EXHIBIT 99.1
American Physicians Capital, Inc. Reports Third Quarter 2008 Results
EAST LANSING, Mich., Oct. 30, 2008 (GLOBE NEWSWIRE) -- American Physicians Capital, Inc. (APCapital) (Nasdaq:ACAP) today announced net income of $11.2 million or $1.13 per diluted common share for the third quarter of 2008. This compares to net income of $13.3 million, or $1.21 per diluted share for the third quarter of 2007. Year-to-date APCapital has generated net income of $33.6 million or $3.37 per diluted share in 2008. This compares to year-to-date net income of $40.1 million or $3.54 per diluted share as of September 30, 2007. At September 30, 2008, APCapital's book value per share was $27.94 based on 9,594,712 shares outstanding.
"Management is using its best efforts to operate the company in a prudent and conservative fashion," said President and Chief Executive Officer R. Kevin Clinton. "Our operating results continue to be strong, our reserves are solid, and our investments are conservative."
"Less than 1% of our total assets are invested in the stock market and we incurred no investment impairments during the third quarter on our $846 million investment portfolio," stated Clinton.
Reaffirm Annual Guidance for 2008
"If the current trends in frequency, severity and pricing remain stable in our book of business through 2009, we continue to believe our Company will report operating earnings of at least $4.25 per diluted share in 2008, and will exceed that benchmark of $4.25 earnings per diluted share in 2009," said Clinton.
The guidance and related assumptions are subject to the risks and uncertainties outlined in the Company's Forward-Looking Statements section of this press release.
Consolidated Income Statement
(Dollars in thousands)
Three Months Ended Nine Months Ended
September 30, 2008 September 30, 2008
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
Direct Premiums Written $ 37,820 $ 45,213 $ 97,935 $ 109,362
========= ========= ========= =========
Net Premiums Written $ 36,257 $ 43,626 $ 93,931 $ 105,487
========= ========= ========= =========
Net Premiums Earned $ 30,497 $ 35,516 $ 93,564 $ 105,444
Incurred Loss and Loss
Adjustment Expenses:
Current Accident Year
Losses 24,085 26,191 73,373 78,632
Prior Year Losses (7,548) (7,958) (22,971) (25,121)
--------- --------- --------- ---------
Total 16,537 18,233 50,402 53,511
Underwriting Expenses 6,366 7,275 20,005 22,202
--------- --------- --------- ---------
Underwriting Income 7,594 10,008 23,157 29,731
Investment Income 8,886 10,737 28,078 33,066
Other Income (1) 180 113 (133) 435
Other Expenses (990) (1,361) (3,322) (4,030)
--------- --------- --------- ---------
Pre-tax Income 15,670 19,497 47,780 59,202
Federal Income Taxes 4,502 6,216 14,195 19,083
--------- --------- --------- ---------
Net Income $ 11,168 $ 13,281 $ 33,585 $ 40,119
========= ========= ========= =========
Loss Ratio:
Current Accident Year 79.0% 73.7% 78.4% 74.5%
Prior Year Development -24.8% -22.4% -24.5% -23.8%
Calendar Year 54.2% 51.3% 53.9% 50.7%
Underwriting Expense
Ratio 20.9% 20.5% 21.4% 21.1%
Combined Ratio 75.1% 71.8% 75.3% 71.8%
(1) Includes realized gains and losses
Direct premiums written were $37.8 million in the third quarter of 2008, down $7.4 million or 16.4% from the same period a year ago. Year-to-date, direct written premiums are down $11.4 million or 10.4%. The declines in direct premiums written were primarily the result of rate decreases in most of our markets. We insured 9,108 physicians at September 30, 2008, down slightly from 9,217 at year end 2007. Net premiums earned in the third quarter of 2008 were down $5.0 million or 14.1% from the third quarter of 2007 and were down $11.9 million or 11.3% year-to-date.
The 2008 third quarter loss ratio was 54.2% with $7.5 million of positive development from prior accident years. For the nine months ended September 30, 2008, the loss ratio was 53.9% with $23.0 million of positive prior year development. On an accident year basis, the loss ratio in the third quarter of 2008 was 79.0%, up from the 73.7% reported in the third quarter of 2007. This increase in accident year loss ratio reflects our recent premium rate decreases.
Claim statistics remain very strong. Our frequency of claims, while leveling off, continue to be at historically low volumes. There were 233 reported claims in the third quarter of 2008 which is consistent with recent favorable trends. Due to the low volume of new claims, we continue to reduce the number of outstanding claims. Our open claim count was 1,540 at September 30, 2008, which was down 11.5% since the start of the year. Our average paid claims have remained stable, but our average case reserves have increased 5.7% so far in 2008.
The underwriting expense ratio increased slightly in the third quarter of 2008 to 20.9% from 20.5% in the third quarter of 2007, with a similar increase in year-to-date ratios, due to the decline in net premiums earned. We expect our expense ratio to continue to increase as we begin to amortize capitalized costs related to our new information system. Other expenses in the third quarter of 2008 were down $371,000 and down $708,000 year-to-date due to lower interest expense on our long-term debt.
Investments
Investment income was $8.9 million in the third quarter of 2008, down from the $10.7 million for the same period in 2007. The overall investment yield decreased from 4.93% in the third quarter 2007 to 4.21% in the third quarter of 2008. Year-to-date our investment yield was 4.43% as compared to 5.05% through September 30, 2007. These decreases were primarily attributable to our increased position in tax-exempt securities, and the decline in short-term interest rates. Our year-to-date after tax yield was 3.32% through September 30, 2008 as compared to 3.59% a year ago.
Our investment portfolio has performed very well during the recent market turmoil with no impairment losses this quarter. Our portfolio does not contain any securities issued by domestic banks or brokers. All of our mortgage-backed holdings are in securities issued by Fannie Mae and Freddie Mac and now have the explicit guarantee of the U.S. Government. In addition, none of the underlying mortgages were made subsequent to March 2005, before the deterioration of underwriting standards. We have included a detailed listing of our investment holdings as of September 30, 2008 as a supplement to this press release.
Balance Sheet and Equity Information
APCapital's total assets were $1.043 billion at September 30, 2008, down $14.5 million from December 31, 2007. At September 30, 2008, the Company's total shareholders' equity was $268.1 million, up $4.6 million from December 31, 2007. Our 2008 year-to-date income has been partially offset by our share repurchase and dividend programs. The market value of our available-for-sale investment portfolio declined only $1.5 million, net of tax in the third quarter of 2008 and is down only $2.9 million, net of tax year-to-date.
Capital Management
In the third quarter of 2008, APCapital repurchased 129,600 shares at an average cost of $43.49 per share. Year-to-date we have repurchased 545,600 shares at an average cost of $43.12 per share. APCapital has the following outstanding share repurchase authorizations:
(In thousands)
------------------
Amount Remaining
As of
Date Author- Type of ------------------
Approved ization Repurchase Amount Sept. 30, Oct. 28,
By Board Year Plan Authorized 2008 2008
------------- -------- ---------- ---------- -------- --------
Oct. 27, 2006 2007 Rule 10b5-1 $32,000 $6,489 COMPLETED
Oct. 29, 2007 2008 Rule 10b5-1 $20,000 $20,000 $19,427
Feb. 7, 2008 NA Discretionary(1) $25,000 $21,761 $21,761
---------- -------- --------
$77,000 $48,250 $41,188
---------- -------- --------
NA = Not applicable
(1) All shares will be repurchased under management's discretion in
the open market or in privately negotiated transactions during the
Company's normal trading windows.
The share repurchase program remains an integral part of APCapital's capital management program. APCapital seeks to maintain an optimal, but flexible, level of capital during this softer market cycle. Subsequent to September 30, 2008, we have repurchased another 185,570 shares through October 28, 2008 under our Rule 10b5-1 Plan at an average cost of $38.06 per share.
In the third quarter of 2008, the Board of Directors declared a third quarter cash dividend of $0.10 per common share, which was paid to shareholders on September 30, 2008. Today, APCapital's Board of Directors declared a fourth quarter cash dividend of $0.10 per common share payable on December 31, 2008 to shareholders of record on December 12, 2008.
In the third quarter of 2008, we also paid down $5.0 million on our debt. Future prepayments on our debt will be considered and will be subject to available cash resources, capital needs and other relevant factors.
Conference Call
APCapital's website, http://www.apcapital.com, will host a live Webcast of its conference call in a listen-only format to discuss 2008 third quarter results on October 31, 2008 at 10:00 a.m. Eastern time. An archived edition of the Webcast can be accessed by going to APCapital's website and selecting "For Investors," then "Webcasts." For individuals unable to access the Webcast, a telephone replay will be available by dialing 888-203-1112 or 719-457-0820 and entering access code 1298435. The replay will be available through 11:59 p.m. Eastern time on November 5, 2008.
Corporate Description
American Physicians Capital, Inc. is a regional provider of medical professional liability insurance focused primarily in the Midwest and New Mexico markets through American Physicians Assurance Corporation and its other subsidiaries. Further information about the companies is available on the Internet at http://www.apcapital.com.
The American Physicians Capital, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4506
Forward-Looking Statements
Certain statements made by American Physicians Capital, Inc. in this release may constitute forward-looking statements within the meaning of the federal securities laws. When we discuss future operating results or use words such as "will," "should," "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements. These forward-looking statements represent our outlook only as of the date of this release. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive risks and uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different. Factors that might cause such a difference include, without limitation, the following:
* increased competition could adversely affect our ability to sell our products at premium rates we deem adequate, which may result in a decrease in premium volume, a decrease in our profitability, or both; * our reserves for unpaid losses and loss adjustment expenses are based on estimates that may prove to be inadequate to cover our losses; * an interruption or change in current marketing and agency relationships could reduce the amount of premium we are able to write; * if we are unable to obtain or collect on ceded reinsurance, our results of operations and financial condition may be adversely affected; * our geographic concentration in certain Midwestern states and New Mexico ties our performance to the business, economic, regulatory and legislative conditions in those states; * a downgrade in the A.M. Best Company financial strength rating of our primary insurance subsidiary could reduce the amount of business we are able to write; * changes in interest rates could adversely impact our results of operation, cash flows and financial condition; * the unpredictability of court decisions could have a material adverse financial impact on our operations; * our business could be adversely affected by the loss of one or more of our key employees; * the insurance industry is subject to regulatory oversight that may impact the manner in which we operate our business, our ability to obtain future premium rate increases, the type and amount of our investments, the levels of capital and surplus deemed adequate to protect policyholder interests, or the ability of our insurance subsidiaries to pay dividends to the holding company; * our status as an insurance holding company with no direct operations could adversely affect our ability to meet our debt obligations and fund future cash dividends and share repurchases; * legislative or judicial changes in the tort system may have adverse or unintended consequences that could materially and adversely affect our results of operations and financial condition; * applicable law and certain provisions in our articles and bylaws may prevent and discourage unsolicited attempts to acquire our Company that may be in the best interest of our shareholders or that might result in a substantial profit to our shareholders; * any other factors listed or discussed in the reports filed by APCapital with the Securities and Exchange Commission under the Securities Exchange Act of 1934.
Other factors not currently anticipated by management may also materially and adversely affect our financial condition, liquidity or results of operations. APCapital does not undertake, and expressly disclaims any obligation, to update or alter its statements whether as a result of new information, future events or otherwise, except as required by applicable law.
Definition of Non-GAAP Financial Measures
APCapital uses operating income, a non-GAAP financial measure, to evaluate APCapital's underwriting performance. Operating income differs from net income by excluding the after-tax effect of realized capital gains and (losses).
Although the investment of premiums to generate investment income and capital gains or (losses) is an integral part of an insurance company's operations, APCapital's decisions to realize capital gains or (losses) are independent of the insurance underwriting process. In addition, under applicable GAAP accounting requirements, losses may be recognized for accounting purposes as the result of other than temporary declines in the value of investment securities, without actual realization. APCapital believes that the level of realized gains and (losses) for any particular period is not indicative of the performance of our ongoing underlying insurance operations in a particular period. As a result, APCapital believes that providing operating income (loss) information makes it easier for users of APCapital's financial information to evaluate the success of APCapital's underlying insurance operations.
In addition to APCapital's reported loss ratios, management also uses accident year loss ratios, a non-GAAP financial measure, to evaluate APCapital's current underwriting performance. The accident year loss ratio excludes the effect of prior years' loss reserve development. APCapital believes that this ratio is useful to investors as it focuses on the relationships between current premiums earned and losses incurred related to the current year. Although considerable variability is inherent in the estimates of losses incurred related to the current year, APCapital believes that the current estimates are reasonable.
Summary Financial Information
American Physicians Capital, Inc.
Balance Sheet Data Sept. 30, Dec. 31,
2008 2007
---------- ----------
(In thousands, except
per share data)
Assets:
Available-for-sale - bonds $ 225,234 $ 262,301
Held-to-maturity - bonds 487,471 497,662
Other invested assets 15,124 11,487
Cash and cash equivalents 118,569 87,498
---------- ----------
Cash and investments 846,398 858,948
Premiums receivable 37,214 35,542
Reinsurance recoverable 101,108 106,961
Deferred federal income taxes 22,486 22,439
Other assets 35,748 33,572
---------- ----------
Total assets $1,042,954 $1,057,462
========== ==========
Liabilities and Shareholders'
Equity:
Unpaid losses and loss adjustment
expenses $ 652,736 $ 664,117
Unearned premiums 60,833 60,080
Long-term debt 25,928 30,928
Other liabilities 35,333 38,780
---------- ----------
Total liabilities 774,830 793,905
Common stock -- --
Additional paid-in-capital -- --
Retained earnings 264,982 257,502
Accumulated other comprehensive income:
Net unrealized gains on investments,
net of deferred federal income taxes 3,142 6,055
---------- ----------
Shareholders' equity 268,124 263,557
---------- ----------
Total liabilities and shareholders'
equity $1,042,954 $1,057,462
========== ==========
Shares outstanding 9,595 10,128
Book value per share $ 27.94 $ 26.02
Summary Financial Information
American Physicians Capital, Inc.
Income Statement
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2008 2007 2008 2007
--------- --------- --------- ---------
(In thousands, except per share data)
Direct premiums written $37,820 $45,213 $97,935 $109,362
========= ========= ========= =========
Net premiums written $36,257 $43,626 $93,931 $105,487
========= ========= ========= =========
Net premiums earned $30,497 $35,516 $93,564 $105,444
Investment income 8,886 10,737 28,078 33,066
Net realized gains (losses) 22 (73) (686) (139)
Other income 158 186 553 574
--------- --------- --------- ---------
Total revenues 39,563 46,366 121,509 138,945
Losses and loss adjustment
expenses 16,537 18,233 50,402 53,511
Underwriting expenses 6,366 7,275 20,005 22,202
Other expenses 990 1,361 3,322 4,030
--------- --------- --------- ---------
Total expenses 23,893 26,869 73,729 79,743
--------- --------- --------- ---------
Income before income taxes 15,670 19,497 47,780 59,202
Federal income tax expense 4,502 6,216 14,195 19,083
--------- --------- --------- ---------
Net income $11,168 $13,281 $33,585 $40,119
========= ========= ========= =========
Adjustments to reconcile
net income to operating
income:
Net income $11,168 $13,281 $33,585 $40,119
Addback:
Net realized (gains)
losses, net of tax (14) 47 446 90
--------- --------- --------- ---------
Net operating income $11,154 $13,328 $34,031 $40,209
========= ========= ========= =========
Ratios:
Loss ratio (1) 54.2% 51.3% 53.9% 50.7%
Underwriting ratio (2) 20.9% 20.5% 21.4% 21.1%
Combined ratio (3) 75.1% 71.8% 75.3% 71.8%
Earnings per share data:
Net income
Basic $1.15 $1.23 $3.44 $3.61
Diluted $1.13 $1.21 $3.37 $3.54
Net operating income
Basic $1.15 $1.23 $3.48 $3.61
Diluted $1.13 $1.21 $3.41 $3.55
Basic weighted average
shares outstanding 9,670 10,801 9,771 11,124
Diluted weighted average
shares outstanding 9,864 11,015 9,967 11,339
(1) The loss ratio is calculated by dividing incurred loss and loss
adjustment expenses by net premiums earned.
(2) The underwriting ratio is calculated by dividing underwriting
expenses by net premiums earned.
(3) The combined ratio is the sum of the loss and underwriting
ratios.
Summary Financial Information
American Physicians Capital, Inc.
Selected Cash Flow Information
For the Nine Months Ended
September 30,
----------------------
2008 2007
--------- ---------
(In thousands)
Net cash from operating activities $ 25,736 $ 39,433
========= =========
Net cash from (for) investing activities $ 38,815 $ (28,021)
========= =========
Net cash for financing activities $ (33,480) $ (38,114)
========= =========
Net increase in cash and cash equivalents $ 31,071 $ (26,702)
========= =========
American Physicians Capital, Inc.
Supplemental Statistics
Medical Professional Liability
Reported Net Premium
Three Months Ended Claim Count Earned
------------------ -------------------- --------------------
(In thousands)
September 30, 2008 233 $ 30,494
June 30, 2008 261 31,420
March 31, 2008 232 31,657
December 31, 2007 245 33,471
September 30, 2007 191 35,517
June 30, 2007 269 34,896
March 31, 2007 247 35,034
December 31, 2006 267 37,051
September 30, 2006 297 37,774
June 30, 2006 296 37,517
March 31, 2006 308 37,448
Average Net
Average Net Paid Claim
Open Case Reserve (Trailing Four
Three Months Ended Claim Count Per Open Claim Quarter Average)
------------------- ----------- -------------- ----------------
September 30, 2008 1,540 $ 153,100 $ 69,200
June 30, 2008 1,639 150,000 65,700
March 31, 2008 1,672 148,600 63,100
December 31, 2007 1,741 144,800 67,500
September 30, 2007 1,913 144,200 70,400
June 30, 2007 2,124 136,200 69,600
March 31, 2007 2,200 138,800 56,600
December 31, 2006 2,256 137,900 59,100
September 30, 2006 2,347 138,800 57,600
June 30, 2006 2,558 136,300 63,000
March 31, 2006 2,976 120,400 78,800
December 31, 2005 2,991 122,400 75,900
September 30, 2005 3,109 119,100 67,900
June 30, 2005 3,211 116,300 68,200
March 31, 2005 3,344 114,900 65,200
Retention Ratio
--------------------------------------------------------
Nine Months Ended Year Ended Nine Months Ended
September 30, 2008 December 31, 2007 September 30, 2007
------------------ ------------------ ------------------
Michigan 88% 85% 86%
Illinois 89% 82% 81%
Ohio 86% 88% 88%
New Mexico 87% 88% 89%
Kentucky 91% 86% 85%
Total
(all
states) 87% 85% 86%
AMERICAN PHYSICIANS CAPITAL, INC AND SUBSIDIARIES
INVESTMENT HOLDING SUPPLEMENT
AS OF SEPTEMBER 30, 2008
Fair Amortized
Value Cost Par
CUSIP Description (1) (2) Value
----------- --------------------------------- ------- ------- -------
AVAILABLE-FOR-SALE DEBT SECURITIES (in thousands)
States And Political Subdivisions
709141-Q5-7 PENNSYLVANIA ST $ 9,563 $ 9,433 $ 9,000
196454-FL-1 CO DEPT TRANSN REV 6,979 6,955 6,575
646135-2Y-8 NEW JERSEY ST TRANSN TR FD AUTH 6,888 6,869 6,500
95667Q-AN-6 WEST VA ST SCH BLDG AUTH REV 6,800 6,851 6,500
718814-XK-7 PHOENIX ARIZONA 6,748 6,645 6,300
646039-JA-6 NEW JERSEY ST 6,612 6,551 6,225
741701-VD-5 PRINCE GEORGES CNTY MD 6,421 6,324 6,000
167723-BD-6 CHICAGO ILL TRAN AUTH CAP GRNT RC 6,370 6,392 6,000
928172-HL-2 VIRGINIA ST PUB BLDG AUTH PUB FAC 6,366 6,264 6,000
977056-8D-5 WISCONSIN ST 6,339 6,248 6,000
709141-Z7-3 PENNSYLVANIA ST 6,329 6,219 5,965
373383-N7-9 GEORGIA ST 5,737 5,776 5,485
186343-UR-8 CLEVELAND OHIO 5,378 5,399 5,050
575827-3X-6 MASSACHUSETTS ST CONS LN-SER C 5 5,355 5,264 5,000
391554-AP-7 GREATER ALBANY SCH DIST NO 8J OR 5,335 5,268 5,000
592013-7M-2 METROPOLITAN GOVT NASHVILLE & DAV 5,332 5,251 5,000
419780-S5-1 HAWAII ST REF-SER DG 5,303 5,213 5,000
594700-CA-2 MICHIGAN ST TRUNK LINE FD 5,290 5,222 5,000
92817F-XF-8 VIRGINIA ST PUB SCH AUTH 5,279 5,218 5,000
181054-7U-5 CLARK CNTY NEV SCH DIST 5,278 5,209 5,000
452151-PZ-0 ILLINOIS ST 5,266 5,197 5,000
79575D-LQ-1 SALT RIV PROJ ARIZ AGRIC IMPT 5,243 5,294 5,000
527839-BY-9 LEWIS CNTY WASH PUB UTIL 5,227 5,226 5,000
972176-6H-9 WILSON CNTY TENN 3,153 3,288 3,075
972176-6J-5 WILSON CNTY TENN 3,087 3,194 3,005
665093-EE-6 NORTHERN COOK CNTY ILL SOLID WASTE 1,252 1,269 1,200
665093-EF-3 NORTHERN COOK CNTY ILL SOLID WASTE 1,251 1,269 1,200
250092-F4-0 DES MOINES IOWA 1,060 1,046 1,000
969073-HN-8 WILL CNTY ILL CMNTY HIGH SCH DIST 1,054 1,080 1,000
615401-HU-3 MOON AREA SCH DIST PA 537 529 500
708796-AP-2 PENNSYLVANIA HSG FIN AGY SINGLE 523 500 500
------- ------- -------
Subtotal States And Political Subdivisions 151,355 150,463 143,080
Corporate Securities
904764-AG-2 UNILEVER CAP CORP 6,935 6,678 6,500
00508Y-AB-8 ACUITY BRANDS INC 6,883 6,494 6,500
210805-DP-9 CONTINENTAL AIRLS PASS THRU 5,795 6,500 6,500
459200-AL-5 INTERNATIONAL BUSINESS MACHS CORP 6,573 6,425 6,000
002824-AS-9 ABBOTT LABS 6,201 5,992 6,000
883203-BG-5 TEXTRON INC 6,009 6,017 6,000
79286L-DN-9 ST PAUL COS INC 6,005 6,000 6,000
084664-AD-3 BERKSHIRE HATHAWAY FIN CORP SR 5,846 5,727 6,000
26353L-JB-8 DU PONT E I DE NEMOURS & CO 5,723 5,618 6,000
456866-AK-8 INGERSOLL RAND CO 5,127 4,770 5,000
75952U-AE-3 RELIASTAR FINL CORP 5,011 4,993 5,000
24713@-AA-4 DELOITTE & TOUCHE USA LLP 4,059 4,000 4,000
45072G-AA-0 I-PRETSL II COMBINATION LTD 2,276 2,276 2,276
075887-AS-8 BECTON DICKINSON & CO 487 476 500
573284-AE-6 MARTIN MARIETTA 474 475 475
37033L-FE-1 GENERAL MILLS INC 375 373 375
------- ------- -------
Subtotal Corporate Securities 73,779 72,814 73,126
Mortgage-Backed Securities
393505-XC-1 GREEN TREE FINANCIAL CORP 100 103 104
------- ------- -------
Subtotal Mortgage-Backed Securities 100 103 104
-------- -------- --------
TOTAL AVAILABLE-FOR-SALE DEBT SECURITIES $225,234 $223,380 $216,310
======== ======== ========
AMERICAN PHYSICIANS CAPITAL, INC AND SUBSIDIARIES
INVESTMENT HOLDING SUPPLEMENT
AS OF SEPTEMBER 30, 2008
Fair Amortized Par
CUSIP Description Value (1) Cost (2) Value
----------- -------------------------- --------- --------- ---------
HELD-TO-MATURITY DEBT SECURITIES
U.S. Government and Agency Obligations
3128X3-Y4-9 FHLMC NOTE 15,004 15,011 15,000
3133XF-KV-7 FHLB NOTE 15,277 15,000 15,000
31331S-JW-4 FFCB NOTE 14,719 14,949 15,000
3136F6-TH-2 FNMA NOTE 9,925 9,919 10,000
3133X9-ZA-1 FHLB NOTE 4,962 5,000 5,000
3133X7-HV-9 FHLB NOTE 4,601 4,591 4,550
--------- --------- ---------
Subtotal U.S. Government and Agency
Obligations 64,488 64,470 64,550
AMERICAN PHYSICIANS CAPITAL, INC AND SUBSIDIARIES
INVESTMENT HOLDING SUPPLEMENT
AS OF SEPTEMBER 30, 2008
Fair Amortized
Value Cost Par
CUSIP Description (1) (2) Value
----------- --------------------------------- ------- ------- -------
States And Political Subdivisions
64711R-BD-7 NM FIN AUTH ST TRANSN REV SR 6,959 7,290 6,805
677519-SC-5 OHIO ST 6,878 6,946 6,615
29270C-HK-4 ENERGY N W WASH ELEC REV 6,950 6,901 6,500
341150-QU-7 FLORIDA ST 6,832 6,878 6,500
576002-AS-8 MASSACHUSETTS ST SPL OBLIG 6,789 6,867 6,500
645916-WU-7 NEW JERSEY ECONOMIC DEV AUTH REV 6,777 6,832 6,500
93974A-NH-3 WA ST REF-VAR PURP-SER R-03-A 6,694 6,736 6,500
736742-MA-2 PORTLAND ORE SWR SYS REV 6,259 6,575 6,000
167484-3S-1 CHICAGO ILL 6,205 6,436 6,000
455393-AM-0 INDIANAPOLIS IND THERMAL ENERGY 6,217 6,355 6,000
928109-JY-4 VIRGINIA ST 6,133 6,332 6,000
576000-AZ-6 MASSACHUSETTS ST SCH BLDG AUTH 6,122 6,331 6,000
040654-KT-1 ARIZONA ST TRANSN BRD HWY REV 6,139 6,294 6,000
647310-G3-9 NEW MEXICO ST SEVERANCE TAX 5,603 6,036 6,000
20772F-JN-1 CONNECTICUT ST 6,216 6,113 5,730
837147-XX-0 SC ST PUB SVC AUTH REV REF-SER D 5,665 5,736 5,430
341426-PT-5 FLORIDA ST BRD OF ED PUB ED-SER J 5,544 5,598 5,290
472682-LZ-4 JEFFSN CNTY ALA SWR REV CAP IMPT 5,511 5,459 5,230
591745-F5-8 METROPOLITAN ATLANTA RAPID TRAN 5,157 5,390 5,040
478700-B2-2 JOHNSON CNTY KANS UNI SCH DIST 5,146 5,371 5,000
181324-MB-7 CLARK CNTY WASH SCH DIST NO 119 5,064 5,301 5,000
262608-NQ-1 DU PAGE & WILL CNTYS ILL CMNTY SCH 5,357 5,287 5,000
576004-ED-3 MASSACHUSETTS ST SPL OBLIG 5,281 5,272 5,000
677519-3S-7 OHIO ST 5,230 5,257 5,000
442436-2F-7 HSTN TEX WTR & SWR SYS 5,311 5,237 5,000
604128-3H-9 MINNESOTA ST 5,222 5,219 5,000
46613Q-AM-6 JEA FLA ST JOHNS RIV PWR PK SYS 5,184 5,216 5,000
199820-QY-0 COMAL TEX INDPT SCH DIST 5,095 5,215 5,000
40785E-MW-3 HAMILTON SOUTHEASTERN IND CONS SCH 4,850 5,083 4,725
385640-FG-7 GRAND IS NEB ELEC REV SYS 4,605 4,632 4,485
235416-ZU-1 DALLAS TEX WTRWKS & SWR SYS REV 4,694 4,654 4,455
509228-EQ-1 LAKE CNTY ILL ADLAI E STEVENSON HS 3,872 3,965 3,750
491552-PM-1 KENTUCKY ST TPK AUTH ECONOMIC DEV 3,570 3,661 3,500
040663-2J-4 ARIZONA ST UNIV REVS 3,332 3,456 3,220
927793-NT-2 RPAR HOLDINGS REF-US RT 58 CORR 3,087 3,165 3,000
927793-NU-9 VIRGINIA COMWLTH TRANSN BRD TRANS 3,066 3,157 3,000
509228-ER-9 LAKE CNTY ILL ADLAI E STEVENSON HS 2,864 2,940 2,795
040663-2K-1 ARIZONA ST UNIV REVS 2,743 2,822 2,645
259291-DD-1 DOUGLAS CNTY NEB SCH DIST NO 001 2,568 2,628 2,500
235416-A7-9 DALLAS TEX WTRWKS & SWR SYS REV 2,093 2,116 2,045
97705L-FZ-5 WISCONSIN ST 2,055 2,125 2,000
438670-FF-3 HONOLULU HAWAII CITY & CNTY 1,896 1,964 1,855
678519-FD-6 OKLAHOMA CITY OKLA 1,104 1,146 1,075
345874-PH-8 FOREST LAKE MINN INDPT SCH DIST 1,016 1,067 1,000
463813-GW-9 IRVING TEX INDPT SCH DIST 1,025 1,063 1,000
659048-CN-0 NORTH DAVIESS IND SCH BLDG CORP 1,023 1,050 1,000
718814-UE-4 PHOENIX ARIZ 1,008 1,041 1,000
93974A-NL-4 WA ST REF-VAR PURP-SER R-03-A 1,010 1,029 1,000
452001-WT-3 ILL EDL AUTH REVS 793 779 750
575566-S6-2 MASS BAY TRANS ATH 760 758 750
641459-VK-5 NEVADA ST G/O RFDG 664 661 650
181211-DJ-9 CLARK CNTY WASH SCH DIST NO 101 587 601 570
263417-GJ-0 DU PAGE CNTY ILL CMNTY HS 541 540 520
341535-PW-6 FLORIDA ST BRD ED PUB ED 528 530 500
517840-WW-0 LAS VEGAS VALLEY NEV WTR DIST 525 528 500
799098-DD-7 SAN MIGUEL CNTY COLO SCH DIST 511 528 500
442352-AH-3 HOUSTON TEX AREA WTR CORP 537 528 500
040654-JV-8 AZ ST TRANSN BRD HWY REV SER B 5 525 526 500
51166F-AD-1 LAKELAND FLA ENERGY SYS REV 521 525 500
54811B-EP-2 LOWER COLO RIV AUTH TEX TRANSMISS 501 514 500
159195-MY-9 CHANNELVIEW TEX INDPT SCH DIST 486 487 475
655181-BJ-3 NOBLESVILLE-SOUTHEASTN PUB LIBR 480 484 460
------- ------- -------
Subtotal States And Political Subdivisions 224,980 229,233 217,365
AMERICAN PHYSICIANS CAPITAL, INC AND SUBSIDIARIES
INVESTMENT HOLDING SUPPLEMENT
AS OF SEPTEMBER 30, 2008
Fair Amortized
Value Cost Par
CUSIP Description (1) (2) Value
----------- ------------------------------ -------- -------- --------
Corporate Securities
74740F-GF-7 QUAKER OATS CO 6,740 6,418 6,000
134429-AM-1 CAMPBELL SOUP CO 6,387 6,296 6,000
41011W-AH-3 JOHN HANCOCK GLOBAL FDG 6,377 6,261 6,000
855707-AB-1 ST AUTO FINL CORP SR 5,811 6,052 6,000
05566H-BF-3 BNP PARIBAS US 4,756 4,967 5,000
035229-CD-3 ANHEUSER BUSCH 4,323 4,390 4,310
438516-AK-2 HONEYWELL INTL INC 3,155 3,124 3,000
615337-AA-0 THE MONY GROUP 2,621 2,635 2,510
075887-AR-0 BECTON DICKINSON CO 1,009 1,027 1,000
693506-AY-3 PPG INDUSTRIES INC 841 848 830
751277-AM-6 RALSTON PURINA CO 525 522 500
36962E-4Z-9 GEN ELEC CAP CORP 403 410 400
-------- -------- --------
Subtotal Corporate Securities 42,948 42,950 41,550
Mortgage-Backed Securities
31394K-AD-6 FHLMC MULTICLASS SER 2687 15,314 15,149 15,000
31394N-4U-9 FHLMC MULTICLASS SER 2713 15,175 15,144 15,000
31394P-3P-6 FHLMC MULTICLASS SER 2740 15,172 15,138 15,000
31395L-VJ-7 FHLMC MULTICLASS PREASSIGN 00465 13,785 13,729 13,586
31394M-A2-6 FHLMC MULTICLASS SER 2708 13,324 13,123 13,000
31395K-PG-2 FHLMC MULTICLASS SER 2903 9,709 10,363 10,449
31394K-G6-5 FHLMC MULTICLASS SER 2693 10,187 10,091 10,000
31395K-CV-3 FHLMC MULTICLASS SER 2905 9,953 9,994 10,000
31394W-HE-1 FHLMC MULTICLASS SER 2784 5,413 5,608 5,667
31394G-H7-1 FHLMC REMIC SERIES 2649 4,827 5,278 5,479
31394W-HQ-4 FHLMC MULTICLASS SER 2784 4,730 4,696 4,688
31393D-DS-7 FNMA REMIC TRUST 2003-58 4,416 4,485 4,651
31394G-N8-2 FHLMC REMIC SERIES 2659 4,088 4,318 4,385
31393Y-XE-0 FNMA REMIC SER 2004-45 4,059 4,283 4,306
31393T-CP-9 FNMA REMIC TRUST 2003-92 4,088 4,217 4,266
31394Y-LZ-5 FHLMC MULTICLASS SER 3,790 4,007 4,034
31394Y-BU-7 FHLMC MULTICLASS PREASSIGN 3,227 3,365 3,379
31395A-LR-4 FHLMC MULTICLASS SER 2807 2,947 3,046 2,971
31394Y-6G-4 FHLMC MULTICLASS PREASSIGN 1,963 2,040 2,054
31394Y-NA-8 FHLMC MULTICLASS PREASSIGN 1,367 1,373 1,382
31393Y-US-2 FNMA REMIC TR 2004-42 1,187 1,231 1,231
31362J-E6-8 FNMA ARM #062257 71 72 71
36224V-H5-7 GNMA POOL #339652 36 36 34
31375A-G3-7 FNMA P/T 328818 18 18 17
36225A-ET-3 GNMA PLATINUM P/T 780146 12 12 11
31368H-US-0 FNMA ARM MEGA POOL #190593 2 2 2
Subtotal Mortgage-Backed Securities 148,860 150,818 150,663
-------- -------- --------
TOTAL HELD-TO-MATURITY DEBT SECURITIES $481,276 $487,471 $474,128
======== ======== ========
(2) Held-to-maturity debt securities are carried in the balance
sheet at amortized cost.
CASH & CASH EQUIVALENTS
31846V-41-9 FIRST AMER TREAS OBLIG 825
665278-70-1 NORTHERN INSTL FDS GOVT SELECT 77,803
--------
Subtotal Money Market Funds 78,628
36959R-LH-6 GENERAL ELEC CAP SVCS 10,948
74433G-LH-7 PRUDENTIAL FUNDING 10,451
89233G-LH-7 TOYOTA MOTOR CREDIT CORP 10,451
42823J-L3-7 HEWLETT PACKARD CO 9,962
--------
Subtotal Commercial Paper 41,812
CERTIFICATE OF DEPOSIT 100
ZERO BALANCE CASH SWEEP ACCOUNTS (1,971)
--------
Subtotal Cash and CDs (1,871)
--------
TOTAL CASH & CASH EQUIVALENTS $118,569
========
CONTACT: American Physicians Capital, Inc.
Investor Relations
Ann Storberg
(517) 324-6629