513.0 million at December
31, 1995, to $678.3 million at September 30, 1996. The Company's issuance, in
July 1996, of 2,300,000 shares of convertible preferred stock with a per share
stated value of $50 contributed $115 million in additional equity and was the
primary cause for the increase. These shares yielded net proceeds of $112
million which were primarily used to reduce the Company's outstanding debt.
Also, contributing to the increase was the net income after dividends of $55.2
million which was offset partially by an increase in the unrealized investment
losses recorded by the Company. The increase in unrealized investment losses
was a result of the impact of increasing interest rates on the market values of
the Company's investment portfolio.
13
<PAGE> 14
Liquidity and Capital Resources
On September 30, 1996, $1.9 billion of securities, short-term investments and
cash comprised 58% of the Company's total assets. The securities were
principally readily marketable and did not include any significant
concentration in private placements.
The Company does not hold significant investments in equity securities;
consequently, market changes in the equity securities markets do not
significantly affect the investment portfolio.
The Company expects to continue its policy of paying regular cash dividends;
however, future dividends are dependent on the Company's future earnings,
capital requirements and financial condition. In addition, the payment of
dividends is subject to the restrictions described in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
Private Securities Litigation Reform Act of 1995 - Safe Harbor Cautionary
Statement
Except for the historical information contained herein, certain of the matters
discussed in this quarterly report are "forward-looking statements" as defined
in the Private Securities Litigation Reform Act of 1995, which involve certain
risks and uncertainties, including but not limited to, changes in general
economic conditions, interest rates, consumer confidence, competition,
environmental factors, and governmental regulations affecting the Company's
operations. See the Company's Annual Report Form on 10-K for the year ended
December 31, 1995, for a further discussion of these and other risks and
uncertainties applicable to the Company's business.
14
<PAGE> 15
PART II
OTHER INFORMATION
15
<PAGE> 16
Item 1 - Legal Proceedings
Commitments and Contingencies information which appears on page 10 elsewhere in
this report is incorporated by reference in this item. Additional information
regarding litigation can be found in the Company's 1995 Annual Report on Form
10-K.
Item 4 - Submission of Matters to a Vote of Security Holders
None.
Item 6(A) - Exhibits
Exhibit 11 - Statement Re: Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule (for SEC use only)
Item 6(B) - Reports on Form 8-K
None.
16
<PAGE> 1
EXHIBIT 11 - STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(in thousands except per common share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY: 1996 1995 1996 1995
---- ---- ---- ----
Weighted average shares outstanding 20,887 20,864 20,771 20,722
======= ======= ======= =======
Net Income $22,637 $18,684 $68,333 $49,603
Less convertible preferred stock dividends 1,258 - 1,258 -
------- ------- ------- -------
Total $21,379 $18,684 $67,075 $49,603
======= ======= ======= =======
Net Income - per share $ 1.02 $ .90 $3.23 $2.39
======= ======= ======= =======
FULLY DILUTED:
Weighted average of shares outstanding 20,887 20,864 20,771 20,722
Assumed conversion of common stock equivalents 12 12 83 76
Assumed conversion of convertible securities 1,748 11 687 23
------- ------- ------- -------
Total 22,647 20,887 21,541 20,821
======= ======= ======= =======
Net income $22,637 $18,684 $68,333 $49,603
Add convertible debenture interest, net of federal income
tax 57 65 171 195
------- ------- ------- -------
Total $22,694 $18,749 $68,504 $49,798
======= ======= ======= =======
Net income - per share $ 1.00 $ .90 $3.18 $2.39
======= ======= ======= =======
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<DEBT-HELD-FOR-SALE> 823,646
<DEBT-CARRYING-VALUE> 811,490
<DEBT-MARKET-VALUE> 811,490
<EQUITIES> 106,468
<MORTGAGE> 10,440
<REAL-ESTATE> 0
<TOTAL-INVEST> 1,939,215
<CASH> 18,948
<RECOVER-REINSURE> 171,495
<DEFERRED-ACQUISITION> 366,738
<TOTAL-ASSETS> 3,355,983
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0
115,000
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1,052,417
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</TABLE>
