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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
(CHECK ONE): / /Form 10-K / /Form 20-F / /Form 11-K /X/Form 10-Q / /Form N-SAR
For Period Ended: September 30, 2000
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/ / Transition Report on Form 10-K
/ / Transition Report on Form 20-F
/ / Transition Report on Form 11-K
/ / Transition Report on Form 10-Q
/ / Transition Report on Form N-SAR
For the Transition Period Ended:
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READ INSTRUCTION (ON BACK PAGE) BEFORE PREPARING FORM. PLEASE PRINT OR TYPE.
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
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If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
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PART I -- REGISTRANT INFORMATION
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Full Name of Registrant
Enhance Financial Services Group Inc.
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Former Name if Applicable
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Address of Principal Executive Office (Street and Number)
335 Madison Avenue
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City, State and Zip Code
New York, New York 10017
PART II -- RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate)
(a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or
expense;
(b) The subject annual report, semi-annual report, transition report
on Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion thereof,
/ x / will be filed on or before the fifteenth calendar day following
the prescribed due date; or the subject quarterly report of
transition report on Form 10-Q, or portion thereof will be filed
on or before the fifth calendar day following the prescribed due
date; and
(c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q,
N-SAR, or the transition report or portion thereof, could not be filed within
the prescribed time period.
See attached sheet.
(ATTACH EXTRA SHEETS IF NEEDED)
Potential persons who are to
respond to the collection of
information contained in this
form are not required to respond
unless the form displays a
currently valid OMB control number.
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PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
Samuel Bergman or Bret Derman (212) 983-3100
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period
that the registrant was required to file such report(s) been filed? If
answer is no, identify report(s). / x / Yes / / No
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(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected
by the earnings statements to be included in the subject report or
portion thereof? / x / Yes / / No
If so, attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
See attached.
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Enhance Financial Services Group Inc.
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(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date By
November 14, 2000 /s/ Daniel Gross
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Daniel Gross
President and Chief Executive
Officer
INSTRUCTION: The form may be signed by an executive officer of the registrant
or by any other duly authorized representative. The name and title of the
person signing the form shall be typed or printed beneath the signature. If
the statement is signed on behalf of the registrant by an authorized
representative (other than an executive officer), evidence of the
representative's authority to sign on behalf of the registrant shall be filed
with the form.
____________________________________ATTENTION__________________________________
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL
VIOLATIONS (SEE 18 U.S.C. 1001).
_______________________________________________________________________________
GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 (17 CFR 240.12b-25) of the General
Rules and Regulations under the Securities Exchange Act of 1934.
2. One signed original and four conformed copies of this form and amendments
thereto must be completed and filed with the Securities and Exchange
Commission, Washington, D.C. 20549, in accordance with Rule O-3 of the
General Rules and Regulations under the Act. The information contained in
or filed with the form will be made a matter of public record in the
Commission files.
3. A manually signed copy of the form and amendments thereto shall be filed
with each national securities exchange on which any class of securities of
the registrant is registered.
4. Amendments to the notifications must also be filed on form 12b-25 but need
not restate information that has been correctly furnished. The form shall
be clearly identified as an amended notification.
5. ELECTRONIC FILERS. This form shall not be used by electronic filers unable
to timely file a report solely due to electronic difficulties. Filers unable
to submit a report within the time period prescribed due to difficulties in
electronic filing should comply with either Rule 201 or Rule 202 of
Regulation S-T (Section 232.201 or Section 232.202 of this chapter) or apply
for an adjustment in filing date pursuant to Rule 13(b) of Regulation S-T
(Section 232.13(b) of this chapter).
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Form 12b-25
Enhance Financial Services Group Inc.
(for Form 10-Q for Period Ended 9/30/2000)
Part III - Narrative
On November 13, 2000, the registrant entered into an agreement (the "Merger
Agreement") providing for the merger of the registrant with a wholly owned
subsidiary of Radian Group, Inc. As a result, either the registrant or
Residential Funding Corporation ("RFC") is expected to terminate, as
permitted thereby, an agreement they had executed in September 2000 for the
sale to a subsidiary of RFC of the registrant's indirectly held 46% interest
in Credit-Based Asset Servicing and Securitization LLC and interests in a
portfolio of residual mortgage-backed securities that consist of residual
interests in real estate mortgage investment conduits (the "REMIC
portfolio"). As a result of the termination of the agreement with RFC, the
registrant will neither incur nor record in the unaudited consolidated
financial statements to be contained in the subject Form 10-Q, a loss and a
reversal of certain tax benefits associated with the registrant's investment
in the REMIC portfolio that would have resulted from the transaction with
RFC. This change in circumstances has required significant "last-minute"
revision of the registrant's unaudited consolidated financial statements for
the third quarter and nine months ended September 30, 2000.
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Form 12b-25
Enhance Financial Services Group Inc.
(for Form 10-Q for Period Ended 9/30/2000)
Part IV (3) - Explanation of Anticipated Change
The registrant had net income of $15.6 million in the third quarter of 2000
compared to net income of $22.4 million in the third quarter of 1999. Third
quarter 2000 basic and diluted earnings per share were $.41 and $.40,
respectively compared to $.59 and $.57, respectively, in the third quarter of
1999. The decrease in net earnings is primarily due to loss on sale of
certain assets of a subsidiary ($1.4 million); restructuring costs, including
severance in connection with the wind-down of the registrant's Singer Asset
Finance Company, L.L.C. ("Singer") subsidiary ($7.5 million); break-up fees
of $4.0 million which become payable upon the termination of the agreement to
sell the registrant's interest in Credit-Based Asset Servicing and
Securitization LLC ("C-BASS") affiliate, which will be required in connection
with the consummation of the transactions contemplated by the Merger
Agreement; a $2.1 million loss on Credit2B.com Inc. ("Credit2B"), a newly
formed subsidiary; $1.7 million higher policy acquisition costs; and a $13.0
million decrease in assignment sales; partially offset by $9.1 million of
increased income tax benefits, a $1.1 million increase in earned premiums,
$1.8 million lower loss and loss adjustment expenses and a $11.3 million
decrease in operating expenses primarily related to Singer.
The registrant had net income of $9.8 million for the first nine months of
2000 compared to net income of $64.0 million in the first nine months of
1999. Basic and diluted earnings per share were $0.26 and $0.25,
respectively, in the first nine months of 2000 compared to $1.69 and $1.64,
respectively, for the same period of 1999. The decrease in net income is
primarily due to $22.1 million for the write off of goodwill at Singer; a
$19.4 million decrease in assignment sales; a $13.5 million increase in
incurred losses and loss adjustment expenses; $7.5 million for severance and
related shutdown costs of Singer; $4.2 million for the termination of the
registrant's New Products/Ventures Group; a $4.1 million increase in policy
acquisition costs, $4.0 million for the break-up fee which become payable
upon the termination of the agreement to sell C-BASS, a $2.5 million loss on
Credit2B, $2.0 million for the recognition of a servicing liability, a $1.4
for an employee arbitration award; and $1.4 million for a loss on the sale of
certain assets of a subsidiary; partially offset by a $12.5 million increase
in income tax benefits, a $6.1 million increase in earned premiums, a $4.5
million increase in investment income, a $3.1 million decrease in capital
losses and a $2.0 million decrease in operating expenses.
