SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
Date of Report (Date of earliest event reported:)
October 15, 2004 (October 12, 2004)
American Physicians Service Group, Inc.
(Exact name of registrant as specified in its charter)
Texas 0-11453 75-1458323
(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
1301 Capitol of Texas Highway
Suite C-300
Austin, Texas 78746
(Address of principal executive offices) (Zip Code)
(512) 328-0888
(Registrant's telephone number,
including area code)
Section 2 - Financial Information
Item 2.06 Material Impairments
On October 6, 2004 the Board of Directors of American Physicians Service
Group, Inc. met to review the valuation of our investment in the common
stock of Financial Industries Corporation ("FIC") in conjunction with the
preparation of our third quarter financial statements. On October 12, 2004
we determined that the decline in the market price of FIC's common stock
should be considered "other than temporary" as defined in Statement of
Financial Accounting Standards (SFAS) No. 115, Accounting for Certain
Investments in Debt and Equity Securities. Consequently, we will record a
pretax charge to earnings of approximately $2,400,000 in our interim
financial statements for the quarter ended September 30, 2004. The charge
will reduce our cost basis in FIC from $5,647,000, or $14.67 per share, to
$3,273,000, or $8.50 per share, which is equal to the quoted market price
of the FIC shares on September 30, 2004. This is a non-cash charge.
Approximately $2,100,000 ($1,400,000, net of taxes) of this amount was
reflected in our balance sheet at June 30, 2004 in Accumulated Other
Comprehensive Loss.
As disclosed in our Form 10-Q for the three and six months ended June 30,
2004, we believed that the decline in the market price of FIC had been
brought about by its failure to file its 2003 10-K and its subsequent
de-listing from the NASDAQ Stock Market. We had expected FIC to bring its
filings current and pursue restoring its exchange listing by September 30,
2004. These events have not yet occurred. While we currently continue to
have the ability and the intent to hold the stock indefinitely, the Board
concluded that the additional uncertainty created by the late filings and
lack of current financial information dictated that the decline should be
viewed as other than temporary.
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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 hereunto duly authorized.
American Physicians Service Group, Inc.
Date: October 15, 2004 By: /s/ W.H. Hayes
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Name: W.H. Hayes
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Title: Sr VP - Finance
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