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
______________________
Commission File Number 0-8636
AMERICAN INDEMNITY FINANCIAL CORPORATION
__________________________________________
(Exact name of registrant as specified in its charter)
Delaware 510119643
_________ _________
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
One American Indemnity Plaza, Galveston, Texas 77550
______________________________________________ __________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code - (409) 766-4600
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes X No
As of August 8, 1996, 1,948,110 shares of registrant's common stock,
$3.33 1/3 par value, were outstanding.
PAGE 1 OF 12 PAGES
<PAGE>
AMERICAN INDEMNITY FINANCIAL CORPORATION
AND SUBSIDIARIES
ITEM 1. FINANCIAL STATEMENTS
Consolidated Statements of Operations for the
Three Months Ended June 30, 1996 and 1995
Unaudited
1996 1995
____________ ____________
PREMIUMS AND OTHER INCOME:
Premiums earned $16,786,184 $17,246,656
Net investment income (net of investment
expenses of $94,543 in 1996 and $100,373
in 1995) 1,112,231 979,257
Realized investment gains (losses) 86,911 (37,254)
Interest on premium bills receivable and
other income 183,800 185,097
____________ ____________
TOTAL 18,169,126 18,373,756
EXPENSES:
Losses and loss adjustment expenses 13,206,607 14,913,671
Policy acquisition costs 6,130,582 6,408,003
Retrospective premium adjustments on
workers' compensation policies (1,079) 608,087
____________ ____________
TOTAL 19,336,110 21,929,761
LOSS BEFORE FEDERAL INCOME TAX (1,166,984) (3,556,005)
CREDIT FOR FEDERAL INCOME TAX:
Current (2,915)
Deferred
____________ ____________
TOTAL (2,915)
NET LOSS $(1,166,984) $(3,553,090)
AVERAGE SHARES OUTSTANDING 1,947,860 1,946,710
EARNINGS PER SHARE:
NET LOSS $ (.60) $ (1.83)
DIVIDENDS DECLARED PER SHARE $ .075 $ .075
See Notes to Consolidated Financial Information
PAGE 2 OF 12 PAGES
<PAGE>
AMERICAN INDEMNITY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations for the
Six Months Ended June 30, 1996 and 1995
Unaudited
1996 1995
____________ ____________
PREMIUMS AND OTHER INCOME:
Premiums earned $33,010,009 $33,914,717
Net investment income (net of investment
expenses of $194,060 in 1996 and $196,189
in 1995 2,231,850 1,996,302
Realized investment gains (losses) 223,825 (80,886)
Interest on premium bills receivable and
other income 356,094 364,188
____________ ____________
TOTAL 35,821,778 36,194,321
EXPENSES:
Losses and loss adjustment expenses 24,116,966 26,054,737
Policy acquisition costs 11,827,305 12,628,592
Retrospective premium adjustments on
workers' compensation policies (21,308) 579,462
____________ ____________
TOTAL 35,922,963 39,262,791
LOSS BEFORE FEDERAL INCOME TAX (101,185) (3,068,470)
CREDIT FOR FEDERAL INCOME TAX:
Current
Deferred
____________ ____________
TOTAL
NET LOSS $ (101,185) $(3,068,470)
AVERAGE SHARES OUTSTANDING 1,947,539 1,946,710
EARNINGS PER SHARE:
NET LOSS $ (.05) $ (1.58)
DIVIDENDS DECLARED PER SHARE $ .15 $ .135
See Notes to Consolidated Financial Information
PAGE 3 OF 12 PAGES
<PAGE>
AMERICAN INDEMNITY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995
Unaudited
1996 1995
ASSETS _____________ _____________
______
Investments:
Fixed maturities - bonds:
Available for sale $ 70,667,164 $ 72,578,178
Preferred stocks 1,588,912 2,289,472
Common stocks 12,009,486 11,895,516
Mortgage loans on real estate 22,218 24,604
Short-term investments 50,000 60,000
_____________ _____________
Total Investments 84,337,780 86,847,770
Cash and Cash Equivalents 3,377,053 4,781,566
Accrued Investment Income 813,102 711,185
Premiums in Course of Collection 6,988,677 4,293,569
Direct Premium Bills Receivable 10,019,637 8,267,740
Reinsurance Balances Receivable 12,967,215 12,167,759
Prepaid Reinsurance Premiums 626,914 716,632
Property and Equipment - Less accumulated
depreciation of $4,838,388 in 1996 and
$4,614,370 in 1995 4,174,007 4,202,742
Deferred Policy Acquisition Costs 9,551,972 8,841,705
Deferred income taxes 4,498,000 4,498,000
Other Assets 3,050,144 2,785,268
_____________ _____________
TOTAL $140,404,501 $138,113,936
LIABILITIES AND STOCKHOLDERS' EQUITY
____________________________________
Losses and Loss Adjustment Expenses $ 51,454,196 $ 51,165,424
Unearned Premiums 37,267,319 34,489,378
Reinsurance Balances Held or Payable 2,983,821 2,844,698
Notes Payable to Bank 555,083
Accounts Payable and Other Accrued Liabilities 9,474,313 9,085,322
_____________ _____________
Total Liabilities 101,734,732 97,584,822
Stockholders' Equity:
Preferred stock, authorized 2,000,000
shares; none outstanding
Common stock, $3.33 1/3 par value; authorized
2,500,000 shares; outstanding shares
1,948,110 in 1996 and 1,947,110 in 1995 6,493,684 6,490,351
Paid-in surplus 13,050,132 13,047,085
Unrealized appreciation in market value of
investments 912,044 2,384,456
Retained earnings 18,213,909 18,607,222
_____________ _____________
Total Stockholders' Equity 38,669,769 40,529,114
_____________ _____________
TOTAL $140,404,501 $138,113,936
See Notes to Consolidated Financial Information
PAGE 4 OF 12 PAGES
<PAGE>
AMERICAN INDEMNITY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1996 and 1995
Unaudited
1996 1995
_____________ _____________
OPERATING ACTIVITIES:
Net loss $ (101,185) $ (3,068,470)
Adjustments to reconcile net loss to
net cash flow from operating activities:
Decrease (Increase) in:
Premiums in course of collection (2,695,108) (1,545,036)
Direct premium bills receivable (1,751,897) (839,621)
Reinsurance balances receivable (799,456) (2,632,720)
Prepaid reinsurance premiums 89,718 572,349
Deferred policy acquisition costs (710,267) (429,736)
Other assets (264,876) (205,733)
Increase (Decrease) in:
Unpaid losses and loss adjustment expenses 288,772 3,481,295
Unearned premiums 2,777,941 1,754,975
Reinsurance balances held or payable 139,123 (862,186)
Accounts payable and other accrued
liabilities 388,991 804,866
Realized investment (gains) losses (223,825) 80,886
Depreciation 224,018 184,591
Other (71,843) 76,383
_____________ _____________
Net cash flow from operating activities (2,628,157) (2,709,894)
INVESTING ACTIVITIES:
Sale of bonds 5,225,745 503,125
Maturity of bonds 4,852,820 2,851,646
Sale of preferred stocks 184,396 49,338
Redemption of preferred stocks 467,868 144,200
Sale of common stocks 975,354 3,927,130
Maturity of long-term certificates of deposit 10,000
Purchase of bonds (9,855,254) (6,811,195)
Purchase of common stocks (631,986)
Purchase of property and equipment (195,283) (499,248)
Other 2,386 2,160
_____________ _____________
Net cash flow from investing activities 167,156 1,036,046
FINANCING ACTIVITIES:
Proceeds received from bank loan 580,500
Payments on bank loan (25,417)
Cash dividends paid to stockholders (292,128) (262,806)
Proceeds received from exercise of stock
options 6,380
_____________ _____________
Net cash flow from financing activities 269,335 (262,806)
Net Increase (Decrease) in Cash and _____________ _____________
Cash Equivalents (1,404,513) (2,723,807)
Cash and Cash Equivalents, January 1 4,781,566 4,937,544
_____________ _____________
Cash and Cash Equivalents, June 30 $ 3,377,053 $ 2,213,737
See Notes to Consolidated Financial Information
PAGE 5 OF 12 PAGES
<PAGE>
AMERICAN INDEMNITY FINANCIAL CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
(1)The consolidated financial statements include the accounts of
American Indemnity Financial Corporation (the "Company"), American
Indemnity Company and American Indemnity Company's wholly-owned
subsidiaries, American Fire and Indemnity Company, Texas General
Indemnity Company and American Computing Company. All material
intercompany balances and transactions have been eliminated in
consolidation. The financial information included herein is
unaudited but, in the opinion of management, all adjustments
(consisting of normal recurring accruals) necessary for a fair
presentation have been included. These interim consolidated
financial statements should be read in conjunction with the
Company's report on Form 10-K for the year ended December 31,
1995. The results of operations for this interim period are not
necessarily indicative of results for the full year.
(2)Deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income
tax purposes, and (b) operating loss carryforwards. The tax
effects of significant items comprising the Company's net deferred
income taxes as of June 30, 1996 and December 31, 1995 are as
follows:
June 30, 1996 December 31, 1995
_______________ __________________
Deferred tax liabilities:
Deferred policy acquisition costs $ (3,247,670) $ (3,006,180)
Differences between book and
tax basis of property (316,226) (300,935)
Unrealized investment gains (310,095) (810,715)
Other (411,607) (403,926)
_____________ _____________
(4,285,598) (4,521,756)
Deferred tax assets:
Reserves not currently deductible 5,743,311 6,013,565
Operating loss carryforwards 12,289,732 11,824,122
_____________ _____________
18,033,043 17,837,687
Net Asset 13,747,445 13,315,931
Valuation allowance (9,249,445) (8,817,931)
_____________ _____________
Net deferred tax assets $ 4,498,000 $ 4,498,000
The provision for income tax for the six months ended June 30,
1996 was $-0-. The Company paid $15,000 in federal income taxes
during the first six months of 1996, whereas the Company did not
pay any federal income taxes during the first six months of 1995.
The provision for federal income tax for the six months ended June
30, 1995 is related to taxes arising under the alternative minimum
tax system which is based on reported income, adjusted for
differences arising in revenue or expense items, per applicable
tax laws and regulations, between reported income and taxable
income.
PAGE 6 OF 12 PAGES
<PAGE>
The Company has a net operating loss carryforward for tax purposes
of $36,146,271, which expires if not previously utilized, in 1998-
$3,163,998; 1999-$7,384,546; 2000-$5,712,421; 2001-$4,927,522;
2002-$2,271,256; 2003-$621,205; 2004-$4,596,950; 2005-$1,246,728;
2006-$118,137; 2007-$43,352; 2008-$13,450; 2009-$13,410; 2010-
$4,663,854 and 2011-$1,369,442.
(3)The Company paid total interest expense of $16,370 for the six
months ended June 30, 1996 and paid no interest for the six months
ended June 30, 1995.
(4)In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation," which is effective for
the Company on January 1, 1996. SFAS No. 123 permits, but does
not require, a fair value based method of accounting for employee
stock option plans which results in compensation expense being
recognized in the results of operations when stock options are
granted. The Company decided not to change its method of
accounting for stock-based compensation; therefore, the adoption
of this statement will not have any impact on the financial
statements of the Company.
PAGE 7 OF 12 PAGES
<PAGE>
AMERICAN INDEMNITY FINANCIAL CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
_______________________________________________
LIQUIDITY
The Company has consistently been able to generate adequate
amounts of cash to meet its needs and management is unaware of any
trends, demands or commitments which will or are reasonably likely to
have a significant effect on the Company's liquidity.
Operating Activities
The net cash flow from operating activities for the six months
ended June 30, 1996 was negative primarily as a result of unfavorable
underwriting results. Although the underwriting results for the first
six months of 1996 improved compared with the first six months of
1995, cash flow from operating activities was insufficient to cover
the payment of claims and underwriting expenses. The unfavorable
underwriting results during the first six months of 1996 were caused
primarily by the occurrence of several weather-related natural
catastrophes and unfavorable underwriting results for the automobile
and commercial multiple peril lines of business, primarily as a result
of an increase in the severity of new claim occurrences, for the three
months ended June 30, 1996. For the first six months of 1996, weather-
related natural catastrophes resulted in losses of approximately
$2,514,000 compared with $4,669,000 for the six months ended June 30,
1995.
The net cash flow from operating activities for the six months
ended June 30, 1995 was negative primarily as a result of an increase
in the amount of funds required for the payment of claims, an increase
in policy acquisition costs and a decrease in net investment income.
The negative effect on cash flow of these items was offset somewhat by
an increase in net premiums written. The amount of funds required for
claim payments increased primarily due to increased weather-related
losses during the second quarter of 1995 and the settlements of
several large commercial automobile claims in the first six months of
1995. The increase in policy acquisition costs resulted from
increases in amortization of deferred policy acquisition costs,
expenses related to commissions and overhead expenses. Net investment
income decreased primarily as a result of reduced yields on the
Company's derivative securities.
Investing Activities
During the first six months of 1996, management invested a
portion of available cash balances and the proceeds received from the
disposition of investments into investment grade bonds and common
stocks. The net cash flow from investing activities was positive in
the first six months of 1996 as total investment sales and maturities
exceeded total investment purchases.
During the first six months of 1996, unrealized investment losses
decreased stockholders' equity by approximately $1,472,000. These
unrealized losses are comprised of unrealized losses of approximately
$1,694,000 from debt securities and unrealized gains of approximately
$222,000 from equity securities. These unrealized investment losses
were primarily the result of the negative effects of increased
interest rates on the market value of the Company's debt securities
during the first six months of 1996.
PAGE 8 OF 12 PAGES
<PAGE>
Approximately $430,000 of the $1,694,000 unrealized investment
losses on debt securities was related to six derivative issues
purchased by the company in 1993. On June 30, 1996, the value carried
in the Company's balance sheet for these six issues was approximately
$18,649,000. The Company's debt and equity securities are reported on
the Company's balance sheet at their respective market values which
fluctuate based upon a variety of market factors. Such fluctuations
will result in changes to the Company's unrealized investment gains or
losses and will have corresponding impacts on the Company's
stockholders' equity. The derivative securities mentioned above are
known as inverse floaters as their yields, which are adjusted
periodically, vary inversely to certain LIBOR rates. These derivative
securities will probably exacerbate swings in unrealized investment
gains and losses and stockholders' equity in the event of significant
movement in interest rates, particularly LIBOR rates. Additionally,
the yield formulas for these securities will result in commensurate
swings in investment income. At current yield rates and considering
future yield resets for these securities and the guarantee (see
discussion below) that was obtained in 1995 with respect to certain of
these securities, net investment income for the final two quarters of
1996 should be increased by approximately $281,000 as compared to the
corresponding period in 1995. This is subject to change, either
positively or negatively, depending on future investment market
conditions.
Because these derivative securities were issued by government
agencies, the Company believes that their principal is assured at
maturity. Barring unforeseen circumstances, the Company has the
ability to hold these debt securities until their stated maturity.
However, if conditions are favorable for their disposition, the
Company may dispose of all or a portion of these securities prior to
maturity. During the first six months of 1996, the Company was able
to reduce its exposure in such securities by the sale of $750,000 par
value of one issue of the derivative securities. As a matter of
investment policy, the Company no longer invests in inverse floating
rate securities.
In connection with an arbitration proceeding in 1995, the Company
received an agreement, effective December 8, 1995, guaranteeing the
yield rate on the largest derivative issue held by it (Guarantee Yield
Security). The Guaranteed Yield Security has a par value of
$11,000,000 and matures in March 1998. The yield rate that is
guaranteed will equal the weekly average yield rate for three month
treasury bills during each interest period of the security. The
maximum amount guaranteed is $1,500,000 and the guarantee will
terminate no later than the security's maturity date. This guarantee
is secured by two letters of credit. One letter of credit is in the
amount of $500,000 and expires two years from its issue date. The
second letter of credit is also in the amount of $500,000 and expires
in one year, provided that, in the event of certain defaults in
financial covenants, an additional letter of credit is provided in the
amount of $250,000 for a second twelve month period. At June 30, 1996
the stated interest rate for the Guaranteed Yield Security was 1.129%
and the guaranteed yield rate was 5.158%. Based on such guarantee
yield rate, net investment income earned by this security during the
final two quarters of 1996 should be increased by approximately
$245,000 compared to the corresponding period in 1995. The amount may
increase or decrease, however, depending on changes in the average
yield rate of the three month treasury bill that determines the
guaranteed yield on this security.
As a result of this guarantee, the yield of the Guaranteed Yield
Security is similar to that of a floating rate instrument whose coupon
yield resets weekly to the average three month treasury bill yield
rate during each interest period. The market value of this security
at June 30, 1996 was determined based upon the market values of other
securities whose yields are calculated in this manner and which mature
in three years. As a result, the market value for this security as
carried on the Company's balance sheet June 30, 1996 was approximately
$10,918,000.
PAGE 9 OF 12 PAGES
<PAGE>
During the first six months of 1995, management invested funds
which were generated from the disposition of investments, together
with a portion of available cash balances, into investment grade
bonds. The net cash flow from investing activities was positive for
the first six months of 1995 as total investment sales and maturities
exceeded total investment purchases.
Financing Activities
In January, 1996, the Company received $580,500 proceeds from a
loan from United States National Bank. The Company is required to
make seventy-two monthly payments at an interest rate of 8.75% until
the maturity date of February 01, 2002. The Company may pay without
penalty all or a portion of the principal earlier than it is due.
These funds were obtained to finance the purchase of computer software
designed to provide policy processing, claims administration, billing
and collection, reinsurance and management reporting needed as part of
the Company's ongoing effort to enhance its technology and reengineer
its business process. As a result of this loan, the net cash flow
from financing activities was positive for the first six months of
1996. The net cash flow from financing activities was negative for
the first six months of 1995 as a result of cash dividends paid to
stockholders.
CAPITAL RESOURCES
The activities of insurance companies are regulated by state
authorities and adequate levels of reserves and equity capital are
required to be maintained to ensure that enough capital is retained in
the business to provide sufficient funds to meet its obligations.
Management believes that the Company has met all statutory and
regulatory requirements and that sufficient funds have been retained
to meet its obligations. The Company has no current commitments or
plans for debt or equity financing other than the loan discussed under
"Liquidity-Financing Activities".
RESULTS OF OPERATIONS
Premiums earned decreased 2.7% for three months and six months
ended June 30, 1996 compared with the corresponding 1995 periods. Net
premiums written increased 6.9% and decreased 1.0%, respectively, for
the three months and six months ended June 30, 1996 compared with the
same 1995 periods. The decrease in premiums earned resulted primarily
from the reduction in the number of policies written in the personal
automobile and workers' compensation lines of business and increased
rates charged to the Company on renewal of certain of its reinsurance
contracts.
Primarily as a result of the unrealized gains in market value of
investments experienced in 1995, average invested assets at June 30,
1996 increased approximately $2,228,000 compared with
June 30, 1995. Additionally, net investment income increased 13.6%
and 11.8%, respectively, for the three months and six months ended
June 30, 1996 compared with the same 1995 periods, primarily as a
result of increased yields on the Company's derivative securities.
This increase in net investment income increased the Company's average
investment yield to 5.22% for the six months ended June 30, 1996
compared with 4.79% for the six months ended June 30, 1995. As a
result of the guarantee of the yield rate on the $11,000,000 par value
derivative security discussed above and, based on the guaranteed yield
rate at June 30, 1996, net investment income earned by this security
should be increased by approximately $245,000 during the final two
quarters of 1996 compared to the corresponding period in 1995. This
is subject to change, either positively or negatively, depending on
changes in the average three month treasury bill yield that determines
the guaranteed yield rate.
PAGE 10 OF 12 PAGES
<PAGE>
In an effort to maximize the overall return on the Company's
investment portfolio, Management elected to take advantage of
favorable market conditions in several issues of common and preferred
stocks and fixed maturity bonds which were held in the investment
portfolio. These sales resulted in realized investment gains for the
three months and six months ended June 30, 1996 compared with realized
investment losses for the same 1995 comparison periods.
The loss and loss adjustment expense ratio was 78.7% for the
three months ended June 30, 1996 compared with 86.5% for the three
months ended June 30, 1995 and was 73.1% for the six months ended June
30, 1996 compared with 76.8% for the six months ended June 1995. This
decrease was primarily the result of a smaller number and decreased
severity of weather-related natural catastrophes during the first six
months of 1996 compared with the first six months of 1995. Claims
from weather-related natural catastrophes resulted in approximately
$1,651,000 in losses for the second quarter ended June 30, 1996,
compared with approximately $3,922,000 for the second quarter ended
June 30, 1995. For the six months ended June 30, 1996, weather-
related natural catastrophes resulted in losses of approximately
$2,514,000 compared with $4,669,000 for the six months ended June 30,
1995. Although weather-related catastrophes did not impact the
underwriting results for the first six months of 1996 as severely as
the first six months of 1995, these occurrences accounted for 9.8% of
earned premium for the second quarter of 1996, having a significant
adverse effect on the underwriting results for the three months ended
June 30, 1996. Additionally, the underwriting results for the three
months ended June 30, 1996 were adversely impacted by unfavorable
underwriting results in the automobile and commercial multiple peril
lines of business, primarily as a result of an increase in the
severity of new claim occurrences, during the second quarter of 1996.
The policy acquisition cost ratio was 36.5% for the three months
ended June 30, 1996 compared with 37.2% for the three months ended
June 30, 1995 and was 35.8% for the six months ended June 30, 1996,
compared with 37.2% for the six months ended June 30, 1995. The
decrease in this ratio was a result of an increase in deferral of
policy acquisition costs during the first six months of 1996 compared
with the first six months of 1995.
The net loss of the Company was approximately $1,167,000 for the
three months ended June 30, 1996 compared with $3,553,000 for the
three months ended June 30, 1995 and was approximately $101,000 for
the six months ended June 30, 1996 compared with $3,068,000 for the
six months ended June 30, 1995. This improvement resulted primarily
from the decrease in claims from weather-related natural catastrophes,
the increase in net investment income, the decrease in policy
acquisition costs, and the realized investment gains during the three
months and six months ended June 30, 1996 compared with the same 1995
comparison periods.
PAGE 11 OF 12 PAGES
<PAGE>
AMERICAN INDEMNITY FINANCIAL CORPORATION
AND SUBSIDIARIES
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of the stockholders of the Company held
April 29, 1996, the Company's stockholders elected three
Class II directors to serve on the Board of Directors
of the Company for the ensuing three years. The following
table sets forth the number of votes cast for each nominee
for director, the number of votes cast against or withheld
from voting with respect to each nominee and the number of
votes represented by shares which abstained from voting with
respect to each nominee for director:
Votes Votes
Nominee Cast For Against/Withheld Abstensions
________ __________ _______________ ___________
Jack T. Currie 1,531,148 -0- -0-
J. Fellman Seinsheimer, III 1,531,148 -0- -0-
Synott L. McNeel 1,531,148 -0- -0-
There were no broker non-votes.
Item 6. (a) Exhibit 11 - Computation of Fully Diluted Net
Income per Common and Common Equivalent Share.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the
quarter for which this report is filed.
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.
AMERICAN INDEMNITY FINANCIAL CORPORATION
________________________________________
(Registrant)
Date AUGUST 12, 1996 PHILLIP E. APGAR
________________ ____________________________________________
VICE PRESIDENT-TREASURER - CHIEF
FINANCIAL OFFICER
(PRINCIPAL FINANCIAL & ACCOUNTING OFFICER)
PAGE 12 OF 12 PAGES
AMERICAN INDEMNITY FINANCIAL CORPORATION EXHIBIT 11
AND SUBSIDIARIES
COMPUTATION OF FULLY DILUTED NET INCOME
PER COMMON AND COMMON EQUIVALENT SHARE
SIX MONTHS SIX MONTHS THREE MONTHS THREE MONTHS
ENDED ENDED ENDED ENDED
06-30-96 06-30-95 06-30-96 06-30-95
___________ __________ ____________ ____________
PRIMARY EARNINGS PER SHARE
Weighted average shares of
common stock outstanding 1,947,539 1,946,710 1,947,860 1,946,710
Stock options (treasury
stock method) (1) 8,134 8,396 8,134 8,396
Weighted average shares
outstanding for primary
earnings per share
computation 1,955,673 1,955,106 1,955,994 1,955,106
Net income (loss) $(.05) $(1.57) $(.60) $(1.82)
FULLY DILUTED EARNINGS PER SHARE
Weighted average shares of
common stock outstanding 1,947,539 1,946,710 1,947,860 1,946,710
Stock options (treasury
stock method) (1) 8,639 8,396 8,639 8,396
Weighted average shares
outstanding for fully
diluted computation 1,956,178 1,955,106 1,956,499 1,955,106
Net income (loss) $(.05) $(1.57) $(.60) $(1.82)
(1)This calculation is submitted in accordance with Regulation S-K
item 601(b)(11) although not required by footnote 2 to paragraph
14 of APB Opinion No. 15 because it results in dilution of less
than 3%.
<TABLE> <S> <C>
<ARTICLE> 7
<CIK> 0000005227
<NAME> AMERICAN INDEMNITY FINANCIAL CORP
<S> <C>
<PERIOD-TYPE> 6-MOS
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