<PAGE>   1
                       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 September 30, 1997
                                       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 November 7, 1997, 1,962,410 shares of registrant's common stock, $3.33 
1/3 par value, were outstanding.




<PAGE>   2
                    AMERICAN INDEMNITY FINANCIAL CORPORATION
                                AND SUBSIDIARIES

Item 1.  Financial Statements

                  Consolidated Statements of Operations for the
                 Three Months Ended September 30, 1997 and 1996
                                    Unaudited
<TABLE>
<CAPTION>
                                                       1997                1996
                                                 -----------------   -----------------
<S>                                                <C>               <C>              
PREMIUMS AND OTHER INCOME:
Premiums earned                                    $ 16,904,968      $ 16,527,013
Net investment income (net of investment
  expenses of $92,736 in 1997 and $100,733
  in 1996)                                            1,088,516         1,179,821
Realized investment gains                               342,040           425,092
Interest on premium bills receivable and other
  income                                                241,287           192,258
                                                   ------------      ------------
                               TOTAL                 18,576,811        18,324,184
                                                   ------------      ------------

EXPENSES:
Losses and loss adjustment expenses                  11,844,334        11,409,360
Policy acquisition costs                              6,518,850         6,229,392
Retrospective premium adjustments on workers'
  compensation policies                                (177,429)          (11,499)
                                                   ------------      ------------
                               TOTAL                 18,185,755        17,627,253
                                                   ------------      ------------

NET INCOME BEFORE FEDERAL INCOME TAX                    391,056           696,931

PROVISION FOR FEDERAL INCOME TAX:
Current
Deferred                                                 54,000
                                                   ------------      ------------
                               TOTAL                     54,000
                                                   ------------      ------------

NET INCOME                                         $    337,056      $    696,931
                                                   ============      ============

AVERAGE SHARES OUTSTANDING                            1,962,410         1,948,610

EARNINGS PER SHARE:
NET INCOME                                         $       0.17      $       0.36
                                                   ============      ============

DIVIDENDS DECLARED PER SHARE                       $      0.075      $      0.075
                                                   ============      ============
</TABLE>


                 See Notes to Consolidated Financial Information


<PAGE>   3
                    AMERICAN INDEMNITY FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                  CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
                  NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                    UNAUDITED
<TABLE>
<CAPTION>
                                                        1997               1996
                                                  --------------     --------------
<S>                                               <C>                <C>              
PREMIUMS AND OTHER INCOME:                         
Premiums earned                                    $ 48,585,717      $ 50,167,518
Net investment income (net of investment
  expenses of $290,113 in 1997 and $294,793
  in 1996)                                            3,254,544         3,411,671
Realized investment gains                               636,563           648,917
Interest on premium bills receivable and other
  income                                                617,397           548,352
                                                   ------------      ------------
                               TOTAL                 53,094,221        54,776,458
                                                   ------------      ------------

EXPENSES:
Losses and loss adjustment expenses                  34,751,112        35,526,326
Policy acquisition costs                             18,400,874        18,687,193
Retrospective premium adjustments on workers'
  compensation policies                                (427,694)          (32,807)
                                                   ------------      ------------
                               TOTAL                 52,724,292        54,180,712
                                                   ------------      ------------

NET INCOME BEFORE FEDERAL INCOME TAX                    369,929           595,746

PROVISION (CREDIT) FOR FEDERAL INCOME TAX:
Current                                                  (3,201)
Deferred                                                (93,000)
                                                   ------------      ------------
                               TOTAL                    (96,201)
                                                   ------------      ------------

NET INCOME                                         $    466,130      $    595,746
                                                   ============      ============

AVERAGE SHARES OUTSTANDING                            1,961,360         1,947,910

EARNINGS PER SHARE:
NET INCOME                                         $       0.24      $       0.31
                                                   ============      ============

DIVIDENDS DECLARED PER SHARE                       $       .225      $       .225
                                                   ============      ============
</TABLE>


                 See Notes to Consolidated Financial Information





<PAGE>   4



                    AMERICAN INDEMNITY FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
                                    UNAUDITED
<TABLE>
<CAPTION>
                                                             1997              1996
                                                        --------------    --------------
<S>                                                     <C>                    <C>                  
ASSETS

Investments:
  Fixed maturities - bonds:
    Available for sale                                  $ 69,971,519     $ 72,110,261
  Preferred stocks                                         1,016,725        1,377,438
  Common stocks                                           16,124,686       12,420,256
  Mortgage loans on real estate                               15,706           19,710
                                                        ------------     ------------
            Total Investments                             87,128,636       85,927,665
Cash and Cash Equivalents                                  3,849,844        4,349,953
Accrued Investment Income                                    829,061          826,791
Premiums in Course of Collection                           6,277,653        4,093,476
Direct Premium Bills Receivable                           13,546,129        9,659,722
Reinsurance Balances Receivable                           18,698,549       18,689,412
Prepaid Reinsurance Premiums                                 483,107          651,050
Property and Equipment - less accumulated deprecia-
  tion of $5,343,673 in 1997 and $4,954,633 in 1996        3,920,050        4,072,394
Deferred Policy Acquisition Costs                          9,587,331        9,375,133
Deferred Income Taxes                                      4,836,000        4,743,000
Other Assets                                               4,023,700        2,511,152
                                                        ============     ============
            TOTAL                                       $153,180,060     $144,899,748
                                                        ============     ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Unpaid Losses and Loss Adjustment Expenses              $ 53,962,673     $ 55,601,929
Unearned Premiums                                         36,812,517       36,325,073
Reinsurance Balances Held or Payable                       5,010,499        1,657,874
Notes Payable to Bank                                        454,037          515,981
Accounts Payable and Other Accrued Liabilities            12,376,602        9,179,918
                                                        ------------     ------------
            Total Liabilities                            108,616,328      103,280,775
                                                        ------------     ------------

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 1,962,410
    in 1997 and 1,949,110 in 1996                          6,541,351        6,506,351
  Paid-in surplus                                         13,097,668       13,061,709
  Unrealized appreciation in market value
    of investments                                         4,929,601        2,080,388
  Retained earnings                                       19,995,112       19,970,525
                                                        ------------     ------------

            Total Stockholders' Equity                    44,563,732       41,618,973
                                                        ------------     ------------

            TOTAL                                       $153,180,060     $144,899,748
                                                        ============     ============
</TABLE>

                 See Notes to Consolidated Financial Information

<PAGE>   5

                    AMERICAN INDEMNITY FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                  CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
                  NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                    UNAUDITED
<TABLE>
<CAPTION>
                                                               1997              1996
                                                         ---------------   ---------------
<S>                                                      <C>                    <C>                 
OPERATING ACTIVITIES:

  Net Income                                             $    466,130      $    595,746
  Adjustments to reconcile net income to
    net cash flow from operating activities:
    Decrease (Increase) in:
      Premiums in course of collection                     (2,184,177)       (1,838,905)
      Direct premium bills receivable                      (3,886,407)       (1,318,518)
      Reinsurance balances receivable                          (9,137)         (870,859)
      Prepaid reinsurance premiums                            167,943            70,224
      Deferred policy acquisition costs                      (212,198)         (713,494)
      Deferred income taxes                                   (93,000)
      Other assets                                         (1,512,547)         (500,144)
    Increase (Decrease) in:
      Unpaid losses and loss adjustment expenses           (1,639,256)        1,090,902
      Unearned premiums                                       487,444         2,334,654
      Reinsurance balances held or payable                  3,352,625           520,149
      Accounts payable and other accrued liabilities        3,196,684           476,121
    Realized investment (gains) losses                       (636,564)         (648,917)
    Depreciation                                              344,739           340,263
    Other                                                      42,522           (10,752)
                                                         ------------      ------------

          Net cash flow from operating activities          (2,115,199)         (473,530)
                                                         ------------      ------------

INVESTING ACTIVITIES:

  Sale of bonds                                             3,705,528         6,939,258
  Maturity of bonds                                         3,217,277         7,119,196
  Sale of preferred stocks                                                      184,396
  Redemption of preferred stocks                              405,302           605,368
  Sale of common stocks                                     1,413,215         2,881,265
  Purchase of bonds                                        (3,747,096)      (16,856,177)
  Purchase of common stocks                                (2,758,216)       (1,000,606)
  Purchase of property and equipment                         (192,395)         (302,840)
  Maturity of long-term certificates of deposit                                  10,000
  Other                                                         4,004             3,624
                                                         ------------      ------------

          Net cash flow from investing activities           2,047,619          (416,516)
                                                         ------------      ------------

FINANCING ACTIVITIES:

  Proceeds received from bank loan                                              580,500
  Payments on bank loan                                       (61,944)          (44,755)
  Cash dividends paid to stockholders                        (441,544)         (438,315)
  Proceeds received from exercise of stock options             70,959            12,760
                                                         ------------      ------------

          Net cash flow from financing activities            (432,529)          110,190
                                                         ------------      ------------

          Net Increase (Decrease) in Cash and Cash
             Equivalents                                     (500,109)         (779,856)

          Cash and Cash Equivalents, January 1              4,349,953         4,781,566
                                                         ------------      ------------

          Cash and Cash Equivalents, September 30        $  3,849,844      $  4,001,710
                                                         ============      ============

                 See Notes to Consolidated Financial Information
</TABLE>


<PAGE>   6

                    AMERICAN INDEMNITY FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL INFORMATION

-------------------------------------------------------------------------------

(1)    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,
       1996. 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 September 30, 1997 and December 31, 1996 are as follows:

<TABLE>
<CAPTION>

                                          September 30, 1997     December 31, 1996
                                          ------------------     -----------------
<S>                                       <C>                     <C> 
Deferred tax liabilities: 

Deferred policy acquisition costs          $ (3,259,693)          $ (3,187,545)
Differences between book and tax
  basis of property                            (341,035)              (320,161)
Unrealized investment gains                  (1,676,064)              (707,332)
 Other                                         (349,399)              (341,959)
                                           ------------           ------------
                                             (5,626,191)            (4,556,997)
                                           ------------           ------------
Deferred tax assets:
Reserves not currently deductible             5,249,049              5,167,237
Operating loss carryforwards                 12,384,112             12,189,198
                                           ------------           ------------
                                             17,633,161             17,356,435
                                           ------------           ------------
Net Asset                                    12,006,970             12,799,438
Valuation allowance                          (7,170,970)            (8,056,438)
                                           ------------           ------------
Net deferred tax assets                    $  4,836,000           $  4,743,000
                                           ============           ============

</TABLE>

The credit for income tax for the nine months ended September 30, 1997 was
$96,201. The Company did not pay any federal income taxes during the first nine
months of 1997, whereas the company paid $15,000 in federal income taxes during
the first nine months of 1996.

The Company has net operating loss carryforwards for tax purposes of
$36,423,860, 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-$4,604,277; 2011 - $1,133,330; and 2012 -
$573,278.


<PAGE>   7





(3)   The Company paid total interest expense of $32,076 and $28,372 for the
      nine months ended September 30, 1997 and September 30, 1996, respectively.

(4)   In February 1997, the Financial Accounting Standards Board ("FASB")
      issued Statement No. 128, "Earnings Per Share" ("SFAS No. 128"). SFAS No.
      128, which is effective for periods ending after December 15, 1997,
      establishes standards for computing and presenting earnings per share
      ("EPS"). SFAS No. 128 replaces the presentation of primary EPS previously
      prescribed by Accounting Principles Board Opinion No. 15 ("APB No. 15")
      with a presentation of basic EPS, which is computed by dividing income
      available to common stockholders by the weighted-average number of common
      shares outstanding for the period. SFAS No. 128 also requires dual
      presentation of basic and diluted EPS. Diluted EPS is computed similar to
      fully diluted EPS pursuant to APB No. 15. Pro forma basic and diluted EPS
      for all historical periods presented, assuming that SFAS No. 128 was
      effective at the beginning of each such historical period, would not be
      materially different from what has been presented using APB No. 15.

      Also in February 1997, the FASB issued SFAS No. 129, "Disclosure of
      Information about Capital Structure", which establishes standards for
      disclosing information about an entity's capital structure. SFAS No. 129
      is effective for periods ending after December 15, 1997. The Company
      believes that its disclosures already comply with the requirements of SFAS
      No. 129.

      In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
      Income", and SFAS No. 131, "Disclosures About Segments of an Enterprise
      and Related Information". SFAS No. 130 establishes standards for reporting
      and displaying of comprehensive income and its components. SFAS No. 131
      establishes standards for the way that public business enterprises report
      information about operating segments and related information in interim
      and annual financial statements. SFAS Nos. 130 and 131 are effective for
      periods beginning after December 15, 1997. Management is evaluating what,
      if any, additional disclosures may be required upon the implementation of
      SFAS Nos. 130 and 131.



<PAGE>   8



                    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 nine months ended
September 30, 1997 was negative primarily as a result of unfavorable
underwriting results in the commercial automobile line of business during the
first nine months of 1997. The unfavorable underwriting results for the
commercial automobile line of business were due primarily to the occurrence of
several large liability claims in the period. Management believes that these
claims are not indicative of a trend.

         The net cash flow from operating activities for the nine months ended
September 30, 1996 was negative primarily as a result of unfavorable
underwriting results. The underwriting results during the first nine months of
1996 were caused primarily by the occurrence of several weather-related natural
catastrophes in the period.

     INVESTING ACTIVITIES

         The net cash flow from investing activities was positive for the first
nine months of 1997 because total investment sales and maturities exceeded total
investment purchases. During the first nine months of 1997, the Company's cash
flow from operating activities was negative. As a result, additional funds were
raised through the sale of investments. However, whenever possible, management
invested a portion of available cash balances and the proceeds received from
disposition of investments into investment grade bonds and common stocks.

         During the first nine months of 1997, unrealized investment gains
increased stockholders' equity by approximately $2,849,000, of which
approximately $1,099,000 of this amount was from debt securities, with the
remaining gains from equity securities. These unrealized investment gains were
primarily the result of overall favorable investment market conditions during
the first nine months of 1997.

         The $1,099,000 unrealized investment gains on debt securities included
approximately $754,000 unrealized investment gains related to six derivative
issues purchased by the Company in 1993. On September 30, 1997, the value
carried in the Company's balance sheet for these six issues was approximately
$19,396,000. 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 a
corresponding impact on the Company's stockholders' equity. The derivative
securities



<PAGE>   9


previously mentioned 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 with respect to certain of
these securities, net investment income during the final quarter of 1997 earned
by these securities should not change significantly compared to the
corresponding period in 1996. 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. 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 (Guaranteed 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. As of September 30, 1997, the remaining
amount guaranteed, reduced by settlements received, is approximately $554,000.
This guarantee was originally 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 in the amount of $500,000 expired in December 1996.
At September 30, 1997, the stated interest rate for the Guaranteed Yield
Security was .063% and the guaranteed yield rate was 5.17%. Based on such
guaranteed yield rate, and assuming no change in the yield rate that determines
the guaranteed yield rate, net investment income earned by this security during
the final quarter of 1997 should not change significantly compared with the
corresponding period in 1996.

         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 September 30, 1997 was
determined based upon the market values of other securities with similar yield
resets and similar maturities. As a result, the market value for this security
as carried on the Company's balance sheet as of September 30, 1997 was
approximately $10,975,470.

         During the first nine 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 negative in the first nine months of 1996 as total
investment purchases exceeded total investment sales and maturities.


<PAGE>   10


    FINANCING ACTIVITIES


         There were no new financing commitments entered into in the first nine
months of 1997 and no significant increase in the cost of current financing
arrangements. The net cash flow from financing activities was negative for the
first six months of 1997 as a result of cash dividends paid to stockholders.
During the first nine months of 1997, the Company received approximately $71,000
in proceeds from the exercise of incentive stock options, whereas, during the
first nine months of 1996 the Company received approximately $13,000 in proceeds
from the exercise of incentive stock options.

         In January, 1996, the Company received $580,500 proceeds from a loan
from United States National Bank. 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 nine months of 1996.

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.

RESULTS OF OPERATIONS

         Premiums earned increased 2.3% and decreased 3.2%, respectively, for
the three months and nine months ended September 30, 1997 compared with the
corresponding 1996 periods. Net premiums written increased 5.6% and decreased
6.3%, respectively, for the three months and nine months ended September 30,
1997 compared with the same 1996 periods. These decreases for the nine months
ended September 30, 1997 are primarily the result of experience based premium
increases due reinsurers charged to the Company under the retrospective premium
adjustment provisions of its casualty reinsurance contract.

         As previously discussed, the Company raised additional funds through
the sale of investments to offset the negative cash flow from unfavorable
operating results during the first nine months of 1997. These sales resulted in
a decrease in invested assets; however, this decrease was largely offset by
unrealized gains in market value of investments experienced during the first
nine months of 1997, resulting in an increase in average invested assets of
approximately $194,000 at September 30, 1997 compared with September 30, 1996.
Additionally, net investment income decreased 7.7% and 4.6% , respectively, for
the three months and nine months ended September 30, 1997 compared with the same
1996 periods, primarily as a result of the sale of invested assets. This
decrease in net investment income reduced the Company's average investment yield
to 5.02% for the nine months ended September 30, 1997 compared with 5.27% for
the nine months ended September 30, 1996.



<PAGE>   11



         The loss and loss adjustment expense ratio was 70.1% for the three
months ended September 30, 1997 compared with 69.0% for the three months ended
September 30, 1996 and was 71.5% for the nine months ended September 30, 1997
compared with 70.8% for the nine months ended September 1996. The cost of
weather-related natural catastrophes was significantly less in the first three
quarters of 1997 compared with 1996; however, the underwriting results of the
commercial automobile line of business were unfavorable for the same comparison
periods. The unfavorable underwriting results for the commercial automobile line
of business during 1997 were due primarily to the occurrence of several large
liability claims in the period.

         The policy acquisition cost ratio was 38.6% for the three months ended
September 30, 1997 compared with 37.7% for the three months ended September 30,
1996 and was 37.9% for the nine months ended September 30, 1997, compared with
37.2% for the nine months ended September 30, 1996.

         Net income for the Company was approximately $337,000 for the three
months ended September 30, 1997 compared with net income of $697,000 for the
three months ended September 30, 1996. The Company had net income of
approximately $466,000 for the nine months ended September 30, 1997, compared
with net income of $596,000 for the nine months ended September 30, 1996.

FORWARD-LOOKING STATEMENTS

         Certain statements made herein and in other public filings and releases
by the Company contain "forward-looking" information (as defined in the Private
Securities Litigation Reform Act of 1995) that involve risk and uncertainty.
These forward-looking statements may include, but are not limited to, future
revenues, earnings, margins, costs, interest rates, market trends in the
insurance industry, inflation and various economic and business trends. Although
the Company believes that the expectations reflected in such forward looking
statements are based upon reasonable assumptions, the Company can give no
assurance that these expectations will be achieved. Actual results and trends in
the future may differ materially depending on a variety of factors including,
but not limited to, domestic economic activity and inflation, the Company?s
successful execution of internal operating plans and the factors that are
disclosed in conjunction with the forward looking statements included herein and
in other public filings and releases by the Company.




<PAGE>   12



                    AMERICAN INDEMNITY FINANCIAL CORPORATION
                                AND SUBSIDIARIES


<TABLE>
<CAPTION>

<S>  <C>                     <C>                                                                                       
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.

</TABLE>

                                   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    November 12, 1997                                 
        -----------------             ----------------------------------------
                                                   PHILLIP E. APGAR
                                            VICE PRESIDENT-TREASURER - CHIEF   
                                                   FINANCIAL OFFICER
                                      (PRINCIPAL FINANCIAL & ACCOUNTING OFFICER)


<PAGE>   13


                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
<S>                             <C>

          Exhibit 11 -          Computation  of Fully  Diluted  Net Income per Common and Common  Equivalent
                                Share.

          Exhibit 27 -          Financial Data Schedule.

</TABLE>