<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 101,274
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 12,742
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 118,098
<CASH> 459
<RECOVER-REINSURE> 8,480
<DEFERRED-ACQUISITION> 16,213
<TOTAL-ASSETS> 173,562
<POLICY-LOSSES> 39,022
<UNEARNED-PREMIUMS> 32,294
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 12,500
0
0
<COMMON> 34
<OTHER-SE> 50,228
<TOTAL-LIABILITY-AND-EQUITY> 173,562
21,446
<INVESTMENT-INCOME> 1,681
<INVESTMENT-GAINS> 637
<OTHER-INCOME> 0
<BENEFITS> 7,068
<UNDERWRITING-AMORTIZATION> 10,821
<UNDERWRITING-OTHER> 2,903
<INCOME-PRETAX> 2,571
<INCOME-TAX> 786
<INCOME-CONTINUING> 1,785
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,785
<EPS-PRIMARY> 0.53
<EPS-DILUTED> 0.53
<RESERVE-OPEN> 42,009
<PROVISION-CURRENT> 4,604
<PROVISION-PRIOR> 2,769
<PAYMENTS-CURRENT> 2,292
<PAYMENTS-PRIOR> 8,068
<RESERVE-CLOSE> 39,022
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
UNITED STATES
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 March 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number: 1-9580
AMWEST INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2672141
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6320 Canoga Avenue, Suite 300
Woodland Hills, California 91367
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 704-1111
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 May 13, 1997, 3,367,127 shares of common stock, $.01 par value,
were outstanding.
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
INDEX
Part I. FINANCIAL INFORMATION:
Item 1
Consolidated Statements of Operations for the three
months ended March 31, 1997 and 1996 3
Consolidated Balance Sheets as of March 31, 1997
and December 31, 1996 4
Consolidated Statements of Cash Flows for the three
months ended March 31, 1997 and 1996 6
Notes to Interim Consolidated Financial Statements 8
Item 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. OTHER INFORMATION:
Item 1
Legal Proceedings 13
Item 2
Changes in Securities 13
Item 3
Defaults Upon Senior Securities 13
Item 4
Submission of Matters to a Vote of Security Ho1ders 13
Item 5
Other Information 13
Item 6
Exhibits and Reports on Form 8-K 13
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
March 31,
1997 1996
<S> <C> <C>
Underwriting revenues:
Premiums written $ 21,610 $ 23,208
Premiums ceded (1,149) (2,743)
--------------------- ---------------------
Net premiums written 20,461 20,465
Change in unearned premiums:
Direct 1,644 1,519
Ceded (659) (149)
--------------------- ---------------------
Net premiums earned 21,446 21,835
--------------------- ---------------------
Underwriting expenses:
Losses and loss adjustment expenses 6,653 10,463
Reinsurance (recoveries) refunds 415 (392)
--------------------- ---------------------
Net losses and loss adjustment expenses 7,068 10,071
Policy acquisition costs 10,821 9,487
General operating costs 2,903 3,828
--------------------- ---------------------
Total underwriting expenses 20,792 23,386
--------------------- ---------------------
Underwriting income (loss) 654 (1,551)
Interest expense (401) (594)
Merger expense - (710)
Net investment income 1,681 1,807
Net realized investment gains 637 1,025
Commissions and fees - 143
--------------------- ---------------------
Income before income taxes 2,571 120
Provision for income taxes:
Current 524 76
Deferred 262 (42)
--------------------- ---------------------
Total provision for income taxes 786 34
--------------------- ---------------------
Net income $ 1,785 $ 86
===================== =====================
Earnings per common share:
===================== =====================
Net income $ 0.53 $ 0.03
===================== =====================
Weighted average number of common shares outstanding 3,357 3,343
</TABLE>
See accompanying notes to interim consolidated
financial statements.
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
ASSETS
March 31, December 31,
1997 1996
--------------------- ---------------------
(unaudited)
<S> <C> <C>
Investments, available-for-sale:
Fixedmaturities, at market value (amortized cost of $102,019
and $101,799 at March 31, 1997 and December 31, 1996,
respectively) $ 101,274 $ 102,494
Common equity securities, at market value (cost of $6,981
and $7,217 at March 31, 1997 and December 31, 1996,
respectively) 9,147 9,779
Preferred equity securities, at market value (cost of $3,473
and $3,971 at March 31, 1997 and December 31, 1996,
respectively) 3,595 4,253
Other invested assets (cost of $2,500 and $2,667 at March 31,
1997 and December 31, 1996, respectively) 2,871 2,849
Short-term investments 1,211 890
--------------------- ---------------------
Total investments 118,098 120,265
Cash and cash equivalents 459 6,434
Accrued investment income 1,422 1,399
Agents balances and premiums receivable (less allowance for
doubtful accounts of $446 at March 31, 1997 and December 31,
1996) 11,846 10,882
Reinsurance recoverable:
Paid loss and loss adjustment expenses 2,347 2,749
Unpaid loss and loss adjustment expenses 6,133 6,443
Ceded unearned premiums 1,190 1,849
Deferred policy acquisition costs 16,213 16,101
Furniture, equipment and improvements, net 4,513 4,747
Current Federal income taxes 1,485 2,802
Other assets 9,856 7,747
--------------------- ---------------------
Total assets $ 173,562 $ 181,418
===================== =====================
</TABLE>
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(Dollars in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
-------------------- ---------------------
(unaudited)
<S> <C> <C>
Liabilities:
Unpaid losses and loss adjustment expenses $ 39,022 $ 42,009
Unearned premiums 32,294 33,939
Funds held as collateral 27,191 29,928
Deferred Federal income taxes 1,377 1,842
Bank indebtedness 12,500 12,500
Amounts due to reinsurers 612 345
Other liabilities 10,304 10,923
-------------------- ---------------------
Total liabilities 123,300 131,486
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000
shares authorized; issued and outstanding: none - -
Common stock, $.01 par value, 10,000,000
shares authorized, issued and outstanding: 3,351,752 at
March 31, 1997 and 3,326,002 at December 31, 1996 34 33
Additional paid-in capital 17,052 16,827
Net unrealized appreciation of investments carried at market,
net of income taxes 1,144 2,456
Retained earnings 32,032 30,616
-------------------- ---------------------
Total stockholders' equity 50,262 49,932
-------------------- ---------------------
Total liabilities and stockholders' equity $ 173,562 $ 181,418
==================== =====================
</TABLE>
See accompanying notes to interim consolidated
financial statements.
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three months ended
March 31,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,785 $ 86
Adjustments to reconcile net income to cash provided by operating
activities:
Change in agents' balances and premiums receivable and
unearned premiums (2,608) (3,667)
Change in accrued investment income (22) 53
Change in unpaid losses and loss adjustment expenses (2,987) 2,656
Change in reinsurance recoverable on paid and unpaid losses and loss
adjustment expenses and ceded unearned premiums
1,311 (165)
Change in amounts due to reinsurers 326 340
Change in other assets and other liabilities (2,727) 3,005
Change in income taxes, net 1,556 (553)
Change in deferred policy acquisition costs (112) 194
Net realized (gain) on sale of investments (637) (1,152)
Net realized loss on sale of fixed assets 1 1
Provision for depreciation and amortization 346 330
--------------------- ---------------------
Net cash provided (used) by operating activities (3,768) 1,128
Cash flows from investing activities:
Cash received from investments sold, matured, called or repaid:
Investments available-for-sale 13,058 22,420
Cash paid for investments acquired:
Investments available-for-sale (12,244) (15,313)
Amortization of discount on bonds (26) 37
Capital expenditures, net (113) (720)
--------------------- ---------------------
Net cash provided by investing activities 675 6,424
<PAGE>
Cash flows from financing activities:
Proceeds from issuance of common stock 226 246
Change in funds held as collateral (2,738) (5,372)
Dividends paid (369) (261)
--------------------- ---------------------
Net cash (used) by financing activities (2,881) (5,387)
--------------------- ---------------------
Net increase (decrease) in cash and cash equivalents (5,974) 2,165
Cash and cash equivalents at beginning of period 6,433 5,232
--------------------- ---------------------
Cash and cash equivalents at end of period $ 459 $ 7,397
===================== =====================
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 401 $ 594
Income taxes 44 564
Cash received during the period on:
Investments sold prior to maturity $ 10,171 $ 22,120
Investments held to maturity 2,887 300
</TABLE>
See accompanying notes to interim consolidated
financial statements.
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements
(unaudited)
(1) Basis of Presentation
The interim consolidated financial statements presented herein are
unaudited and, in the opinion of management, reflect all adjustments
necessary for a fair presentation of results for such periods. All such
adjustments are of a normal, recurring nature. The results of
operations for any interim period are not necessarily indicative of
results for the full year. These consolidated financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996.
<PAGE>
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Premiums written decreased 7% from $23,208,000 for the three months
ended March 31, 1996 to $21,610,000 for the three months ended March
31, 1997. The decrease in premiums written is primarily attributable to
a $1,981,000 decrease in premiums written for the contract performance
product line for the surety operations as well as a $1,353,365 decrease
in premiums written for the private passenger automobile program in the
State of Arizona which is attributable to the significant rate
increases effective May 1, 1996 for the program. These decreases were
partially affected by increase writings in both Commercial Surety and
Court Bond production.
Net premiums earned decreased 2% from $21,835,000 for the three months
ended March 31, 1996 to $21,446,000 for the three months ended March
31, 1997. The Company generally earns premiums ratably over the
assigned bond terms for the surety operations and the policy term for
the specialty property and casualty operations.
Net losses and loss adjustment expenses decreased 30% from $10,071,000
for the three months ended March 31, 1996 to $7,068,000 for the three
months ended March 31, 1997. The loss ratio for the surety operations
improved to a loss and loss expense ratio of 25% for the three months
ended March 31, 1997 from 38% for the three months ended March 31,
1996. The improved loss ratio is reflective of decreased loss severity
in the contract performance and payment product line. The loss ratio
for the specialty property and casualty operations also improved to 58%
for the three months ended March 31, 1997 from 74% for the first three
months ended March 31, 1996. The decrease in the loss ratio is
primarily attributable to improved results on business written under
the Arizona private passenger automobile program together with
profitable results from the Company's California transportation
business.
Policy acquisition costs increased as a percentage of net premiums
earned from 43%, or $9,487,000 to 50%, or $10,821,000 for the three
months ended March 31, 1996 and 1997, respectively. This increase is
prmarily attributable to increased writings in the Court Division
during the second half of 1996 and the first quarter of 1997, which
product line has higher acquisition costs and historically more
attractive loss experience.
General operating costs decreased as a percentage of net premiums
earned from 18%, or $3,828,000 for the three months ended March 31,
1996 to 14%, or $2,903,000 for the three months ended March 31, 1997.
The improvement in the general and administrative expense ratio is
reflective of operational efficiencies associated with the merger with
Condor Services, Inc. which was consumated on March 14, 1996.
Underwriting results were a loss of $1,551,000 for the three months
ended March 31, 1996 and a gain of $654,000 for the three months ended
March 31, 1997. The combined ratio was 107% for the three months ended
March 31, 1996 as compared to 97% for the three months ended March 31,
1997, due to a combination of the factors cited above.
<PAGE>
Interest expense decreased 32% from $594,000 for the three months ended
March 31, 1996 to $401,000 for the three months ended March 31, 1997.
This decrease is attributable to a decrease in the interest rate on the
bank indebtedness from an average 7.5% for the three months ended March
31, 1996 to an average rate of 7.1% for the three months ended March
31, 1997 and a decrease in average funds held as collateral from
$34,964,000 for the three months ended March 31, 1996 to $28,560,000
for the three months ended March 31, 1997. Collateral rates are
adjusted at various times throughout the year in accordance with
general market conditions.
Net investment income decreased 7% from $1,807,000 for the three months
ended March 31, 1996 to $1,681,000 for the three months ended March 31,
1997. The decrease is primarily due to a decrease in the amount of
invested assets from $123,495,000 at March 31, 1996 to $118,098,000 at
March 31, 1997. Net realized investment gains decreased from $1,025,000
for the three months ended March 31, 1996 to $637,000 for the three
months ended March 31, 1997. The investments sold during the three
months ended March 31, 1997 were primarily equity securities and
certain fixed income investments including mortgage-backed and
municipal bond securities.
Income before income taxes increased from $120,000 for the three months
ended March 31, 1996 to $2,571,000 for the three months ended March 31,
1997 due to the factors outlined above.
The effective tax rate was 28% for the three months ended March 31,
1996 as compared to an effective rate of 31% for the three months ended
March 31, 1997. The primary reason for the variance from the corporate
income tax rate of 34% is tax advantaged income received on a portion
of the Company's investment portfolio.
Net income increased from $86,000 for the three months ended March 31,
1996 to $1,785,000 for the three months ended March 31, 1997 due to the
factors outlined above.
Liquidity and Capital Resources
As of March 31, 1997, the Company held total cash and cash equivalents
and invested assets of $118,557,000. This amount includes an aggregate
of $27,191,000 in funds held as collateral which is shown as a
liability on the Company's consolidated balance sheets. As of March 31,
1997, the Company's invested assets consisted of $101,274,000 in fixed
maturities, held at market value, $9,147,000 in common equity
securities, $3,595,000 in preferred equity securities, $2,871,000 in
other invested assets and $1,211,000 in short-term investments,
including certificates of deposit with original maturities less than
one year.
Because the Company depends primarily on dividends from its insurance
subsidiaries for its net cash flow requirements, absent other sources
of cash flow, the Company cannot pay dividends materially in excess of
the amount of dividends that could be paid by the insurance
subsidiaries to the Company. The respective domicilary state of each of
the insurance subsidiaries regulates, through the Office of the
Insurance Commissioner, the amount of dividends which can be paid by a
domestic insurance company utilizing various formula methodology.
On August 6, 1993, the Company entered into a revolving credit
agreement with Union Bank for $12,500,000 which refinanced the 1988
Loan. The loan was amended on April 24, 1995 and again on July 10, 1996
to increase the amount available under the revolving line of credit
from $12,500,000 to $15,000,000. The loan has a variable rate based
upon fluctuations in the London Interbank Offered Rate (LIBOR) with
amortizing credit line reduction each September 30, ultimately maturing
on September 30, 2001. On September 30, 1997, the revolving credit line
<PAGE>
is scheduled to be reduced to $12,000,000. The interest rate at March
31, 1997 was 7.1%. The credit agreement contains certain financial
covenants with respect to capital expenditures, business acquisitions,
liquidity ratio, leverage ratio, tangible net worth, net profit and
dividend payments.
The Company is a party to a lease with Trillium/Woodland Hills
regarding its corporate headquarters. During 1996, th Company signed a
definitive agreement to terminate the Company's lease at its Corporate
headquarters prior to its scheduled termination in August 1998. The
Company's lease at its current headquarters will now terminate on June
30, 1997. On January 26, 1996, the Company entered into a lease
agreement for new home office space in the City of Calabasas,
California. The expected occupancy date for this office space is June
1997. The lease term is for a period of 15 years and contains
provisions for scheduled lease charges. The Company's minimum
commitment with respect to this lease in 1997 is approximately
$515,000. The Company also has the option to purchase this new home
office building and land three years into the lease period at a
predetermined rate for the building, with the value of land based on
then existing market rates.
Other than the Company's obligations with respect to funds held as
collateral and the Company's obligation to pay claims as they arise,
the Company's commitments to pay principal and interest on the bank
debt and lease expenses as noted above, the Company has no significant
cash commitments.
The Company believes that its cash flows from operations and other
present sources of capital are sufficient to sustain its needs for at
least the remainder of 1997.
The Company generated $1,128,000 in cash from operating activities for
the three months March 31, 1996 as compared to using $3,768,000 for the
three months ended March 31, 1997. The Company generated $6,424,000 in
cash for investing activities for the three months ended March 31, 1996
as compared to generating $675,000 for the three months ended March 31,
1997. The Company used $5,387,000 in cash from financing activities for
the three months ended March 31, 1996 as compared to using $2,881,000
for the three months ended March 31, 1997.
The table on the next page shows, for the periods indicated, the gross
premiums written, net premiums earned, net losses and loss adjustment
expenses and loss ratios for the Company's specialty property and
casualty operations and surety operations. The surety operations are
detailed by the Company's three major types of bonds:
<PAGE>
TABLE 1
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
SUMMARY OF PREMIUMS AND LOSSES BY PRODUCT LINE
(Dollars in thousands)
<TABLE>
<CAPTION>
Three months ended Year ended
March 31, December 31,
Type of Bond 1997 1996 1996 1995
------------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Specialty Property and Casualty Operations
Gross premiums written $ 5,872 $ 7,317 $ 25,172 $ 24,101
Net premiums earned 5,373 4,934 22,421 17,872
Net losses and loss adjustment expenses 3,131 3,634 18,830 13,131
Loss ratio 58% 74% 84% 73%
Expense ratio 35% 38% 34% 41%
Combined ratio 97% 112% 118% 114%
Surety Operations
Contract performance
Gross premiums written $ 9,619 $ 11,600 $ 49,782 $ 54,039
Net premiums earned 10,934 12,042 46,158 49,736
Net losses and loss adjustment expenses 3,470 5,639 24,430 20,044
Loss ratio 32% 47% 53% 40%
Court
Gross premiums written $ 3,492 $ 2,584 $ 14,408 $ 8,571
Net premiums earned 3,253 2,677 13,054 8,749
Net losses and loss adjustment expenses 270 549 1,357 467
Loss ratio 8% 21% 10% 5%
Commercial Surety
Gross premiums written $ 2,627 $ 1,707 $ 7,980 $ 7,472
Net premiums earned 1,886 2,182 6,250 8,813
Net losses and loss adjustment expenses 196 249 2,031 1,623
Loss ratio 10% 11% 32% 18%
Total Surety
Gross premiums written $ 15,738 $ 15,891 $ 72,170 $ 70,082
Net premiums earned 16,073 16,901 65,462 67,298
Net losses and loss adjustment expenses 3,936 6,437 27,818 22,134
Loss ratio 25% 38% 42% 33%
Expense ratio 74% 68% 69% 70%
Combined ratio 98% 106% 111% 103%
</TABLE>
<PAGE>
PART II - OTHER INFORMATION
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
Items 1-5: LEGAL PROCEEDINGS, CHANGE IN SECURITIES, DEFAULTS UPON
SENIOR SECURITIES, SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS, OTHER INFORMATION
None
Item 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See the Exhibit Index on page 15.
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during
the three months ended March 31, 1997.
<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.
AMWEST INSURANCE GROUP, INC.
Date: May 13, 1997 by: /s/ JOHN E. SAVAGE
---------------------------
John E. Savage
President, Co-Chief Executive
Officer
and Chief Operating Officer
(Principal Executive Officer)
by: /s/ STEVEN R. KAY
---------------------------
Steven R. Kay
Senior Vice-President,
Chief Financial Officer,
Treasurer and Director
(Principal Financial and
Principal Accounting Officer)
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit
Number Description Location
2 Plan of acquisition, reorganization, arrangement,
liquidation or succession ............................ None
4 Instruments defining the rights of securityholders,
including indentures ................................. Not required
11 Statement re computation of per share earnings ....... Page 16
15 Letter re unaudited interim financial information .... None
18 Letter re change in accounting principles ............ None
19 Previously unfiled documents ......................... None
20 Report furnished to security holders ................. None
23 Published report regarding matters submitted to vote
of security holders .................................. None
24 Consents of experts and counsel ...................... None
25 Power of attorney .................................... None
28 Additional exhibits .................................. None
EXHIBIT 11
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Primary (2) Fully diluted (3)
earnings per share earnings per share
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Average shares outstanding for the three month
period ending March 31, ........................................................ 3,334,037 3,297,521 3,334,037 3,297,521
Incremental shares resulting from conversion of common stock equivalents:
Options to purchase shares of common stock at an exercise price of $6.14
- $15.675 (407,785 and 358,880 options at March 31, 1997 and 1996,
respectively) (1)....................................................... 23,105 45,897 23,105 45,897
--------- --------- --------- ---------
Total incremental shares resulting from
conversion of common stock equivalents
at March 31, ........................................................ 23,105 45,897 23,105 45,897
--------- --------- --------- ---------
Total shares and incremental shares resulting from
conversion of common stock equivalents at March
31, ............................................................................ 3,357,142 3,343,418 3,357,142 3,343,418
========= ========= ========= =========
Percentage of incremental shares resulting from
conversion of common stock equivalents at March
31, ............................................................................ 0.69% 1.37% 0.69% 1.37%
========= ========= ========= =========
</TABLE>
<PAGE>
EXHIBIT 11, (continued)
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(1) Outstanding options and warrants to purchase common stock.
Options to purchase shares of common stock as of March 31, 1997 and
1996, respectively:
March 31, 1997 March 31, 1996
-------------- --------------
Grant price: $6.14 3,025 3,025
Grant price: $6.82 - 1,650
Grant price: $8.375 15,375 32,250
Grant price: $9.00 5,550 6,450
Grant price: $9.10 4,785 5,005
Grant price: $9.213 - 8,500
Grant price: $9.875 10,500 10,500
Grant price: $9.90 - 1,650
Grant price: $10.375 3,000 3,000
Grant price: $10.50 4,850 5,850
Grant price: $10.625 12,750 12,750
Grant price: $10.75 25,500 27,000
Grant price: $11.125 12,000 13,000
Grant price: $11.55 1,650 1,650
Grant price: $11.825 10,000 10,000
Grant price: $12.50 17,500 -
Grant price: $12.75 4,000 4,000
Grant price: $13.375 95,700 -
Grant price: $13.875 64,200 68,700
Grant price: $14.02 1,650 1,650
Grant price: $14.25 108,250 126,250
Grant price: $14.875 7,500 7,500
Grant price: $15.675 - 8,500
------------- -------------
407,785 358,880
============= =============
(2) Calculation of incremental shares resulting from conversion of common
stock equivalents, using the Treasury Stock Method for calculating
primary earnings per share, is based on the average of the closing
prices, for the three months ended March 31, 1997 and 1996, as reported
on the American Stock Exchange.
(3) Calculation of incremental shares resulting from conversion of common
stock equivalents, using the Treasury Stock Method for calculating
fully diluted earnings per share, is based on the greater of the
average ending ask price or the closing ask price on March 31, 1997 and
1996, as reported on the American Stock Exchange.
