<PAGE>
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- - --------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______________________TO _______________________
COMMISSION FILE NUMBER 1-12338
VESTA INSURANCE GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 63-1097283
(STATE OF OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3760 RIVER RUN DRIVE 35243
BIRMINGHAM, ALABAMA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
(205) 970-7000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
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. [X] Yes [_] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
The number of shares outstanding of the registrant's common stock,
$.01 par value, as of March 31, 1996
18,919,939
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VESTA INSURANCE GROUP, INC.
INDEX
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION
<C> <S> <C>
Item 1. Financial Statements:
Consolidated Balance Sheet at March 31, 1996 and
December 31, 1995................................................. 1
Consolidated Statement of Operations for the Three
Months Ended March 31, 1996 and 1995.............................. 2
Consolidated Statement of Cash Flows for the Three
Months Ended March 31, 1996 and 1995.............................. 3
Notes to Consolidated Financial Statements........................ 4
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................... 5
<CAPTION>
PART II OTHER INFORMATION
<C> <S> <C>
Item 1. Legal Proceedings................................................. 9
Item 2. Changes in Securities............................................. 9
Item 3. Defaults Upon Senior Securities................................... 9
Item 4. Submission of Matters to a Vote of Security Holders............... 9
Item 5. Other Information................................................. 9
Item 6. Exhibits and Reports on Form 8-K.................................. 10
</TABLE>
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
VESTA INSURANCE GROUP, INC.
CONSOLIDATED BALANCE SHEET
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1996 1995
----------- -----------
<S> <C> <C>
(UNAUDITED)
Assets:
Investments:
Fixed maturities held to maturity, at amortized cost
(estimated market value:
1996--$-0-; 1995--0).............................. $-0- $ -0-
Fixed maturities available for sale--at market
(cost: 1996--$301,792; 1995--$311,157)............ 303,794 316,551
Equity securities--at market: (cost: 1996--$1,497;
1995--$595)....................................... 4,173 3,208
Real estate......................................... -- --
Short-term investments.............................. 106,652 95,927
----------- --------
Total investments.................................. 414,619 415,686
Cash................................................. 5,847 6,832
Accrued investment income............................ 6,031 5,548
Premiums in course of collection .................... 237,289 184,717
Reinsurance balances receivable...................... 70,097 74,153
Reinsurance recoverable on paid losses............... 66,139 44,335
Deferred policy acquisition costs.................... 77,488 67,831
Property and equipment............................... 3,336 3,682
Other assets......................................... 4,450 7,318
Goodwill............................................. 7,411 7,522
----------- --------
Total assets....................................... $ 892,707 $817,624
=========== ========
Liabilities:
Reserves for:
Losses and loss adjustment expenses................. 248,897 199,314
Unearned premiums................................... 188,021 168,512
----------- --------
436,918 367,826
Accrued income taxes................................. 19,638 15,969
Reinsurance balances payable......................... 24,592 27,748
Other liabilities.................................... 9,155 12,299
Short term debt...................................... 15,000 15,000
Long term debt....................................... 98,163 98,163
----------- --------
Total liabilities.................................. 603,466 537,005
Commitments and contingencies
Stockholders' equity
Preferred stock, 5,000,000 shares authorized, none
issued.............................................. -- --
Common stock, $.01 par value, 32,000,000 shares
authorized,
issued: 1996--18,919,939 shares; 1995--18,878,190... 190 189
Additional paid-in capital........................... 160,537 159,449
Unrealized investment gains (losses), net of
applicable taxes.................................... 3,040 5,205
Retained earnings.................................... 129,196 119,458
Receivable from issuance of restricted stock......... (2,847) (3,162)
Treasury stock....................................... (875) (520)
----------- --------
Total stockholders' equity......................... 289,241 280,619
----------- --------
Total liabilities and stockholders' equity......... $ 892,707 $817,624
=========== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
1
<PAGE>
VESTA INSURANCE GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
-----------------------------
1996 1995
-------------- -------------
(UNAUDITED)
<S> <C> <C>
Revenues:
Net premiums written............................ $ 152,509 $90,391
Increase in unearned premiums................... (7,373) (14,492)
-------------- -------------
Net premiums earned............................. 145,136 75,899
Net investment income........................... 4,946 3,853
Other........................................... 44 49
-------------- -------------
Total revenues............................... 150,126 79,801
Expenses:
Losses incurred................................. 80,075 43,692
Loss adjustment expenses incurred............... 3,703 1,662
Policy acquisition expenses..................... 40,167 16,120
Operating expenses.............................. 5,650 4,873
Premium taxes and fees.......................... 2,370 1,566
Interest on debt................................ 2,470 427
Goodwill........................................ 125 0
-------------- -------------
Total expenses............................... 134,560 68,340
Net income before income taxes................... 15,566 11,461
Income taxes..................................... 5,057 3,654
-------------- -------------
Net income................................... $ 10,509 $ 7,807
============== =============
Per share amounts:
Net income................................... $ .56 $ .41
============== =============
</TABLE>
See accompanying Notes to Consolidated Financial Statements
2
<PAGE>
VESTA INSURANCE GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
--------------------
1996 1995
--------- ---------
(UNAUDITED)
<S> <C> <C>
Operating Activities:
Net Income............................................... $ 10,509 $ 7,807
Adjustments to reconcile net income to cash provided from
operations:
Change in:
Loss and LAE reserves.................................. 49,583 24,278
Unearned premium reserve............................... 19,509 14,816
Reinsurance balances payable........................... (3,156) (22,496)
Accrued income taxes................................... 4,834 1,904
Other liabilities...................................... (3,144) 3,565
Premiums in course of collection....................... (52,573) (43,016)
Reinsurance balances receivable........................ 4,055 (7)
Reinsurance recoverable on paid losses................. (21,804) 7,880
Other assets........................................... 2,497 (1,440)
Policy acquisition costs deferred....................... (16,110) (10,363)
Policy acquisition costs amortized...................... 6,453 3,131
Amortization and depreciation........................... 900 671
Gain (Loss) on disposition of property, plant and equip-
ment................................................... 0 (70)
--------- --------
Net cash provided from (used in) operations............ 1,553 (13,340)
Investing Activities:
Investments sold or matured:
Fixed maturities held to maturity-matured, called....... 0 3,207
Fixed maturities available for sale-matured, called..... 10,028 701
--------- --------
Total investments sold or matured...................... 10,028 3,908
Investments acquired:
Fixed maturities available for sale..................... (1,216) (802)
Equity securities....................................... (902) 0
--------- --------
Total investments acquired............................. (2,118) (802)
Net decrease in short-term investments.................... (10,727) 3,416
Additions to property, plant and equipment................ 0 (586)
Dispositions of property, plant and equipment............. 0 319
--------- --------
Net cash provided from (used in) investing activities.. (2,817) 6,255
Financing Activities:
Dividends paid........................................... (708) (628)
Capital contributions.................................... 986 80
--------- --------
Net cash provided from (used in) financing activities.. 278 (548)
Increase (decrease) in cash............................... (986) (7,633)
Cash at beginning year.................................... 6,833 21,399
--------- --------
Cash at end of year....................................... $ 5,847 $ 13,766
========= ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
3
<PAGE>
VESTA INSURANCE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)
Basis of Presentation: The accompanying unaudited financial statements have
been prepared in conformity with generally accepted accounting principles and,
in the opinion of management, reflect all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation of results for such
periods. The results of operations and cash flows for any interim period are
not necessarily indicative of results for the full year. These financial
statements should be read in conjunction with the financial statements and
related notes in the Company's 1995 Annual Report. Certain amounts in the
financial statements presented have been reclassified from amounts previously
reported in order to be comparable between years. These reclassifications have
no effect on previously reported stockholders' equity or net income during the
period involved.
Stock Split: On January 22, 1996 Vesta Insurance distributed one share for
every two shares owned by shareholders of record as of January 5, 1996 in the
form of a stock dividend. All prior year share and per share data has been
restated to give effect for the dividend.
Earnings Per Share: Net earnings per share is calculated by dividing net
income by weighted average number of common share and common equivalent shares
outstanding including the net effect of the restricted stock grants. The
weighted average number of common shares and common equivalent shares
outstanding for the three month period ended March 31, 1996 and 1995 was
18,911,223 and 18,829,361, respectively.
4
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Vesta Insurance Group, Inc. (the "Company" or "Vesta") is a holding company
for a group of property and casualty insurance companies (the "Vesta Group")
that offer treaty reinsurance and primary insurance on personal and commercial
risks. In both its reinsurance and primary insurance operations, the Company
focuses principally on property coverages, for which ultimate losses generally
can be more promptly determined than on casualty risks. The Company's revenues
from operations are derived primarily from net premiums earned on risks
written and reinsured by the Company, investment income and investment gains
or losses, while expenses consist primarily of payments for claims losses and
underwriting expenses, including agents' commissions and operating expenses.
Comparison of First Quarter 1996 to First Quarter 1995
Net income increased by $2.7 million, or 34.6%, to $10.5 million for the
quarter ended March 31, 1996, from $7.8 million for the quarter ended March
31, 1995. On a per share basis, net income for the first quarter of 1996 was
$.56 per share versus net income of $.41 per share for the first quarter of
1995.
Gross Premiums Written; Net Premiums Written; Net Premiums Earned. Gross
premiums written increased by $83.0 million, or 74.5%, to $194.4 million for
the quarter ended March 31, 1996, from $111.4 million for the quarter ended
March 31, 1995, as gross premiums written on reinsurance risks increased by
$71.6 million and gross premiums written on primary insurance risks increased
by $11.5 million. Net premiums written increased by $62.1 million, or 68.7%,
to $152.5 million for the quarter ended March 31, 1996, from $90.4 million for
the quarter ended March 31, 1995.
Gross premiums written for reinsurance increased by $71.5 million, or 86.3%,
to $154.5 million for the quarter ended March 31, 1996, from $83.0 million for
the quarter ended March 31, 1995. This growth was attributable to an increase
in gross premiums written on pro rata business. The growth in pro-rata
reinsurance gross premiums written was due to growth in existing accounts as
well as the addition of new accounts in 1996 as compared to 1995. Net premiums
written for reinsurance increased $45.8 million, or 62.8%, to $118.7 million
for the quarter ended March 31, 1996, from $72.9 million for the quarter ended
March 31, 1995.
Gross premiums written for primary insurance increased by $11.5 million, or
40.5%, to $39.9 million for the quarter ended March 31, 1996, from $28.4
million for the quarter ended March 31, 1995 due principally to a $11.2
million increase in personal lines premiums. Gross premiums written for
personal products increased 72.3%, to $26.7 million for the quarter ended
March 31, 1996, compared to $15.5 million for the quarter ended March 31,
1995. The growth was primarily attributable to the acquisition of the Hawaiian
Insurance and Guaranty Company, Ltd. in June 1995. Gross premiums on
commercial lines rose 3.1%, from $12.8 million for the quarter ended March 31,
1995 to $13.2 million for the quarter ended March 31, 1996.
Net premiums written for primary insurance increased by $16.3 million, or
93.1%, to $33.8 million for the quarter ended March 31, 1996, from $17.5
million for the quarter ended March 31, 1995.
Net premiums earned increased by $69.2 million, or 91.2%, to $145.1 million
for the quarter ended March 31, 1996, from $75.9 million for the quarter ended
March 31, 1995. The increase in earned premiums is primarily attributable to
the increase in net written premiums for the quarter ended March 31, 1996.
5
<PAGE>
Net Investment Income. Net investment income increased by $1.0 million, or
25.6%, to $4.9 million for the quarter ended March 31, 1996, from $3.9 million
for the quarter ended March 31, 1995. The weighted average yield on invested
assets (excluding realized and unrealized gains) was 5.6% for the quarter
ended March 31, 1996, compared with 5.7% for the quarter ended March 31, 1995.
The increase in net investment income is primarily attributable to the
increase in average invested assets relating to the receipt of proceeds from
the sale by the Company of $100 million of its 8.75% Senior Debentures due
2025.
Losses and Loss Adjustment Expenses Incurred. Losses and loss adjustment
expenses ("LAE") increased by $38.4 million, or 84.6%, to $83.8 million for
the quarter ended March 31, 1996, from $45.4 million for the quarter ended
March 31, 1995. The loss and LAE ratio for the quarter ended March 31, 1996
was 57.7% as compared to 59.8% for the quarter ended March 31, 1995. This
decreased loss and LAE ratio for 1996 was due principally to better overall
results in the Company's personal lines which is partly attributable to the
acquisition of HIG, and better loss results in the reinsurance operations.
Policy Acquisition and Other Underwriting Expenses. Policy acquisition and
other underwriting expenses increased by $25.6 million, or 113.3%, to $48.2
million for the quarter ended March 31, 1996, from $22.6 million for the
quarter ended March 31, 1995. The underwriting expense ratio for the quarter
ended March 31, 1996, was 33.2%, as compared to 29.7% for the quarter ended
March 31, 1995. The increase in the underwriting expense ratio resulted
principally from increased contingent commissions on the Company's pro-rata
reinsurance business.
Federal Income Taxes. Federal income taxes increased by $1.4 million, or
37.8%, to $5.1 million for the quarter ended March 31, 1996. The effective
rate on pre-tax income increased from 31.9% to 32.5% for the quarter ended
March 31, 1996. This increase was due primarily to a smaller portion of income
from tax free municipal bonds in 1996 versus 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company is a holding company whose principal asset is its investment in
the capital stock of the companies constituting the Vesta Group, a group of
wholly owned property and casualty insurance companies including Vesta Fire.
The several insurance company subsidiaries comprising Vesta Group are
individually supervised by state insurance regulators. Vesta Fire is the
principal operating subsidiary of the Company.
As a holding company with no other business operations, the Company relies
primarily upon dividend payments from Vesta Fire to meet its cash requirements
(including its debt service) and to pay dividends to its stockholders.
Transactions between Vesta Fire and the Company, including the payment of
dividends by Vesta Fire, are subject to certain limitations under the
insurance laws of Alabama. Specifically, Alabama law permits the payment of
dividends in any year which, together with other dividends or distributions
made within the preceding 12 months, do not exceed the greater of 10% of
statutory surplus as of the end of the preceding year or the net income for
the preceding year, with larger dividends payable only after receipt of prior
regulatory approval. Based upon restrictions presently in effect, the maximum
amount available for payment of dividends to the Company by its insurance
subsidiaries in 1996 without prior approval of regulatory authorities is
approximately $32 million.
The principal uses of funds at the holding company level are to pay
operating expenses, interest on outstanding indebtedness and dividends to
stockholders. During the last three years, the insurance subsidiaries of the
Company have produced operating results sufficient to fund the needs of the
Company. There can be no assurance as to the ability of the Company's
insurance subsidiaries to continue to pay dividends at current levels.
However, the Company is not aware of any demands or
6
<PAGE>
commitments of the insurance subsidiaries that would prevent the payment of
dividends to the Company sufficient to meet the anticipated needs (including
debt service) of the Company over the next twelve months.
During the first quarter of 1996, the Company paid approximately $0.7
million in dividends on its common stock, and it is expected that the Company
will pay approximately $2.8 million for all of 1996. The Company is also
required to make semi-annual interest payments of $4.4 million on its $100
million of 8.75% Senior Debentures due 2025.
The principal sources of funds for the Company's insurance subsidiaries are
premiums, investment income and proceeds from the sale or maturity of invested
assets. Such funds are used principally for the payment of claims, operating
expenses, commissions and the purchase of investments. In order to provide
further liquidity, the Company secured a $40 million line of credit with a
group of domestic banks pursuant to a Credit Agreement, dated August 11, 1994
(the "Credit Agreement"). To date, the Company has borrowed $15 million under
this line of credit for general corporate purposes. The Credit Agreement
relating to this line of credit contains certain covenants that require, among
other things, the Company to maintain a certain consolidated net worth,
maintain a certain amount of investment income available for the payment of
interest expense, cause each insurance subsidiary to maintain a certain total
adjusted capital and which limit the amount of indebtedness the Company can
have. The Company is in compliance with these covenants.
On a consolidated basis, net cash provided from (used in) operations for the
quarters ended March 31, 1996 and 1995, was $1.6 million and $(13.3) million,
respectively. Net cash provided from operations in 1996 was due principally to
the large increase in premiums written. Cash flow during 1995 was adversely
affected by the settlement of the unearned premium portfolio transfer on the
Company's 75% personal lines quota share reinsurance contract.
Total assets of the Company increased by 9.2% to $892.7 million in 1996,
from $817.6 million in 1995. Cash and invested assets were $420.5 million at
March 31, 1996, decreasing 0.5% from December 31, 1995.
As of March 31, 1996, the Company's investment portfolio consisted of cash
and short-term investments (26.8%), U.S. Government securities (8.0%),
mortgage-backed securities (2.2%), corporate bonds (22.0%), foreign government
securities (0.5%), municipal bonds (39.6%) and equity securities (0.9%).
According to Moody's, 98.1% of the Company's portfolio is rated A or better.
The Company expects current cash flow to be sufficient to meet operating
needs, although invested assets have been categorized as available for sale in
the event short-term cash needs exceed available resources. The Company
adjusts its holdings of cash, short-term investments and invested assets
available for sale according to its seasonal cash flow needs. Beginning in
June of each year, the Company begins to increase its holdings of cash and
short-term investments. This practice facilitates the Company's ability to
meet its higher short-term cash needs during the hurricane season.
On June 19, 1995, the Company acquired all of the issued and outstanding
stock of HIG, a property and casualty insurance company headquartered and
doing business in the State of Hawaii, for a cash purchase price, including
expenses, of $36 million. The purchase price was funded with cash from
operations. The use of cash to fund this transaction has not had a material
effect on the Company's liquidity. To the contrary, revenues generated from
HIG's operations have had a positive effect on the Company's liquidity.
On July 19, 1995, the Company sold $100 million of 8.75% Senior Debentures
due 2025. The proceeds from the sale were used to repay the Company's $28
million loan from UIMCO, a subsidiary of Torchmark. The Company used the
remainder of the proceeds to increase the capital and surplus of its principal
insurance subsidiary, Vesta Fire Insurance Corporation.
7
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company, through its subsidiaries, is routinely a party to pending or
threatened legal proceedings and arbitrations. These proceedings involve
alleged breaches of contract, torts, including bad faith and fraud claims and
miscellaneous other specified relief. Based upon information presently
available, and in light of legal and other defenses available to the Company
and its subsidiaries, management does not consider liability from any
threatened or pending litigation to be material.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
8
<PAGE>
EXHIBITS INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
3.1 Restated Certificate of Incorporation of the Company, dated
September 1, 1993 (filed as an exhibit to Amendment No. 1 to
the Registration Statement on Form S-1 (Registration No. 33-
68114) of Vesta Insurance Group, Inc., filed on October 18,
1993 and incorporated herein by reference (File No. 1-12338)).
3.2 By-Laws of the Company (Amended and Restated as of October 1,
1993) (filed as an exhibit to Amendment No. 1 to the Registra-
tion Statement on Form S-1 (Registration No. 33-68114) of
Vesta Insurance Group, Inc., filed on October 18, 1993 and in-
corporated herein by reference (File No. 1-12338)).
4.1 Indenture between the Company and Southtrust Bank of Alabama,
National Association, dated as of July 19, 1995 (filed as an
exhibit to the Company's Form 10-K for the year ended December
31, 1995, filed on March 28, 1996 and incorporated herein by
reference (File No. 1-12338)).
4.2 Supplemental Indebenture between the Company and Southtrust
Bank of Alabama, National Association, dated July 19, 1995
(filed as an exhibit to the Company's Form 10-K for the year
ended December 31, 1995, filed on March 28, 1996 and incorpo-
rated herein by reference (File No. 1-12338)).
10.1 Separation and Public Offering Agreement between Torchmark
Corporation and the Company dated September 13, 1993 (filed as
an exhibit to the Company's Form 10-K for the year ended De-
cember 31, 1993, filed on March 28, 1994 and incorporated
herein by reference (File No. 1-2338)).
10.2 Marketing and Administrative Services Agreement between Lib-
erty National Fire Insurance Company, Liberty National Insur-
ance Corporation and Liberty National Life Insurance Company
dated September 13, 1993 (filed as an exhibit to the Company's
Form 10-K for the year ended December 31, 1993, filed on March
28, 1994 and incorporated herein by reference (File No. 1-
2338)).
10.3 Investment Services Agreement between Waddell & Reed Asset
Management Company and the Company (filed as an exhibit to
Amendment No. 1 to the Registration Statement on Form S-1
(Registration No. 33-68114) of Vesta Insurance Group, Inc.,
filed on October 18, 1993 and incorporated herein by reference
(File No. 1-12338)) dated September 13, 1993.
10.5 Management Agreement between J. Gordon Gaines, Inc., Liberty
National Fire Insurance Company, Sheffield Insurance Corpora-
tion, Liberty National Insurance Corporation and Vesta Insur-
ance Corporation dated November 15, 1994 (filed as an exhibit
to the Company's Form 10-K for the year ended December 31,
1993, filed on March 28, 1994 and incorporated herein by ref-
erence (File No. 1-2338)).
10.6 Form of Restricted Stock Agreement (filed as an exhibit to the
Registration Statement on Form S-1 (Registration No. 33-68114)
of Vesta Insurance Group, Inc., filed on August 31, 1993 and
incorporated herein by reference (File No. 1-12338)).
10.7* The Company's Long Term Incentive Plan as amended effective as
of May 16, 1995 (filed as an exhibit to the Company's Form 10Q
for the quarter ended June 30, 1995, filed on August 14, 1995
and incorporated herein by reference (File No. 1-12338)).
10.8* Form of Non-Qualified Stock Option Agreement entered into by
and between the Company and certain of its executive officers
and directors (filed as an exhibit to the Company's Form 10-K
for the year ended December 31, 1995, filed on March 28, 1996
and incorporated herein by reference (File No. 1-12338)).
10.9* Cash Bonus Plan of the Company (filed as an exhibit to the
Company's Form 10-K for the year ended December 31, 1993,
filed on March 28, 1994 and incorporated herein by reference
(File No. 1-2338)).
10.10* J. Gordon Gaines, Inc. Post Retirement Benefits Plan (filed as
an exhibit to the Company's Form 10-K for the year ended De-
cember 31, 1994, filed on March 29, 1995 and incorporated
herein by reference (File No. 1-12338)).
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.11* J. Gordon Gaines, Inc. Retirement Savings Plan (filed as an
exhibit to the Company's Form 10-K for the year ended December
31, 1994, filed on March 29, 1995 and incorporated herein by
reference (File No. 1-12338)).
10.12* The Company's Non-Employee Director Stock Plan (filed as an
exhibit to the Company's
10-Q for the quarter ended June 30, 1995, filed on August 14,
1995 and incorporated herein by reference (File No. 1-12338)).
10.13 Office Lease between the Company and Torchmark Development
Corporation, dated as of April 20, 1992 (filed as an exhibit
to the Company's Form 10-K for the year ended December 31,
1993, filed on March 28, 1994 and incorporated herein by ref-
erence (File No. 1-12338)).
10.14 Agency Agreement between Liberty National Fire Insurance Com-
pany, Vesta Insurance Corporation, Sheffield Insurance Corpo-
ration, and Overby-Seawell Company (filed as an exhibit to
Amendment No. 1 to the Registraion Statement on Form S-1 (Reg-
istration No. 33-68114) of Vesta Insurance Group, Inc., filed
on October 18, 1993 and incorporated herein by reference (File
No. 1-12338)).
10.15 Commercial/Personal Property Risk Excess Reinsurance Con-
tracts, dated July 1, 1993,
constituting the Company's Direct Per Risk Treaty Program, be-
tween Vesta Fire Insurance Corporation, Sheffield Insurance
Corporation, Vesta Insurance Corporation, Vesta Lloyds Insur-
ance Company and various reinsurers (filed as an exhibit to
Amendment No. 1 to the Registration Statement on Form S-1
(Registration No. 33-68114) of Vesta Insurance Group, Inc.,
filed on October 18, 1993 and incorporated herein by reference
(File No. 1-12338)) Renewed July 1, 1995.
10.16 Catastrophe Reinsurance Contracts, dated July 1, 1995, consti-
tuting the Company's Direct Property Catastrophe Program, be-
tween Vesta Fire Insurance Corporation, Vesta Insurance Corpo-
ration, Sheffield Insurance Corporation, Vesta Lloyds Insur-
ance Company and various reinsurers (filed as an exhibit to
the Company's Form 10-K for the year ended December 31, 1994,
filed on March 29, 1995 and incorporated herein by reference
(File No. 1-12338)).
10.17 Specific Regional Castastrophe Excess Contracts, dated January
1, 1996, constituting the Company's Regional Property Catas-
trophe Program, between Vesta Fire Insurance Corporation and
various reinsurers (filed as an exhibit to the Company's Form
10-K for the year ended December 31, 1995, filed on March 28,
1996 and incorporated herein by reference (File No. 1-12338)).
10.18 Casualty Excess of Loss Reinsurance Agreements, dated January
1, 1994, constituting the Company's Casualty Excess of Loss
Reinsurance Program, between Vesta Fire Insurance Corporation,
Vesta Insurance Corporation, Sheffield Insurance Corporation,
Vesta Lloyds Insurance Company and various reinsurers (filed
as an exhibit to the Company's Form 10-K for the year ended
December 31, 1993, filed on March 28, 1994 and incorporated
herein by reference (File No. 1-12338)). Renewed January 1,
1996.
10.19 Quota Share Reinsurance Contract, dated December 31,1994, cov-
ering the Company's Personal Lines Property and Mortgage Secu-
rity Property business between Vesta Fire Insurance Corpora-
tion, Sheffield Insurance Corporation, Vesta Insurance Corpo-
ration, Vesta Lloyds Insurance Company and various reinsurers.
(filed as an exhibit to the Company's Form 10-K for the year
ended December 31, 1994, filed on March 29, 1995 and incorpo-
rated herein by reference (File No. 1-12338)). Renewed January
1, 1996.
10.20 Credit Agreement between Vesta Insurance Group, Inc. and Com-
pass Bank, Southtrust Bank of Alabama, N.A., First Union Bank
and Compass Bank, as agent dated August 11, 1994 (filed as an
exhibit to the Company's Form 10-Q for the quarter-ended Sep-
tember 30, 1994, filed on November 9, 1994 and incorporated
herein by reference (File No. 1-12338)).
10.21 Amendment to Catastrophe Reinsurance Contracts, dated July 1,
1995, constituting the Company's Direct Property Catastrophe
Program, between Vesta Fire Insurance Corporation, Vesta In-
surance Corporation, Sheffield Insurance Corporation, Vesta
Lloyds Insurance Company, Hawaiian Insurance & Guaranty Compa-
ny, Limited and various reinsurers. (Filed as an exhibit to
the Company's Form 10-Q for the quarter ended September 30,
1995, filed on November 14, 1995 and incorporated herein by
reference (File No. 1-12338)).
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.22 Amendment to Catastrophe Reinsurance Contracts, dated January
1, 1996, constituting the Company's Direct Property Catastro-
phe Program, between Vesta Fire Insurance Corporation, Vesta
Insurance Corporation, Sheffield Insurance Corporation, Vesta
Lloyds Insurance Company, Hawaiian Insurance & Guaranty Compa-
ny, Limited and various reinsurers (filed as an exhibit to the
Company's Form 10-K for the year ended December 31, 1995,
filed on March 28, 1996 and incorporated herein by reference
(File No. 1-12338)).
</TABLE>
- - --------
*These are the Company's compensatory plans.
B) REPORTS ON FORM 8-K.
None.
11
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED
THEREUNTO DULY AUTHORIZED.
VESTA INSURANCE GROUP, INC.
Date: May , 1996 /s/ Brian R. Meredith
---------------------------------------
Brian R. Meredith
Vice President, Finance
(Principal Financial and Accounting
Officer)
12
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0
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