QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Large accelerated filer ☐ | Non-accelerated filer ☐ |
Smaller reporting company | ||||
Emerging growth company |
Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered | ||
Class A |
||||
Class B |
Page | ||||
PART I |
||||
Item 1. |
1 | |||
Item 2. |
22 | |||
Item 3. |
33 | |||
Item 4. |
33 | |||
PART II |
||||
Item 1. |
34 | |||
Item 1A. |
34 | |||
Item 2. |
35 | |||
Item 3. |
35 | |||
Item 4. |
35 | |||
Item 5. |
35 | |||
Item 6. |
36 | |||
37 |
June 30, 2021 |
December 31, 2020 | |||||||
(Unaudited) |
||||||||
Assets |
||||||||
Investments |
||||||||
Fixed maturities |
||||||||
Held to maturity, at amortized cost |
$ |
$ |
||||||
Available for sale, at fair value |
||||||||
Equity securities, at fair value |
||||||||
Short-term investments, at cost, which approximates fair value |
||||||||
Total investments |
||||||||
Cash |
||||||||
Accrued investment income |
||||||||
Premiums receivable |
||||||||
Reinsurance receivable |
||||||||
Deferred policy acquisition costs |
||||||||
Deferred tax asset, net |
||||||||
Prepaid reinsurance premiums |
||||||||
Property and equipment, net |
||||||||
Accounts receivable - securities |
||||||||
Federal income taxes recoverable |
||||||||
Goodwill |
||||||||
Other intangible assets |
||||||||
Other |
||||||||
Total assets |
$ |
$ |
||||||
Liabilities and Stockholders’ Equity |
||||||||
Liabilities |
||||||||
Losses and loss expenses |
$ |
$ |
||||||
Unearned premiums |
||||||||
Accrued expenses |
||||||||
Reinsurance balances payable |
||||||||
Borrowings under lines of credit |
||||||||
Cash dividends declared to stockholders |
||||||||
Subordinated debentures |
||||||||
Accounts payable - securities |
||||||||
Due to affiliate |
||||||||
Other |
||||||||
Total liabilities |
||||||||
Stockholders’ Equity |
||||||||
Preferred stock, $ |
||||||||
Class A common stock, $ |
||||||||
Class B common stock, $.01 par value, authorized |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive income |
||||||||
Retained earnings |
||||||||
Treasury stock, at cost |
( |
) |
( |
) | ||||
Total stockholders’ equity |
||||||||
Total liabilities and stockholders’ equity |
$ |
$ |
||||||
Three Months Ended June 30, | ||||||||
2021 |
2020 | |||||||
Revenues: |
||||||||
Net premiums earned |
$ |
$ |
||||||
Investment income, net of investment expenses |
||||||||
Net investment gains (includes $ |
||||||||
Lease income |
||||||||
Installment payment fees |
||||||||
Total revenues |
||||||||
Expenses: |
||||||||
Net losses and loss expenses |
||||||||
Amortization of deferred policy acquisition costs |
||||||||
Other underwriting expenses |
||||||||
Policyholder dividends |
||||||||
Interest |
||||||||
Other expenses, net |
||||||||
Total expenses |
||||||||
Income before income tax expense |
||||||||
Income tax expense (includes $ |
||||||||
Net income |
$ |
$ |
||||||
Earnings per common share: |
||||||||
Class A common stock - basic |
$ |
$ |
||||||
Class A common stock - diluted |
$ |
$ |
||||||
Class B common stock - basic and diluted |
$ |
$ |
||||||
Three Months Ended June 30, | ||||||||
2021 |
2020 | |||||||
Net income |
$ |
$ |
||||||
Other comprehensive income, net of tax |
||||||||
Unrealized gain on securities: |
||||||||
Unrealized holding gain during the period, net of income tax expense of $ |
||||||||
Reclassification adjustment for gains included in net income, net of income tax expense of $ |
( |
) |
( |
) | ||||
Other comprehensive income |
||||||||
Comprehensive income |
$ |
$ |
||||||
Six Months Ended June 30, | ||||||||
2021 |
2020 | |||||||
Revenues: |
||||||||
Net premiums earned |
$ |
$ |
||||||
Investment income, net of investment expenses |
||||||||
Net investment gains (losses) (includes $ |
( |
) | ||||||
Lease income |
||||||||
Installment payment fees |
||||||||
Total revenues |
||||||||
Expenses: |
||||||||
Net losses and loss expenses |
||||||||
Amortization of deferred policy acquisition costs |
||||||||
Other underwriting expenses |
||||||||
Policyholder dividends |
||||||||
Interest |
||||||||
Other expenses, net |
||||||||
Total expenses |
||||||||
Income before income tax expense |
||||||||
Income tax expense (includes $ |
||||||||
Net income |
$ |
$ |
||||||
Earnings per common share: |
||||||||
Class A common stock - basic |
$ |
$ |
||||||
Class A common stock - diluted |
$ |
$ |
||||||
Class B common stock - basic and diluted |
$ |
$ |
||||||
Six Months Ended June 30, | ||||||||
2021 |
2020 | |||||||
Net income |
$ |
$ |
||||||
Other comprehensive (loss) income, net of tax |
||||||||
Unrealized (loss) gain on securities: |
||||||||
Unrealized holding (loss) gain during the period, net of income tax (benefit) expense of ($ |
( |
) |
||||||
Reclassification adjustment for gains included in net income, net of income tax expense of $ |
( |
) |
( |
) | ||||
Other comprehensive (loss) income |
( |
) |
||||||
Comprehensive income |
$ |
$ |
||||||
Class A Shares |
Class B Shares |
Class A Amount |
Class B Amount |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income |
Retained Earnings |
Treasury Stock |
Total Stockholders’ Equity | ||||||||||||||||||||||||||||
Balance, December 31, 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||||||||
Issuance of common stock (stock compensation plans) |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Cash dividends declared |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||
Grant of stock options |
— |
— |
— |
— |
— |
( |
) |
— |
— |
|||||||||||||||||||||||||||
Other comprehensive loss |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||||||||||
Balance, March 31, 2021 |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||||||||
Issuance of common stock (stock compensation plans) |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Cash dividends declared |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||
Grant of stock options |
— |
— |
— |
— |
— |
( |
) |
— |
— |
|||||||||||||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Balance, June 30, 2021 |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||||||||
Class A Shares |
Class B Shares |
Class A Amount |
Class B Amount |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income |
Retained Earnings |
Treasury Stock |
Total Stockholders’ Equity | ||||||||||||||||||||||||||||
Balance, December 31, 2019 |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||||||||
Issuance of common stock (stock compensation plans) |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Cash dividends declared |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||
Grant of stock options |
— |
— |
— |
— |
— |
( |
) |
— |
— |
|||||||||||||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Balance, March 31, 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||||||||
Issuance of common stock (stock compensation plans) |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Cash dividends declared |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||
Grant of stock options |
— |
— |
— |
— |
— |
( |
) |
— |
— |
|||||||||||||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Balance, June 30, 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||||||||
Six Months Ended June 30, |
||||||||
|
|
| ||||||
2021 |
2020 |
|||||||
|
|
|
|
|
| |||
Cash Flows from Operating Activities: |
||||||||
Net income |
$ |
$ |
||||||
|
|
|
|
|
| |||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation, amortization and other non-cash items |
||||||||
Net investment (gains) losses |
( |
) |
||||||
Changes in assets and liabilities: |
||||||||
Losses and loss expenses |
||||||||
Unearned premiums |
||||||||
Premiums receivable |
( |
) |
( |
) | ||||
Deferred acquisition costs |
( |
) |
( |
) | ||||
Deferred income taxes |
( |
) | ||||||
Reinsurance receivable |
( |
) |
( |
) | ||||
Prepaid reinsurance premiums |
( |
) |
( |
) | ||||
Accrued investment income |
( |
) |
( |
) | ||||
Due to affiliate |
( |
) | ||||||
Reinsurance balances payable |
||||||||
Current income taxes |
( |
) |
||||||
Accrued expenses |
( |
) |
( |
) | ||||
Other, net |
||||||||
|
|
|
|
|
| |||
Net adjustments |
||||||||
|
|
|
|
|
| |||
Net cash provided by operating activities |
||||||||
|
|
|
|
|
| |||
Cash Flows from Investing Activities: |
||||||||
Purchases of fixed maturities, held to maturity |
( |
) |
( |
) | ||||
Purchases of fixed maturities, available for sale |
( |
) |
( |
) | ||||
Purchases of equity securities, available for sale |
( |
) |
( |
) | ||||
Maturity of fixed maturities: |
||||||||
Held to maturity |
||||||||
Available for sale |
||||||||
Sales of fixed maturities, available for sale |
— |
|||||||
Sales of equity securities, available for sale |
||||||||
Net sales of property and equipment |
||||||||
Net purchases of short-term investments |
( |
) |
( |
) | ||||
|
|
|
|
|
| |||
Net cash used in investing activities |
( |
) |
( |
) | ||||
|
|
|
|
|
| |||
Cash Flows from Financing Activities: |
||||||||
Cash dividends paid |
( |
) |
( |
) | ||||
Issuance of common stock |
||||||||
Borrowing under lines of credit |
— |
|||||||
Payments on lines of credit |
( |
) |
— |
|||||
|
|
|
|
|
| |||
Net cash (used in) provided by financing activities |
( |
) |
||||||
|
|
|
|
|
| |||
Net (decrease) increase in cash |
( |
) |
||||||
Cash at beginning of period |
||||||||
|
|
|
|
|
| |||
Cash at end of period |
$ |
$ |
||||||
|
|
|
|
|
| |||
Cash paid during period - Interest |
$ |
$ |
||||||
Net cash paid during period - Taxes |
$ |
$ |
— |
1 - |
Organization |
2 - |
Basis of Presentation |
3 - |
Earnings Per Share |
Three Months Ended June 30, | ||||||||||||||||
2021 |
2020 | |||||||||||||||
Class A |
Class B |
Class A |
Class B | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Basic earnings per share: |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of net income |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Denominator: |
||||||||||||||||
Weighted-average shares outstanding |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic earnings per share |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
||||||||||||||||
Diluted earnings per share: |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of net income |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Denominator: |
||||||||||||||||
Number of shares used in basic computation |
||||||||||||||||
Weighted-average shares effect of dilutive securities: |
||||||||||||||||
Director and employee stock options |
— |
— |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Number of shares used in diluted computation |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Diluted earnings per share |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, | ||||||||||||||||
2021 |
2020 | |||||||||||||||
Class A |
Class B |
Class A |
Class B | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Basic earnings per share: |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of net income |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Denominator: |
||||||||||||||||
Weighted-average shares outstanding |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic earnings per share |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
||||||||||||||||
Diluted earnings per share: |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of net income |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Denominator: |
||||||||||||||||
Number of shares used in basic computation |
||||||||||||||||
Weighted-average shares effect of dilutive securities: |
||||||||||||||||
Director and employee stock options |
— |
— |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Number of shares used in diluted computation |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Diluted earnings per share |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||
2021 |
2020 |
2021 |
2020 | |||||||||||||
Number of options to purchase Class A shares excluded |
4 - |
Reinsurance |
• | excess of loss reinsurance, under which the losses of Donegal Mutual and our insurance subsidiaries are automatically reinsured, through a series of contracts, over a set retention of $ |
• | catastrophe reinsurance, under which Donegal Mutual and our insurance subsidiaries recover, through a series of reinsurance agreements, |
5 - |
Investments |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Held to Maturity |
||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies |
$ |
$ |
$ |
$ |
||||||||||||
Obligations of states and political subdivisions |
||||||||||||||||
Corporate securities |
||||||||||||||||
Mortgage-backed securities |
||||||||||||||||
Totals |
$ |
$ |
$ |
$ |
||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Available for Sale |
||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies |
$ |
$ |
$ |
$ |
||||||||||||
Obligations of states and political subdivisions |
||||||||||||||||
Corporate securities |
||||||||||||||||
Mortgage-backed securities |
||||||||||||||||
Totals |
$ |
$ |
$ |
$ |
||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Held to Maturity |
||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies |
$ |
$ |
$ |
$ |
||||||||||||
Obligations of states and political subdivisions |
||||||||||||||||
Corporate securities |
||||||||||||||||
Mortgage-backed securities |
||||||||||||||||
Totals |
$ |
$ |
$ |
$ |
||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Available for Sale |
||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies |
$ |
$ |
$ |
$ |
||||||||||||
Obligations of states and political subdivisions |
||||||||||||||||
Corporate securities |
||||||||||||||||
Mortgage-backed securities |
||||||||||||||||
Totals |
$ |
$ |
$ |
$ |
||||||||||||
Amortized Cost |
Estimated Fair Value | |||||||
(in thousands) | ||||||||
Held to maturity |
||||||||
Due in one year or less |
$ |
$ |
||||||
Due after one year through five years |
||||||||
Due after five years through ten years |
||||||||
Due after ten years |
||||||||
Mortgage-backed securities |
||||||||
Total held to maturity |
$ |
$ |
||||||
Available for sale |
||||||||
Due in one year or less |
$ |
$ |
||||||
Due after one year through five years |
||||||||
Due after five years through ten years |
||||||||
Due after ten years |
||||||||
Mortgage-backed securities |
||||||||
Total available for sale |
$ |
$ |
||||||
Cost |
Gross Gains |
Gross Losses |
Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Equity securities |
$ |
$ |
$ |
$ |
Cost |
Gross Gains |
Gross Losses |
Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Equity securities |
$ |
$ |
$ |
$ |
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||
2021 |
2020 |
2021 |
2020 | |||||||||||||
(in thousands) |
(in thousands) | |||||||||||||||
Gross investment gains: |
||||||||||||||||
Fixed maturities |
$ |
$ |
$ |
$ |
||||||||||||
Equity securities |
||||||||||||||||
Gross investment losses: |
||||||||||||||||
Fixed maturities |
||||||||||||||||
Equity securities |
||||||||||||||||
Net investment gains (losses) |
$ |
$ |
$ |
$ |
( |
) | ||||||||||
Less Than 12 Months |
More Than 12 Months | |||||||||||||||
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses | |||||||||||||
(in thousands) | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies |
$ |
$ |
$ |
— |
$ |
— |
||||||||||
Obligations of states and political subdivisions |
||||||||||||||||
Corporate securities |
||||||||||||||||
Mortgage-backed securities |
||||||||||||||||
Totals |
$ |
$ |
$ |
$ |
||||||||||||
Less Than 12 Months |
More Than 12 Months | |||||||||||||||
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses | |||||||||||||
(in thousands) | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies |
$ |
$ |
$ |
— |
$ |
— |
||||||||||
Obligations of states and political subdivisions |
— |
— |
||||||||||||||
Corporate securities |
||||||||||||||||
Mortgage-backed securities |
||||||||||||||||
Totals |
$ |
$ |
$ |
$ |
||||||||||||
6 - |
Segment Information |
Three Months Ended June 30, | ||||||||
2021 |
2020 | |||||||
(in thousands) | ||||||||
Revenues: |
||||||||
Premiums earned: |
||||||||
Commercial lines |
$ |
$ |
||||||
Personal lines |
||||||||
GAAP premiums earned |
||||||||
Net investment income |
||||||||
Investment gains |
||||||||
Other |
||||||||
Total revenues |
$ |
$ |
||||||
Income before income tax expense: |
||||||||
Underwriting income: |
||||||||
Commercial lines |
$ |
$ |
||||||
Personal lines |
||||||||
SAP underwriting income |
||||||||
GAAP adjustments |
||||||||
GAAP underwriting income |
||||||||
Net investment income |
||||||||
Investment gains |
||||||||
Other |
||||||||
Income before income tax expense |
$ |
$ |
||||||
Six Months Ended June 30, | ||||||||
2021 |
2020 | |||||||
(in thousands) | ||||||||
Revenues: |
||||||||
Premiums earned: |
||||||||
Commercial lines |
$ |
$ |
||||||
Personal lines |
||||||||
GAAP premiums earned |
||||||||
Net investment income |
||||||||
Investment gains (losses) |
( |
) | ||||||
Other |
||||||||
Total revenues |
$ |
$ |
||||||
Income before income tax expense: |
||||||||
Underwriting (loss) income: |
||||||||
Commercial lines |
$ |
( |
) |
$ |
||||
Personal lines |
||||||||
SAP underwriting (loss) income |
( |
) |
||||||
GAAP adjustments |
||||||||
GAAP underwriting income |
||||||||
Net investment income |
||||||||
Investment gains (losses) |
( |
) | ||||||
Other |
||||||||
Income before income tax expense |
$ |
$ |
||||||
7 - |
Borrowings |
FHLB of Pittsburgh stock purchased and owned |
$ |
|||
Collateral pledged, at par (carrying value $ |
||||
Borrowing capacity currently available |
8 - |
Share–Based Compensation |
9 - |
Fair Value Measurements |
Fair Value Measurements Using | ||||||||||||||||
Fair Value |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) | |||||||||||||
(in thousands) | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies |
$ |
$ |
— |
$ |
$ |
— |
||||||||||
Obligations of states and political subdivisions |
— |
— |
||||||||||||||
Corporate securities |
— |
— |
||||||||||||||
Mortgage-backed securities |
— |
— |
||||||||||||||
Equity securities |
— |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total investments in the fair value hierarchy |
$ |
$ |
$ |
$ |
— |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using | ||||||||||||||||
Fair Value |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) | |||||||||||||
(in thousands) | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies |
$ |
$ |
— |
$ |
$ |
— |
||||||||||
Obligations of states and political subdivisions |
— |
— |
||||||||||||||
Corporate securities |
— |
— |
||||||||||||||
Mortgage-backed securities |
— |
— |
||||||||||||||
Equity securities |
— |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Totals |
$ |
$ |
$ |
$ |
— |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
10 - |
Income Taxes |
11 - |
Liabilities for Losses and Loss Expenses |
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
(in thousands) | ||||||||
Balance at January 1 |
$ | |
$ | |
||||
Less reinsurance recoverable |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net balance at January 1 |
||||||||
|
|
|
|
|||||
Incurred related to: |
||||||||
Current year |
||||||||
Prior years |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total incurred |
||||||||
|
|
|
|
|||||
Paid related to: |
||||||||
Current year |
||||||||
Prior years |
||||||||
|
|
|
|
|||||
Total paid |
||||||||
|
|
|
|
|||||
Net balance at end of period |
||||||||
Plus reinsurance recoverable |
||||||||
|
|
|
|
|||||
Balance at end of period |
$ | $ | ||||||
|
|
|
|
12 |
- Impact of New Accounting Standards |
June 30, 2021 |
December 31, 2020 |
|||||||
|
|
|
|
|
| |||
(in thousands) |
||||||||
Commercial lines: |
||||||||
Automobile |
$ |
159,162 |
$ |
151,813 |
||||
Workers’ compensation |
116,346 |
118,037 |
||||||
Commercial multi-peril |
139,497 |
126,299 |
||||||
Other |
16,476 |
13,212 |
||||||
|
|
|
|
|
| |||
Total commercial lines |
431,481 |
409,361 |
||||||
|
|
|
|
|
| |||
Personal lines: |
||||||||
Automobile |
118,165 |
120,861 |
||||||
Homeowners |
23,169 |
20,976 |
||||||
Other |
7,284 |
5,991 |
||||||
|
|
|
|
|
| |||
Total personal lines |
148,618 |
147,828 |
||||||
|
|
|
|
|
| |||
Total commercial and personal lines |
580,099 |
557,189 |
||||||
Plus reinsurance recoverable |
418,559 |
404,818 |
||||||
|
|
|
|
|
| |||
Total liabilities for losses and loss expenses |
$ |
998,658 |
$ |
962,007 |
||||
|
|
|
|
|
|
Percentage Change in Loss and Loss Expense Reserves Net of Reinsurance |
Adjusted Loss and Loss Expense Reserves Net of Reinsurance at June 30, 2021 |
Percentage Change in Stockholders’ Equity at June 30, 2021(1) |
Adjusted Loss and Loss Expense Reserves Net of Reinsurance at December 31, 2020 |
Percentage Change in Stockholders’ Equity at December 31, 2020(1) | ||||
|
|
|
|
| ||||
(dollars in thousands) | ||||||||
(10.0)% |
$522,089 |
8.3% |
$501,470 |
8.5% | ||||
(7.5) |
536,592 |
6.2 |
515,400 |
6.4 | ||||
(5.0) |
551,094 |
4.2 |
529,330 |
4.3 | ||||
(2.5) |
565,597 |
2.1 |
543,259 |
2.1 | ||||
Base |
580,099 |
— |
557,189 |
— | ||||
2.5 |
594,601 |
(2.1) |
571,119 |
(2.1) | ||||
5.0 |
609,104 |
(4.2) |
585,048 |
(4.3) | ||||
7.5 |
623,606 |
(6.2) |
598,978 |
(6.4) | ||||
10.0 |
638,109 |
(8.3) |
612,908 |
(8.5) |
(1) | Net of income tax effect. |
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||
|
|
|
|
|
| |||||||||||
2021 |
2020 |
2021 |
2020 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
(in thousands) |
||||||||||||||||
Net premiums earned |
$192,489 |
$184,374 |
$379,740 |
$371,627 |
||||||||||||
Change in net unearned premiums |
17,116 |
9,329 |
45,727 |
20,313 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net premiums written |
$209,605 |
$193,703 |
$425,467 |
$391,940 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
• | the statutory loss ratio, which is the ratio of calendar-year net incurred losses and loss expenses to net premiums earned; |
• | the statutory expense ratio, which is the ratio of expenses incurred for net commissions, premium taxes and underwriting expenses to net premiums written; and |
• | the statutory dividend ratio, which is the ratio of dividends to holders of workers’ compensation policies to net premiums earned. |
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||
|
|
|
|
|
| |||||||||||
2021 |
2020 |
2021 |
2020 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
GAAP Combined Ratios (Total Lines) |
||||||||||||||||
Loss ratio (non-weather) |
53.1 |
% |
47.0 |
% |
56.5 |
% |
53.0 |
% | ||||||||
Loss ratio (weather-related) |
6.1 |
10.1 |
4.9 |
6.9 |
||||||||||||
Expense ratio |
36.0 |
34.3 |
35.1 |
33.8 |
||||||||||||
Dividend ratio |
0.9 |
0.9 |
0.8 |
1.0 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Combined ratio |
96.1 |
% |
92.3 |
% |
97.3 |
% |
94.7 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
||||||||||||||||
Statutory Combined Ratios |
||||||||||||||||
Commercial lines: |
||||||||||||||||
Automobile |
105.5 |
% |
104.4 |
% |
103.9 |
% |
110.8 |
% | ||||||||
Workers’ compensation |
84.0 |
80.9 |
89.3 |
85.5 |
||||||||||||
Commercial multi-peril |
94.5 |
95.8 |
100.8 |
92.4 |
||||||||||||
Other |
77.2 |
80.6 |
68.8 |
72.4 |
||||||||||||
Total commercial lines |
94.3 |
93.5 |
96.6 |
94.7 |
||||||||||||
Personal lines: |
||||||||||||||||
Automobile |
91.1 |
76.1 |
92.2 |
88.4 |
||||||||||||
Homeowners |
110.1 |
109.5 |
102.4 |
100.1 |
||||||||||||
Other |
74.5 |
78.6 |
75.7 |
72.6 |
||||||||||||
Total personal lines |
96.9 |
88.1 |
94.7 |
91.5 |
||||||||||||
Total commercial and personal lines |
95.4 |
91.0 |
95.9 |
93.3 |
Period |
(a) Total Number of Shares (or Units) Purchased |
(b) Average Price Paid per Share (or Unit) |
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||
Month #1 April 1-30, 2021 |
Class A – None Class B – None |
Class A – None Class B – None |
Class A – None Class B – None |
|||||
Month #2 May 1-31, 2021 |
Class A – None Class B – None |
Class A – None Class B – None |
Class A – None Class B – None |
|||||
Month #3 June 1-30, 2021 |
Class A – 200,000 Class B – None |
Class A – $15.22 Class B – None |
Class A – 200,000 Class B – None |
(1) | ||||
Total |
Class A – 200,000 Class B – None |
Class A – $15.22 Class B – None |
Class A – 200,000 Class B – None |
(1) | Donegal Mutual purchased these shares pursuant to its announcement on August 17, 2004 that it will, at its discretion, purchase shares of our Class A common stock and Class B common stock at market prices prevailing from time to time in the open market subject to the provisions of SEC Rule 10b-18 and in privately negotiated transactions. Such announcement did not stipulate a maximum number of shares that may be purchased under this program. |
Exhibit No. |
Description | |
Exhibit 31.1 | ||
Exhibit 31.2 | ||
Exhibit 32.1 | ||
Exhibit 32.2 | ||
Exhibit 101.INS | XBRL Instance Document | |
Exhibit 101.SCH | XBRL Taxonomy Extension Schema Document | |
Exhibit 101.PRE | XBRL Taxonomy Presentation Linkbase Document | |
Exhibit 101.CAL | XBRL Taxonomy Calculation Linkbase Document | |
Exhibit 101.LAB | XBRL Taxonomy Label Linkbase Document | |
Exhibit 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
DONEGAL GROUP INC. | ||||||
August 6, 2021 | By: | /s/ Kevin G. Burke | ||||
Kevin G. Burke, President and Chief Executive Officer | ||||||
August 6, 2021 | By: | /s/ Jeffrey D. Miller | ||||
Jeffrey D. Miller, Executive Vice President | ||||||
and Chief Financial Officer |