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American Physicians Service Group, Inc.
Reports Record Annual Results: 275% increase in EPS; 64% increase in Book Value per Share
AUSTIN, TEXAS, March 10, 2008 American Physicians Service Group, Inc. (APS) (NASDAQ: AMPH) today announced results for the quarter and year ended December 31, 2007. For the three months ended December 31, 2007, revenues were $22,785,000 compared to $10,822,000 for the same period last year. Net earnings were $6,005,000 or $.82 per diluted share, compared to $1,625,000 or $.56 per diluted share, in the same period last year. For the year ended December 31, 2007, revenues were $84,403,000 compared to $33,564,000 in the prior year. Net earnings were $23,273,000 or $4.09 per diluted share, compared to $3,194,000 or $1.09 per diluted share in 2006.
Ken Shifrin, APS Chairman of the Board, stated, As the numbers dramatically indicate, we had a successful conclusion to an historic year. During 2007 we acquired American Physicians Insurance Company (API), effectively transforming ourselves from an insurance management company to a fully integrated insurance company. Soon after the acquisition, we raised $35 million in a secondary stock offering, which allowed us to strengthen the surplus of API and gave us additional capital to pursue our expansion plans. With the new surplus, API was able to seek and receive its first ever A.M. Best rating, an Excellent or A-, which we believe will be a real positive as we pursue growth in our pursuit of both new and existing markets.
Tim LaFrey, President of APS, added, We continue to experience a favorable claims environment as a result of tort reform and strong underwriting discipline. However, our loss reserves remain conservatively positioned at the upper end of the actuarial range. We also continue to conservatively manage our investment portfolio. As we have said previously, we hold no sub-prime mortgage securities, but the depth of the housing crisis has also affected investment grade Alt-A mortgage-backed securities and we recorded a $1.4 million write down on such securities in the fourth quarter. Since the beginning of the fourth quarter, and continuing through today, we have reduced our holdings of Alt-A securities by $3.2 million, realizing a modest gain and mitigating future risks from the securities. I would be remiss not to mention the successes of our insurance staff, whose quality service can be credited for the 91% retention rate we enjoyed in 2007, and the outstanding performance of our financial services segment, which delivered a return of over 150% on their average invested capital in 2007.
Mr. Shifrin concluded, The successful results Tim mentioned enabled us to continue to improve our already strong balance sheet. At year end, shareholders equity had grown to almost $124 million from less than $30 million a year earlier. Book value per share, likewise, increased from $10.49 to $17.19 over that time period. Our cash and investments increased from approximately $27 million to approximately $223 million and our only debt is approximately $8.5 million of redeemable preferred stock, which we issued in the acquisition of API. As always, our goal is to transfer this success to increased value for our shareholders and we look forward to continuing to do so in 2008.
The following information was filed by American Physicians Service Group Inc on Monday, March 10, 2008 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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