DCAP Reports First Quarter 2007 Results

HEWLETT, N.Y.--DCAP Group, Inc. , the largest chain of independent storefront insurance agencies in the Northeast, today reported financial results for the first quarter of 2007. Total revenues were $2,403,934, a decline from the prior year amount of $2,867,690. Net income was $88,794, a reduction of $37,986 as compared to the first quarter of 2006. Earnings per diluted share were $0.03 as compared to $0.04 in the first quarter of 2006.

Operating Highlights

	1Q 07	1Q 06
Commissions and Fees	$1,613,239	$1,893,177
Premium Finance Revenue	790,695	974,513
Total Revenues	2,403,934	2,867,690
Pretax Income	161,444	211,184
Net Income	88,794	126,780
Basic EPS	0.03	0.04
Diluted EPS	0.03	0.04
Basic Shares	2,941,491	2,866,746
Diluted Shares	3,283,525	3,238,861

Commentary

“We are continuing to feel the effects of heightened competition for the non-standard insured” said Barry Goldstein, DCAP Chairman and CEO. “Where the moderate income customer was not able to secure coverage by the major captive writers or through the direct to consumer carrier in years past, they now increasingly are able to do so. We are essentially a retailer, but without control over the price charged to the consumer, and can only offer policies for sale at the premiums approved by the New York and Pennsylvania Insurance Departments. Our primary carriers have not adjusted their rates to counter the reduced premiums available on a direct basis and we do not have the brand recognition of the captives (State Farm, Allstate, Nationwide, etc.).”

Mr. Goldstein continued, “The entire process is best evidenced by the continued year over year decline in the residual (assigned risk) markets. For example, during the first quarter of 2007, there was a decrease of more than 30% in applications submitted to the New York Auto Insurance Plan, as compared to the same period in 2006. Our premium finance segment, while not entirely wedded to the flow of business in the assigned risk markets, continues to experience a decline in loan volumes originated. Our results have suffered and in all likelihood this downward trend will continue for the remainder of 2007.”

“In early March, Commercial Mutual Insurance Company (“CMIC”) began the process to convert from an advanced premium cooperative (a “mutual” type company) to a stock company. While there can be no assurance that the conversion will be completed, if it is, DCAP, as the sole surplus note holder, will have the opportunity to convert its notes receivable into a controlling equity interest in CMIC,” Mr. Goldstein concluded.

About DCAP Group

DCAP Group, Inc. owns and operates the largest chain of independent storefront insurance agencies in the Northeast. Through DCAP Insurance, Barry Scott Insurance, Atlantic Insurance Agency and Accurate Agency, DCAP Group provides automobile insurance (and to a lesser extent, motorcycle and homeowners), enhanced by complimentary premium financing capabilities, to retail customers in New York and Pennsylvania. Other products include automobile club service for roadside emergencies and income tax preparation services. As of May 11, 2007, DCAP had 70 owned or franchised storefront locations.

Forward Looking Statements

Statements in this press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those included in forward-looking statements due to a variety of factors. More information about these factors can be found in Item 6 of DCAP’s latest Annual Report filed with Securities and Exchange Commission under Form 10-KSB. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.