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American Physicians Service Group, Inc.
Reports Excellent Fourth Quarter and Annual Results for 2008
15% Return on Equity
AUSTIN, TEXAS, March 2, 2009 American Physicians Service Group, Inc. (APS) (NASDAQ:AMPH) today announced results for the quarter and year ended December 31, 2008. For the three months ended December 31, 2008, revenues were $17,408,000 compared to $22,785,000 for the same period last year. Net earnings were $2,454,000 or $.34 per diluted share, compared to $6,005,000 or $.82 per diluted share, in the same period last year. For the year ended December 31, 2008, revenues were $74,749,000 compared to $84,403,000 in the prior year. Net earnings were $19,163,000 or $2.64 per diluted share, compared to $23,273,000 or $4.09 per diluted share in 2007. Results for the year ended December 31, 2007 included an extraordinary gain of $2,264,000 or $.40 per diluted share, resulting from the acquisition of American Physicians Insurance Company (API) on April 1, 2007 and earnings per share in 2007 did not reflect the full impact of an additional 4,300,000 shares issued during the year in connection with the acquisition and a stock offering.
Ken Shifrin, Chairman of the Board, stated, 2008 represented the first full year of operations as a fully integrated insurance company following our acquisition of API in 2007 and it was an eventful year. We were not immune to the severe turmoil in world economics in 2008, yet produced our second best earnings performance ever, grew book value per share by 13%, produced a 15% return on equity and grew our policy holder count by over 8%. Our share price increased over 7% during the year, a truly extraordinary performance for any public company in 2008. So while we did not entirely escape the economic crisis, we were still able to deliver excellent results in a very difficult market.
Tim LaFrey, President, added, Our insurance base continued to grow in 2008. New premium business increased 62% over 2007, including meaningful contributions from expansion states Arkansas and Oklahoma, and our driven commitment to customer service yielded a 92% retention rate. The combined effect was an 8% increase in policyholder count during 2008. Total premiums do not fully reflect this increase, as very favorable claims trends in our primary market resulted in appropriate rate competition, with an average rate decrease of 6% in 2008, down significantly from the 14% decrease in 2007. Despite the favorable claims trend, we continue to underwrite with the systematic, conservative approach we have always followed. Consequently, though our number of pending claims declined 21% in 2008, our net reserve per open claim increased 22% and we remain very conservatively reserved at the upper end of the actuarial range in all periods.
Mr. LaFrey continued, As Mr. Shifrin said, we were not immune from the impact of the decline in global financial markets and our overall revenue decline for the year was primarily the result of lower financial services revenues in 2008, following that segments record year in 2007. Revenues for the financial services segment declined from $21.1 million in 2007 to $6.2 million in 2008. We reduced our expenses in 2008, narrowing our loss each quarter as the year progressed, but will not be satisfied until we return this segment to profitability.
The following information was filed by American Physicians Service Group Inc on Monday, March 2, 2009 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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