☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2020
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 23-2424711 | |
(State or other jurisdiction of
| (I.R.S. Employer
|
Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered | ||
Class A Common Stock, $.01 par value | DGICA | The NASDAQ Global Select Market | ||
Class B Common Stock, $.01 par value | DGICB | The NASDAQ Global Select Market |
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☒ | |||
Emerging growth company | ☐ |
Page | ||||||
PART I | FINANCIAL INFORMATION | |||||
Item 1. | Financial Statements | 1 | ||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |||||
Item 4. | Controls and Procedures | |||||
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| 32 | |||||
PART II | OTHER INFORMATION | |||||
Item 1. | Legal Proceedings | 33 | ||||
Item 1A. | Risk Factors | |||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||
Item 3. | Defaults upon Senior Securities | |||||
Item 4. | Removed and Reserved | |||||
Item 5. | Other Information | |||||
Item 6. | Exhibits | |||||
September 30, 2019 | December 31, 2018 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Investments | ||||||||
Fixed maturities | ||||||||
Held to maturity, at amortized cost | $ | 458,888,742 | $ | 402,798,518 | ||||
Available for sale, at fair value | 559,101,387 | 526,558,304 | ||||||
Equity securities, at fair value | 52,098,509 | 43,667,009 | ||||||
Investment in affiliate | — | 41,025,975 | ||||||
Short-term investments, at cost, which approximates fair value | 8,626,324 | 16,748,760 | ||||||
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Total investments | 1,078,714,962 | 1,030,798,566 | ||||||
Cash | 55,268,760 | 52,594,461 | ||||||
Accrued investment income | 7,285,349 | 6,561,199 | ||||||
Premiums receivable | 173,749,759 | 156,702,250 | ||||||
Reinsurance receivable | 362,366,588 | 343,369,065 | ||||||
Deferred policy acquisition costs | 63,685,811 | 60,615,127 | ||||||
Deferred tax asset, net | 8,965,877 | 13,069,755 | ||||||
Prepaid reinsurance premiums | 141,958,161 | 135,379,777 | ||||||
Property and equipment, net | 4,622,446 | 4,690,704 | ||||||
Accounts receivable - securities | 48,428 | 261,829 | ||||||
Federal income taxes receivable | 15,766,182 | 19,032,604 | ||||||
Goodwill | 5,625,354 | 5,625,354 | ||||||
Other intangible assets | 958,010 | 958,010 | ||||||
Other | 2,069,524 | 2,419,566 | ||||||
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Total assets | $ | 1,921,085,211 | $ | 1,832,078,267 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Liabilities | ||||||||
Unpaid losses and loss expenses | $ | 864,534,338 | $ | 814,665,224 | ||||
Unearned premiums | 528,037,212 | 506,528,606 | ||||||
Accrued expenses | 26,964,878 | 25,442,146 | ||||||
Reinsurance balances payable | 2,032,722 | 3,882,193 | ||||||
Borrowings under lines of credit | 35,000,000 | 60,000,000 | ||||||
Cash dividends declared to stockholders | — | 3,948,484 | ||||||
Subordinated debentures | 5,000,000 | 5,000,000 | ||||||
Accounts payable - securities | 1,956,151 | 1,003,810 | ||||||
Due to affiliate | 7,015,832 | 10,874,540 | ||||||
Other | 7,992,473 | 1,863,363 | ||||||
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Total liabilities | 1,478,533,606 | 1,433,208,366 | ||||||
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Stockholders’ Equity | ||||||||
Preferred stock, $.01 par value, authorized 2,000,000 shares; none issued | — | — | ||||||
Class A common stock, $.01 par value, authorized 50,000,000 shares, issued 26,052,220 and 25,819,341 shares and outstanding 23,049,632 and 22,816,753 shares | 260,523 | 258,194 | ||||||
Class B common stock, $.01 par value, authorized 10,000,000 shares, issued 5,649,240 shares and outstanding 5,576,775 shares | 56,492 | 56,492 | ||||||
Additionalpaid-in capital | 265,680,180 | 261,258,423 | ||||||
Accumulated other comprehensive income (loss) | 418,394 | (14,228,059 | ) | |||||
Retained earnings | 217,362,373 | 192,751,208 | ||||||
Treasury stock, at cost | (41,226,357 | ) | (41,226,357 | ) | ||||
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Total stockholders’ equity | 442,551,605 | 398,869,901 | ||||||
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Total liabilities and stockholders’ equity | $ | 1,921,085,211 | $ | 1,832,078,267 | ||||
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September 30, 2020 | December 31, 2019 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Investments | ||||||||
Fixed maturities | ||||||||
Held to maturity, at amortized cost | $ | 552,981,914 | $ | 476,093,782 | ||||
Available for sale, at fair value | 578,040,314 | 564,951,803 | ||||||
Equity securities, at fair value | 54,944,826 | 55,477,556 | ||||||
Short-term investments, at cost, which approximates fair value | 20,685,938 | 14,030,222 | ||||||
Total investments | 1,206,652,992 | 1,110,553,363 | ||||||
Cash | 87,876,852 | 49,318,930 | ||||||
Accrued investment income | 8,623,259 | 7,066,029 | ||||||
Premiums receivable | 177,674,682 | 165,732,949 | ||||||
Reinsurance receivable | 403,864,468 | 367,021,468 | ||||||
Deferred policy acquisition costs | 61,554,554 | 59,284,859 | ||||||
Deferred tax asset, net | 6,511,012 | 8,514,311 | ||||||
Prepaid reinsurance premiums | 174,391,958 | 142,475,767 | ||||||
Property and equipment, net | 4,436,397 | 4,558,072 | ||||||
Accounts receivable - securities | 299,538 | 4,961 | ||||||
Federal income taxes recoverable | 4,405,349 | — | ||||||
Goodwill | 5,625,354 | 5,625,354 | ||||||
Other intangible assets | 958,010 | 958,010 | ||||||
Other | 1,332,570 | 2,047,058 | ||||||
Total assets | $ | 2,144,206,995 | $ | 1,923,161,131 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Liabilities | ||||||||
Unpaid losses and loss expenses | $ | 941,930,342 | $ | 869,673,849 | ||||
Unearned premiums | 558,231,113 | 510,147,485 | ||||||
Accrued expenses | 24,584,358 | 28,453,744 | ||||||
Reinsurance balances payable | 2,376,710 | 2,116,084 | ||||||
Borrowings under lines of credit | 85,000,000 | 35,000,000 | ||||||
Cash dividends declared to stockholders | 0 | 4,075,234 | ||||||
Subordinated debentures | 5,000,000 | 5,000,000 | ||||||
Accounts payable—securities | 9,072,150 | 1,119 | ||||||
Income taxes payable | 0 | 84,831 | ||||||
Due to affiliate | 6,455,268 | 10,069,171 | ||||||
Other | 7,488,378 | 7,524,095 | ||||||
Total liabilities | 1,640,138,319 | 1,472,145,612 | ||||||
Stockholders’ Equity | ||||||||
Preferred stock, $.01 par value, authorized 2,000,000 shares; 0ne issued | — | — | ||||||
Class A common stock, $.01 par value, authorized 50,000,000 shares, issued 27,141,361 and 26,203,935 shares and outstanding24,138,773 and 23,201,347 shares | 271,414 | 262,040 | ||||||
Class B common stock, $.01 par value, authorized 10,000,000 shares, issued 5,649,240 shares and outstanding 5,576,775 shares | 56,492 | 56,492 | ||||||
Additional paid-in capital | 281,917,193 | 268,151,601 | ||||||
Accumulated other comprehensive income | 10,370,217 | 504,170 | ||||||
Retained earnings | 252,679,717 | 223,267,573 | ||||||
Treasury stock, at cost | (41,226,357 | ) | (41,226,357 | ) | ||||
Total stockholders’ equity | 504,068,676 | 451,015,519 | ||||||
Total liabilities and stockholders’ equity | $ | 2,144,206,995 | $ | 1,923,161,131 | ||||
Three Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Revenues: | ||||||||
Net premiums earned | $ | 189,821,058 | $ | 187,661,705 | ||||
Investment income, net of investment expenses | 7,389,749 | 6,620,491 | ||||||
Net investment (losses) gains (includes $102,311 and ($20,512) accumulated other comprehensive income reclassifications) | (369,041 | ) | 3,463,504 | |||||
Lease income | 110,598 | 119,934 | ||||||
Installment payment fees | 1,057,536 | 1,305,778 | ||||||
Equity in earnings of Donegal Financial Services Corporation | — | 732,768 | ||||||
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Total revenues | 198,009,900 | 199,904,180 | ||||||
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Expenses: | ||||||||
Net losses and loss expenses | 130,743,395 | 140,726,106 | ||||||
Amortization of deferred policy acquisition costs | 31,304,000 | 31,110,000 | ||||||
Other underwriting expenses | 26,516,518 | 24,528,860 | ||||||
Policyholder dividends | 2,446,696 | 1,050,200 | ||||||
Interest | 443,179 | 651,768 | ||||||
Other expenses, net | 251,228 | 560,260 | ||||||
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Total expenses | 191,705,016 | 198,627,194 | ||||||
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Income before income tax expense | 6,304,884 | 1,276,986 | ||||||
Income tax expense (includes $21,485 and ($4,308) income tax expense (benefit) from reclassification items) | 1,118,505 | 70,630 | ||||||
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Net income | $ | 5,186,379 | $ | 1,206,356 | ||||
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Earnings per common share: | ||||||||
Class A common stock - basic | $ | 0.19 | $ | 0.04 | ||||
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Class A common stock - diluted | $ | 0.18 | $ | 0.04 | ||||
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Class B common stock - basic and diluted | $ | 0.16 | $ | 0.04 | ||||
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Three Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
Revenues: | ||||||||
Net premiums earned | $ | 184,925,733 | $ | 189,821,058 | ||||
Investment income, net of investment expenses | 7,403,251 | 7,389,749 | ||||||
Net investment gains (losses) (includes $134,795 and $102,311 accumulated other comprehensive income reclassifications) | 3,268,459 | (369,041 | ) | |||||
Lease income | 107,907 | 110,598 | ||||||
Installment payment fees | 806,916 | 1,057,536 | ||||||
Total revenues | 196,512,266 | 198,009,900 | ||||||
Expenses: | ||||||||
Net losses and loss expenses | 120,881,041 | 130,743,395 | ||||||
Amortization of deferred policy acquisition costs | 29,605,000 | 31,304,000 | ||||||
Other underwriting expenses | 29,480,706 | 26,516,518 | ||||||
Policyholder dividends | 1,811,019 | 2,446,696 | ||||||
Interest | 219,039 | 443,179 | ||||||
Other expenses, net | 183,877 | 251,228 | ||||||
Total expenses | 182,180,682 | 191,705,016 | ||||||
Income before income tax expense | 14,331,584 | 6,304,884 | ||||||
Income tax expense (includes $28,307 and $21,485 income tax expense from reclassification items) | 2,494,586 | 1,118,505 | ||||||
Net income | $ | 11,836,998 | $ | 5,186,379 | ||||
Earnings per common share: | ||||||||
Class A common stock - basic | $ | 0.41 | $ | 0.19 | ||||
Class A common stock - diluted | $ | 0.41 | $ | 0.18 | ||||
Class B common stock - basic and diluted | $ | 0.37 | $ | 0.16 | ||||
Three Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Net income | $ | 5,186,379 | $ | 1,206,356 | ||||
Other comprehensive income (loss), net of tax | ||||||||
Unrealized gain (loss) on securities: | ||||||||
Unrealized holding gain (loss) during the period, net of income tax expense (benefit) of $621,120 and ($609,572) | 2,336,599 | (2,293,154 | ) | |||||
Reclassification adjustment for (gains) losses included in net income, net of income tax expense (benefit) of $21,485 and ($4,308) | (80,826 | ) | 16,204 | |||||
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Other comprehensive income (loss) | 2,255,773 | (2,276,950 | ) | |||||
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Comprehensive income (loss) | $ | 7,442,152 | $ | (1,070,594 | ) | |||
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Three Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
Net income | $ | 11,836,998 | $ | 5,186,379 | ||||
Other comprehensive income, net of tax | ||||||||
Unrealized gain on securities: | ||||||||
Unrealized holding gain during the period, net of income tax expense of $29,102 and $621,120 | 109,480 | 2,336,599 | ||||||
Reclassification adjustment for gains included in net income, net of income tax expense of $28,307 and $21,485 | (106,488 | ) | (80,826 | ) | ||||
Other comprehensive income | 2,992 | 2,255,773 | ||||||
Comprehensive income | $ | 11,839,990 | $ | 7,442,152 | ||||
Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Revenues: | ||||||||
Net premiums earned | $ | 566,657,613 | $ | 555,140,395 | ||||
Investment income, net of investment expenses | 21,727,904 | 19,341,012 | ||||||
Net investment gains (includes $154,725 and ($52,828) accumulated other comprehensive income reclassifications) | 19,294,229 | 4,062,475 | ||||||
Lease income | 333,852 | 365,930 | ||||||
Installment payment fees | 3,204,130 | 3,959,936 | ||||||
Equity in earnings of Donegal Financial Services Corporation | 295,000 | 2,152,738 | ||||||
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Total revenues | 611,512,728 | 585,022,486 | ||||||
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Expenses: | ||||||||
Net losses and loss expenses | 385,361,331 | 433,063,019 | ||||||
Amortization of deferred policy acquisition costs | 92,821,000 | 91,354,000 | ||||||
Other underwriting expenses | 85,409,737 | 82,343,932 | ||||||
Policyholder dividends | 6,765,834 | 3,565,971 | ||||||
Interest | 1,311,894 | 1,682,200 | ||||||
Other expenses, net | 1,155,493 | 1,604,595 | ||||||
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Total expenses | 572,825,289 | 613,613,717 | ||||||
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Income (loss) before income tax expense (benefit) | 38,687,439 | (28,591,231 | ) | |||||
Income tax expense (benefit) (includes $32,492 and ($11,094) income tax expense (benefit) from reclassification items) | 5,689,442 | (10,829,654 | ) | |||||
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Net income (loss) | $ | 32,997,997 | $ | (17,761,577 | ) | |||
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Earnings (loss) per common share: | ||||||||
Class A common stock - basic | $ | 1.18 | $ | (0.64 | ) | |||
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Class A common stock - diluted | $ | 1.17 | $ | (0.64 | ) | |||
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Class B common stock - basic and diluted | $ | 1.06 | $ | (0.59 | ) | |||
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Nine Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
Revenues: | ||||||||
Net premiums earned | $ | 556,552,279 | $ | 566,657,613 | ||||
Investment income, net of investment expenses | 21,951,679 | 21,727,904 | ||||||
Net investment (losses) gains (includes $571,123 and $154,725 accumulated other comprehensive income reclassifications) | (940,488 | ) | 19,294,229 | |||||
Lease income | 326,379 | 333,852 | ||||||
Installment payment fees | 2,433,395 | 3,204,130 | ||||||
Equity in earnings of Donegal Financial Services Corporation | — | 295,000 | ||||||
Total revenues | 580,323,244 | 611,512,728 | ||||||
Expenses: | ||||||||
Net losses and loss expenses | 343,476,586 | 385,361,331 | ||||||
Amortization of deferred policy acquisition costs | 89,176,000 | 92,821,000 | ||||||
Other underwriting expenses | 95,645,601 | 85,409,737 | ||||||
Policyholder dividends | 5,336,677 | 6,765,834 | ||||||
Interest | 871,461 | 1,311,894 | ||||||
Other expenses, net | 994,115 | 1,155,493 | ||||||
Total expenses | 535,500,440 | 572,825,289 | ||||||
Income before income tax expense | 44,822,804 | 38,687,439 | ||||||
Income tax expense (includes $119,936 and $32,492 income tax expense from reclassification items) | 6,575,907 | 5,689,442 | ||||||
Net income | $ | 38,246,897 | $ | 32,997,997 | ||||
Earnings per common share: | ||||||||
Class A common stock - basic | $ | 1.34 | $ | 1.18 | ||||
Class A common stock - diluted | $ | 1.33 | $ | 1.17 | ||||
Class B common stock - basic and diluted | $ | 1.21 | $ | 1.06 | ||||
Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Net income (loss) | $ | 32,997,997 | $ | (17,761,577 | ) | |||
Other comprehensive income (loss), net of tax | ||||||||
Unrealized gain (loss) on securities: | ||||||||
Unrealized holding gain (loss) during the period, net of income tax expense (benefit) of $3,925,853 and ($3,025,784) | 14,768,686 | (11,382,714 | ) | |||||
Reclassification adjustment for (gains) losses included in net income (loss), net of income tax expense (benefit) of $32,492 and ($11,094) | (122,233 | ) | 41,734 | |||||
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Other comprehensive income (loss) | 14,646,453 | (11,340,980 | ) | |||||
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Comprehensive income (loss) | $ | 47,644,450 | $ | (29,102,557 | ) | |||
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Nine Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
Net income | $ | 38,246,897 | $ | 32,997,997 | ||||
Other comprehensive income, net of tax | ||||||||
Unrealized gain on securities: | ||||||||
Unrealized holding gain during the period, net of income tax expense of $2,742,556 and $3,925,853 | 10,317,234 | 14,768,686 | ||||||
Reclassification adjustment for gains included in net income, net of income tax expense of $119,936 and $32,492 | (451,187 | ) | (122,233 | ) | ||||
Other comprehensive income | 9,866,047 | 14,646,453 | ||||||
Comprehensive income | $ | 48,112,944 | $ | 47,644,450 | ||||
Class A Shares | Class B Shares | Class A Amount | Class B Amount | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||||||||||
Balance, December 31, 2018 | 25,819,341 | 5,649,240 | $ | 258,194 | $ | 56,492 | $ | 261,258,423 | $ | (14,228,059 | ) | $ | 192,751,208 | $ | (41,226,357 | ) | $ | 398,869,901 | ||||||||||||||||||
Issuance of common stock (stock compensation plans) | 33,334 | — | 333 | — | 403,722 | — | — | — | 404,055 | |||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | 442,920 | — | — | — | 442,920 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 23,023,164 | — | 23,023,164 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (4,752 | ) | — | (4,752 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 144,226 | — | (144,226 | ) | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 6,468,473 | — | — | 6,468,473 | |||||||||||||||||||||||||||
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Balance, March 31, 2019 | 25,852,675 | 5,649,240 | 258,527 | 56,492 | 262,249,291 | (7,759,586 | ) | 215,625,394 | (41,226,357 | ) | 429,203,761 | |||||||||||||||||||||||||
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Issuance of common stock (stock compensation plans) | 55,933 | — | 560 | — | 752,354 | — | — | — | 752,914 | |||||||||||||||||||||||||||
Share-based compensation | 60,969 | — | 609 | — | 1,218,195 | — | — | — | 1,218,804 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 4,788,454 | — | 4,788,454 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (4,032,416 | ) | — | (4,032,416 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 100,485 | — | (100,485 | ) | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 5,922,207 | — | — | 5,922,207 | |||||||||||||||||||||||||||
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Balance, June 30, 2019 | 25,969,577 | 5,649,240 | 259,696 | 56,492 | 264,320,325 | (1,837,379 | ) | 216,280,947 | (41,226,357 | ) | 437,853,724 | |||||||||||||||||||||||||
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Issuance of common stock (stock compensation plans) | 22,926 | — | 229 | — | 280,385 | — | — | — | 280,614 | |||||||||||||||||||||||||||
Share-based compensation | 59,717 | — | 598 | — | 1,020,018 | — | — | — | 1,020,616 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 5,186,379 | — | 5,186,379 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (4,045,501 | ) | — | (4,045,501 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 59,452 | — | (59,452 | ) | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 2,255,773 | — | — | 2,255,773 | |||||||||||||||||||||||||||
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Balance, September 30, 2019 | 26,052,220 | 5,649,240 | $ | 260,523 | $ | 56,492 | $ | 265,680,180 | $ | 418,394 | $ | 217,362,373 | $ | (41,226,357 | ) | $ | 442,551,605 | |||||||||||||||||||
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2020
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 | 26,203,935 | 5,649,240 | $ | 262,040 | $ | 56,492 | $ | 268,151,601 | $ | 504,170 | $ | 223,267,573 | $ | (41,226,357 | ) | $ | 451,015,519 | |||||||||||||||||||
Issuance of common stock (stock compensation plans) | 28,924 | — | 289 | — | 376,539 | — | — | — | 376,828 | |||||||||||||||||||||||||||
Share-based compensation | 67,087 | — | 671 | — | 1,242,315 | — | — | — | 1,242,986 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 3,731,121 | — | 3,731,121 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (5,363 | ) | — | (5,363 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 118,525 | — | (118,525 | ) | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 3,199,840 | — | — | 3,199,840 | |||||||||||||||||||||||||||
Balance, March 31, 2020 | 26,299,946 | 5,649,240 | $ | 263,000 | $ | 56,492 | $ | 269,888,980 | $ | 3,704,010 | $ | 226,874,806 | $ | (41,226,357 | ) | $ | 459,560,931 | |||||||||||||||||||
Issuance of common stock (stock compensation plans) | 52,964 | — | 530 | — | 720,018 | — | — | — | 720,548 | |||||||||||||||||||||||||||
Share-based compensation | 160,869 | — | 1,608 | — | 2,490,136 | — | — | — | 2,491,744 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 22,678,778 | — | 22,678,778 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (4,255,882 | ) | — | (4,255,882 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 76,354 | — | (76,354 | ) | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 6,663,215 | — | — | 6,663,215 | |||||||||||||||||||||||||||
Balance, June 30, 2020 | 26,513,779 | 5,649,240 | $ | 265,138 | $ | 56,492 | $ | 273,175,488 | $ | 10,367,225 | $ | 245,221,348 | $ | (41,226,357 | ) | $ | 487,859,334 | |||||||||||||||||||
Issuance of common stock (stock compensation plans) | 22,662 | — | 226 | — | 273,689 | — | — | — | 273,915 | |||||||||||||||||||||||||||
Share-based compensation | 604,920 | — | 6,050 | — | 8,358,388 | — | — | — | 8,364,438 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 11,836,998 | — | 11,836,998 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (4,269,001 | ) | — | (4,269,001 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 109,628 | — | (109,628 | ) | — | 0 | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 2,992 | — | — | 2,992 | |||||||||||||||||||||||||||
Balance, September 30, 2020 | 27,141,361 | 5,649,240 | $ | 271,414 | $ | 56,492 | $ | 281,917,193 | $ | 10,370,217 | $ | 252,679,717 | $ | (41,226,357 | ) | $ | 504,068,676 | |||||||||||||||||||
Class A Shares | Class B Shares | Class A Amount | Class B Amount | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||||||||||
Balance, December 31, 2017 | 25,564,481 | 5,649,240 | $ | 255,645 | $ | 56,492 | $ | 255,401,558 | $ | (2,684,275 | ) | $ | 236,893,041 | $ | (41,226,357 | ) | $ | 448,696,104 | ||||||||||||||||||
Issuance of common stock (stock compensation plans) | 29,162 | — | 292 | — | 422,318 | — | — | — | 422,610 | |||||||||||||||||||||||||||
Share-based compensation | 32,176 | — | 322 | — | 1,024,328 | — | — | — | 1,024,650 | |||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (18,178,078 | ) | — | (18,178,078 | ) | |||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (8,587 | ) | — | (8,587 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 187,444 | — | (187,444 | ) | — | — | ||||||||||||||||||||||||||
Reclassification of equity unrealized gains | — | — | — | — | — | (4,918,655 | ) | 4,918,655 | — | — | ||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (6,602,985 | ) | — | — | (6,602,985 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Balance, March 31, 2018 | 25,625,819 | 5,649,240 | 256,259 | 56,492 | 257,035,648 | (14,205,915 | ) | 223,437,587 | (41,226,357 | ) | 425,353,714 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Issuance of common stock (stock compensation plans) | 63,430 | — | 634 | — | 960,139 | — | — | — | 960,773 | |||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | 536,472 | — | — | — | 536,472 | |||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (789,855 | ) | — | (789,855 | ) | |||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (3,930,019 | ) | — | (3,930,019 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 133,656 | — | (133,656 | ) | — | — | ||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (2,461,046 | ) | — | — | (2,461,046 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Balance, June 30, 2018 | 25,689,249 | 5,649,240 | 256,893 | 56,492 | 258,665,915 | (16,666,961 | ) | 218,584,057 | (41,226,357 | ) | 419,670,039 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Issuance of common stock (stock compensation plans) | 27,802 | — | 278 | — | 321,349 | — | — | — | 321,627 | |||||||||||||||||||||||||||
Share-based compensation | 16,168 | — | 162 | — | 552,928 | — | — | — | 553,090 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 1,206,356 | — | 1,206,356 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (3,934,135 | ) | — | (3,934,135 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 126,870 | — | (126,870 | ) | — | — | ||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (2,276,949 | ) | — | — | (2,276,949 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Balance, September 30, 2018 | 25,733,219 | 5,649,240 | $ | 257,333 | $ | 56,492 | $ | 259,667,062 | $ | (18,943,910 | ) | $ | 215,729,408 | $ | (41,226,357 | ) | $ | 415,540,028 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
Class A Shares | Class B Shares | Class A Amount | Class B Amount | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||||||||||
Balance, December 31, 2018 | 25,819,341 | 5,649,240 | $ | 258,194 | $ | 56,492 | $ | 261,258,423 | $ | (14,228,059 | ) | $ | 192,751,208 | $ | (41,226,357 | ) | $ | 398,869,901 | ||||||||||||||||||
Issuance of common stock (stock compensation plans) | 33,334 | — | 333 | — | 403,722 | — | — | — | 404,055 | |||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | 442,920 | — | — | — | 442,920 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 23,023,164 | — | 23,023,164 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (4,752 | ) | — | (4,752 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 144,226 | — | (144,226 | ) | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 6,468,473 | — | — | 6,468,473 | |||||||||||||||||||||||||||
Balance, March 31, 2019 | 25,852,675 | 5,649,240 | $ | 258,527 | $ | 56,492 | $ | 262,249,291 | $ | (7,759,586 | ) | $ | 215,625,394 | $ | (41,226,357 | ) | $ | 429,203,761 | ||||||||||||||||||
Issuance of common stock (stock compensation plans) | 55,933 | — | 560 | — | 752,354 | — | — | — | 752,914 | |||||||||||||||||||||||||||
Share-based compensation | 60,969 | — | 609 | — | 1,218,195 | — | — | — | 1,218,804 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 4,788,454 | — | 4,788,454 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (4,032,416 | ) | — | (4,032,416 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 100,485 | — | (100,485 | ) | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 5,922,207 | — | — | 5,922,207 | |||||||||||||||||||||||||||
Balance, June 30, 2019 | 25,969,577 | 5,649,240 | $ | 259,696 | $ | 56,492 | $ | 264,320,325 | $ | (1,837,379 | ) | $ | 216,280,947 | $ | (41,226,357 | ) | $ | 437,853,724 | ||||||||||||||||||
Issuance of common stock (stock compensation plans) | 22,926 | — | 229 | — | 280,385 | — | — | — | 280,614 | |||||||||||||||||||||||||||
Share-based compensation | 59,717 | — | 598 | — | 1,020,018 | — | — | — | 1,020,616 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 5,186,379 | — | 5,186,379 | |||||||||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | — | (4,045,501 | ) | — | (4,045,501 | ) | |||||||||||||||||||||||||
Grant of stock options | — | — | — | — | 59,452 | — | (59,452 | ) | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 2,255,773 | — | — | 2,255,773 | |||||||||||||||||||||||||||
Balance, September 30, 2019 | 26,052,220 | 5,649,240 | $ | 260,523 | $ | 56,492 | $ | 265,680,180 | $ | 418,394 | $ | 217,362,373 | $ | (41,226,357 | ) | $ | 442,551,605 | |||||||||||||||||||
Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | 32,997,997 | $ | (17,761,577 | ) | |||
|
|
|
| |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation, amortization and othernon-cash items | 4,299,566 | 5,288,171 | ||||||
Net investment gains | (19,294,229 | ) | (4,062,475 | ) | ||||
Equity in earnings of Donegal Financial Services Corporation | (295,000 | ) | (2,152,738 | ) | ||||
Changes in assets and liabilities: | ||||||||
Losses and loss expenses | 49,869,114 | 103,307,950 | ||||||
Unearned premiums | 21,508,606 | 27,087,130 | ||||||
Premiums receivable | (17,047,509 | ) | 87,668 | |||||
Deferred acquisition costs | (3,070,684 | ) | (4,277,025 | ) | ||||
Deferred income taxes | 210,518 | 83,985 | ||||||
Reinsurance receivable | (18,997,523 | ) | (24,125,183 | ) | ||||
Prepaid reinsurance premiums | (6,578,384 | ) | (6,504,067 | ) | ||||
Accrued investment income | (724,150 | ) | (613,539 | ) | ||||
Due to affiliate | (3,858,708 | ) | (3,577,086 | ) | ||||
Reinsurance balances payable | (1,849,471 | ) | (924,413 | ) | ||||
Current income taxes | 3,266,422 | (8,660,414 | ) | |||||
Accrued expenses | 1,522,732 | (3,652,271 | ) | |||||
Other, net | 6,479,153 | 310,988 | ||||||
|
|
|
| |||||
Net adjustments | 15,440,453 | 77,616,681 | ||||||
|
|
|
| |||||
Net cash provided by operating activities | 48,438,450 | 59,855,104 | ||||||
|
|
|
| |||||
Cash Flows from Investing Activities: | ||||||||
Purchases of fixed maturities, held to maturity | (69,297,759 | ) | (42,834,707 | ) | ||||
Purchases of fixed maturities, available for sale | (125,791,644 | ) | (88,940,126 | ) | ||||
Purchases of equity securities, available for sale | (19,055,851 | ) | (11,255,867 | ) | ||||
Maturity of fixed maturities: | ||||||||
Held to maturity | 13,723,483 | 9,485,969 | ||||||
Available for sale | 88,459,874 | 84,617,730 | ||||||
Sales of fixed maturities, available for sale | 20,548,077 | 1,388,934 | ||||||
Sales of equity securities, available for sale | 37,968,114 | 7,843,437 | ||||||
Net purchases of property and equipment | (147,005 | ) | (132,290 | ) | ||||
Sale of investment in Donegal Financial Services Corporation | 19,863,949 | — | ||||||
Dividends received from Donegal Financial Services Corporation | 14,058,824 | — | ||||||
Net sales of short-term investments | 8,122,436 | 5,953,868 | ||||||
|
|
|
| |||||
Net cash used in investing activities | (11,547,502 | ) | (33,873,052 | ) | ||||
|
|
|
| |||||
Cash Flows from Financing Activities: | ||||||||
Cash dividends paid | (12,031,153 | ) | (11,714,561 | ) | ||||
Issuance of common stock | 2,814,504 | 2,157,730 | ||||||
Borrowings under line of credit | — | 1,000,000 | ||||||
Payments on lines of credit | (25,000,000 | ) | — | |||||
|
|
|
| |||||
Net cash used in financing activities | (34,216,649 | ) | (8,556,831 | ) | ||||
|
|
|
| |||||
Net increase in cash | 2,674,299 | 17,425,221 | ||||||
Cash at beginning of period | 52,594,461 | 37,833,435 | ||||||
|
|
|
| |||||
Cash at end of period | $ | 55,268,760 | $ | 55,258,656 | ||||
|
|
|
| |||||
Cash paid during period - Interest | $ | 321,585 | $ | 937,470 | ||||
Net cash paid during period - Taxes | $ | 2,200,000 | $ | — |
Nine Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 38,246,897 | $ | 32,997,997 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, amortization and other non-cash items | 5,115,850 | 4,299,566 | ||||||
Net investment losses (gains) | 940,488 | (19,294,229 | ) | |||||
Equity in earnings of Donegal Financial Services Corporation | — | (295,000 | ) | |||||
Changes in assets and liabilities: | ||||||||
Losses and loss expenses | 72,256,493 | 49,869,114 | ||||||
Unearned premiums | 48,083,628 | 21,508,606 | ||||||
Premiums receivable | (11,941,733 | ) | (17,047,509 | ) | ||||
Deferred acquisition costs | (2,269,695 | ) | (3,070,684 | ) | ||||
Deferred income taxes | (619,312 | ) | 210,518 | |||||
Reinsurance receivable | (36,843,000 | ) | (18,997,523 | ) | ||||
Prepaid reinsurance premiums | (31,916,191 | ) | (6,578,384 | ) | ||||
Accrued investment income | (1,557,230 | ) | (724,150 | ) | ||||
Due to affiliate | (3,613,903 | ) | (3,858,708 | ) | ||||
Reinsurance balances payable | 260,626 | (1,849,471 | ) | |||||
Current income taxes | (4,490,180 | ) | 3,266,422 | |||||
Accrued expenses | (3,869,386 | ) | 1,522,732 | |||||
Other, net | 678,760 | 6,479,153 | ||||||
Net adjustments | 30,215,215 | 15,440,453 | ||||||
Net cash provided by operating activities | 68,462,112 | 48,438,450 | ||||||
Cash Flows from Investing Activities: | ||||||||
Purchases of fixed maturities, held to maturity | (110,914,229 | ) | (69,297,759 | ) | ||||
Purchases of fixed maturities, available for sale | (143,743,351 | ) | (125,791,644 | ) | ||||
Purchases of equity securities, available for sale | (6,964,092 | ) | (19,055,851 | ) | ||||
Maturity of fixed maturities: | ||||||||
Held to maturity | 39,629,000 | 13,723,483 | ||||||
Available for sale | 120,857,543 | 88,459,874 | ||||||
Sales of fixed maturities, available for sale | 22,172,930 | 20,548,077 | ||||||
Sales of equity securities, available for sale | 5,985,211 | 37,968,114 | ||||||
Net purchases of property and equipment | (73,706 | ) | (147,005 | ) | ||||
Sale of investment in Donegal Financial Services Corporation | — | 33,922,773 | ||||||
Net ( purchases) sales of short-term investments | (6,655,716 | ) | 8,122,436 | |||||
Net cash used in investing activities | (79,706,410 | ) | (11,547,502 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Cash dividends paid | (12,605,480 | ) | (12,031,153 | ) | ||||
Issuance of common stock | 12,407,700 | 2,814,504 | ||||||
Borrowing under lines of credit | 50,000,000 | — | ||||||
Payments on lines of credit | — | (25,000,000 | ) | |||||
Net cash provided by (used in) financing activities | 49,802,220 | (34,216,649 | ) | |||||
Net increase in cash | 38,557,922 | 2,674,299 | ||||||
Cash at beginning of period | 49,318,930 | 52,594,461 | ||||||
Cash at end of period | $ | 87,876,852 | $ | 55,268,760 | ||||
Cash paid during period - Interest | $ | 928,474 | $ | 321,585 | ||||
Net cash paid during period - Taxes | $ | 10,800,000 | $ | 2,200,000 |
1 - Organization
1 - | Organization |
In July 2018, we consolidated the branch office operations of Peninsula into our home office operations to achieve economies of scale and enhance service levels for policyholders of Peninsula. We recorded a restructuring charge for employee termination costs associated with the Peninsula consolidation of approximately $1.9 million and paid approximately $1.5 million of these costs in 2018. We paid approximately $195,000 of these costs in the first nine months of 2019 and had an accrual of approximately $195,000 remaining at September 30, 2019. We entered into a definitive purchase agreement for the sale of Peninsula’s branch office in 2018. The sale was completed in January 2019, and we received net proceeds of $1.2 million. We recorded an impairment charge of $1.1 million in other expenses in 2018 related to this real estate transaction and included the $1.2 million fair value of the real estate we held for sale in other assets at December 31, 2018.
Northwest that included a combination of cash in the amount of $20.5 million and Northwest common stock with a fair value at the closing date of $20.9 million. We recorded a gain of $12.7 million from the sale of DFSC in our results of operations for the first quarter of 2019. We sold the Northwest common stock that we received as part of the consideration during the first quarter of 2019. This transaction represented the culmination of a banking strategy that began with the formation of DFSC in 2000.
2 - Basis2020.
2 - | Basis of Presentation |
2020.
3 - Earnings Per Share
2019.
3 - | Earnings Per Share |
undistributed earnings using a participation percentage that reflects the dividend rights of each class. The table below presents for the periods indicated a reconciliation of the numerators and denominators we used to compute basic and diluted net income per share for our Class A common stock and our Class B common stock:
Three Months Ended September 30, | ||||||||||||||||
2019 | 2018 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Basic earnings per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 4,269 | $ | 917 | $ | 1,006 | $ | 200 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 23,015 | 5,577 | 22,717 | 5,577 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Basic earnings per share | $ | 0.19 | $ | 0.16 | $ | 0.04 | $ | 0.04 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Diluted earnings per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 4,269 | $ | 917 | $ | 1,006 | $ | 200 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Denominator: | ||||||||||||||||
Number of shares used in basic computation | 23,015 | 5,577 | 22,717 | 5,577 | ||||||||||||
Weighted-average shares effect of dilutive securities: | ||||||||||||||||
Director and employee stock options | 277 | — | 178 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Number of shares used in diluted computation | 23,292 | 5,577 | 22,895 | 5,577 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Diluted earnings per share | $ | 0.18 | $ | 0.16 | $ | 0.04 | $ | 0.04 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Nine Months Ended September 30, | ||||||||||||||||
2019 | 2018 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss) | $ | 27,065 | $ | 5,933 | $ | (14,472 | ) | $ | (3,290 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 22,933 | 5,577 | 22,673 | 5,577 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Basic earnings (loss) per share | $ | 1.18 | $ | 1.06 | $ | (0.64 | ) | $ | (0.59 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Diluted earnings (loss) per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss) | $ | 27,065 | $ | 5,933 | $ | (14,472 | ) | $ | (3,290 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Denominator: | ||||||||||||||||
Number of shares used in basic computation | 22,933 | 5,577 | 22,673 | 5,577 | ||||||||||||
Weighted-average shares effect of dilutive securities: | ||||||||||||||||
Director and employee stock options | 183 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Number of shares used in diluted computation | 23,116 | 5,577 | 22,673 | 5,577 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Diluted earnings (loss) per share | $ | 1.17 | $ | 1.06 | $ | (0.64 | ) | $ | (0.59 | ) | ||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30, | ||||||||||||||||
2020 | 2019 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Basic earnings per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 9,768 | $ | 2,069 | $ | 4,269 | $ | 917 | ||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 23,767 | 5,577 | 23,015 | 5,577 | ||||||||||||
Basic earnings per share | $ | 0.41 | $ | 0.37 | $ | 0.19 | $ | 0.16 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 9,768 | $ | 2,069 | $ | 4,269 | $ | 917 | ||||||||
Denominator: | ||||||||||||||||
Number of shares used in basic computation | 23,767 | 5,577 | 23,015 | 5,577 | ||||||||||||
Weighted-average shares effect of dilutive securities: | ||||||||||||||||
Director and employee stock options | 170 | — | 277 | — | ||||||||||||
Number of shares used in diluted computation | 23,937 | 5,577 | 23,292 | 5,577 | ||||||||||||
Diluted earnings per share | $ | 0.41 | $ | 0.37 | $ | 0.18 | $ | 0.16 | ||||||||
Nine Months Ended September 30, | ||||||||||||||||
2020 | 2019 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Basic earnings per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 31,495 | $ | 6,752 | $ | 27,065 | $ | 5,933 | ||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 23,494 | 5,577 | 22,933 | 5,577 | ||||||||||||
Basic earnings per share | $ | 1.34 | $ | 1.21 | $ | 1.18 | $ | 1.06 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 31,495 | $ | 6,752 | $ | 27,065 | $ | 5,933 | ||||||||
Denominator: | ||||||||||||||||
Number of shares used in basic computation | 23,494 | 5,577 | 22,933 | 5,577 | ||||||||||||
Weighted-average shares effect of dilutive securities: | ||||||||||||||||
Director and employee stock options | 185 | — | 183 | — | ||||||||||||
Number of shares used in diluted computation | 23,679 | 5,577 | 23,116 | 5,577 | ||||||||||||
Diluted earnings per share | $ | 1.33 | $ | 1.21 | $ | 1.17 | $ | 1.06 | ||||||||
We did not include outstanding options to purchase 6,731,481 shares of Class A common stock in our computation of diluted earnings per share for the three months ended September 30, 2018 because the exercise price of the options exceeded the average market price of our Class A common stock during the period. We did not include any effect of dilutive securities in the computation of diluted earnings per share for the nine months ended September 30, 2018 because we sustained a net loss for this period.
4 - Reinsurance
applicable periods.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Number of options to purchase Class A shares excluded | 6,180,592 | 5,330,525 | 6,180,592 | 5,531,561 |
4 - | Reinsurance |
Donegal Mutual currently excludes from the pool its underwriting results in four Southwestern states in which Donegal Mutual markets its products together with its insurance subsidiaries as the Mountain States Insurance Group.
Our insurance subsidiaries and Donegal Mutual also purchase facultative reinsurance to cover exposures in excess of the covered limits of their third-party reinsurance agreements.
5 - Investments
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 | $ | 91,485 | $ | 2,336 | $ | 47 | $ | 93,774 | ||||||||
Obligations of states and political subdivisions | 181,575 | 15,124 | 86 | 196,613 | ||||||||||||
Corporate securities | 151,654 | 8,281 | 353 | 159,582 | ||||||||||||
Mortgage-backed securities | 34,175 | 623 | 25 | 34,773 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 458,889 | $ | 26,364 | $ | 511 | $ | 484,742 | ||||||||
|
|
|
|
|
|
|
|
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 | $ | 19,325 | $ | 128 | $ | 7 | $ | 19,446 | ||||||||
Obligations of states and political subdivisions | 57,178 | 1,990 | 3 | 59,165 | ||||||||||||
Corporate securities | 146,644 | 4,295 | 158 | 150,781 | ||||||||||||
Mortgage-backed securities | 327,645 | 2,902 | 838 | 329,709 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 550,792 | $ | 9,315 | $ | 1,006 | $ | 559,101 | ||||||||
|
|
|
|
|
|
|
|
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 | $ | 72,912 | $ | 4,427 | $ | 52 | $ | 77,287 | ||||||||
Obligations of states and political subdivisions | 282,207 | 20,786 | 323 | 302,670 | ||||||||||||
Corporate securities | 172,069 | 15,967 | 1,064 | 186,972 | ||||||||||||
Mortgage-backed securities | 25,794 | 1,348 | — | 27,142 | ||||||||||||
Totals | $ | 552,982 | $ | 42,528 | $ | 1,439 | $ | 594,071 | ||||||||
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 | $ | 47,832 | $ | 501 | $ | 26 | $ | 48,307 | ||||||||
Obligations of states and political subdivisions | 66,578 | 2,263 | 64 | 68,777 | ||||||||||||
Corporate securities | 210,684 | 9,555 | 394 | 219,845 | ||||||||||||
Mortgage-backed securities | 233,403 | 7,719 | 11 | 241,111 | ||||||||||||
Totals | $ | 558,497 | $ | 20,038 | $ | 495 | $ | 578,040 | ||||||||
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 | $ | 76,222 | $ | 175 | $ | 1,087 | $ | 75,310 | ||||||||
Obligations of states and political subdivisions | 159,292 | 8,237 | 704 | 166,825 | ||||||||||||
Corporate securities | 127,010 | 396 | 4,391 | 123,015 | ||||||||||||
Mortgage-backed securities | 40,274 | 64 | 450 | 39,888 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 402,798 | $ | 8,872 | $ | 6,632 | $ | 405,038 | ||||||||
|
|
|
|
|
|
|
| |||||||||
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 | $ | 45,188 | $ | 25 | $ | 1,003 | $ | 44,210 | ||||||||
Obligations of states and political subdivisions | 73,761 | 1,762 | 307 | 75,216 | ||||||||||||
Corporate securities | 140,689 | 203 | 3,059 | 137,833 | ||||||||||||
Mortgage-backed securities | 275,475 | 149 | 6,325 | 269,299 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 535,113 | $ | 2,139 | $ | 10,694 | $ | 526,558 | ||||||||
|
|
|
|
|
|
|
|
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 | $ | 82,916 | $ | 1,803 | $ | 69 | $ | 84,650 | ||||||||
Obligations of states and political subdivisions | 204,634 | 14,237 | 288 | 218,583 | ||||||||||||
Corporate securities | 156,398 | 8,275 | 333 | 164,340 | ||||||||||||
Mortgage-backed securities | 32,146 | 611 | 16 | 32,741 | ||||||||||||
Totals | $ | 476,094 | $ | 24,926 | $ | 706 | $ | 500,314 | ||||||||
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 | $ | 19,302 | $ | 82 | $ | 19 | $ | 19,365 | ||||||||
Obligations of states and political subdivisions | 55,162 | 1,641 | 7 | 56,796 | ||||||||||||
Corporate securities | 154,946 | 4,477 | 180 | 159,243 | ||||||||||||
Mortgage-backed securities | 327,429 | 2,857 | 738 | 329,548 | ||||||||||||
Totals | $ | 556,839 | $ | 9,057 | $ | 944 | $ | 564,952 | ||||||||
income.
Amortized Cost | Estimated Fair Value | |||||||
(in thousands) | ||||||||
Held to maturity | ||||||||
Due in one year or less | $ | 22,801 | $ | 22,881 | ||||
Due after one year through five years | 72,894 | 75,680 | ||||||
Due after five years through ten years | 179,648 | 189,376 | ||||||
Due after ten years | 149,371 | 162,032 | ||||||
Mortgage-backed securities | 34,175 | 34,773 | ||||||
|
|
|
| |||||
Total held to maturity | $ | 458,889 | $ | 484,742 | ||||
|
|
|
| |||||
Available for sale | ||||||||
Due in one year or less | $ | 16,975 | $ | 17,152 | ||||
Due after one year through five years | 90,226 | 92,564 | ||||||
Due after five years through ten years | 100,580 | 103,705 | ||||||
Due after ten years | 15,366 | 15,971 | ||||||
Mortgage-backed securities | 327,645 | 329,709 | ||||||
|
|
|
| |||||
Total available for sale | $ | 550,792 | $ | 559,101 | ||||
|
|
|
|
Amortized Cost | Estimated Fair Value | |||||||
(in thousands) | ||||||||
Held to maturity | ||||||||
Due in one year or less | $ | 23,089 | $ | 23,396 | ||||
Due after one year through five years | 86,376 | 92,539 | ||||||
Due after five years through ten years | 197,347 | 213,410 | ||||||
Due after ten years | 220,376 | 237,584 | ||||||
Mortgage-backed securities | 25,794 | 27,142 | ||||||
Total held to maturity | $ | 552,982 | $ | 594,071 | ||||
Available for sale | ||||||||
Due in one year or less | $ | 70,596 | $ | 70,923 | ||||
Due after one year through five years | 103,950 | 109,598 | ||||||
Due after five years through ten years | 123,256 | 128,472 | ||||||
Due after ten years | 27,292 | 27,936 | ||||||
Mortgage-backed securities | 233,403 | 241,111 | ||||||
Total available for sale | $ | 558,497 | $ | 578,040 | ||||
Cost | Gross Gains | Gross Losses | Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Equity securities | $ | 42,410 | $ | 13,875 | $ | 1,340 | $ | 54,945 |
Cost | Gross Gains | Gross Losses | Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Equity securities | $ | 43,407 | $ | 10,078 | $ | 1,386 | $ | 52,099 | ||||||||
The cost and estimated fair values of our equity securities at December 31, 2018 were as follows: |
| |||||||||||||||
Cost | Gross Gains | Gross Losses | Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Equity securities | $ | 40,943 | $ | 4,818 | $ | 2,094 | $ | 43,667 |
Cost | Gross Gains | Gross Losses | Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Equity securities | $ | 43,419 | $ | 12,180 | $ | 121 | $ | 55,478 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Gross investment gains: | ||||||||||||||||
Fixed maturities | $ | 107 | $ | 5 | $ | 479 | $ | 16 | ||||||||
Equity securities | 721 | 2,976 | 8,293 | 6,246 | ||||||||||||
Investment in affiliate | — | — | 12,662 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
828 | 2,981 | 21,434 | 6,262 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Gross investment losses: | ||||||||||||||||
Fixed maturities | 4 | 25 | 324 | 70 | ||||||||||||
Equity securities | 1,193 | (508 | ) | 1,816 | 2,130 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
1,197 | (483 | ) | 2,140 | 2,200 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net investment (losses) gains | $ | (369 | ) | $ | 3,464 | $ | 19,294 | $ | 4,062 | |||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Gross investment gains: | ||||||||||||||||
Fixed maturities | $ | 159 | $ | 107 | $ | 811 | $ | 479 | ||||||||
Equity securities | 3,131 | 721 | 5,617 | 8,293 | ||||||||||||
Investment in affiliate | — | — | — | 12,662 | ||||||||||||
3,290 | 828 | 6,428 | 21,434 | |||||||||||||
Gross investment losses: | ||||||||||||||||
Fixed maturities | 22 | 4 | 240 | 324 | ||||||||||||
Equity securities | — | 1,193 | 7,128 | 1,816 | ||||||||||||
22 | 1,197 | 7,368 | 2,140 | |||||||||||||
Net investment gains (losses) | $ | 3,268 | $ | (369 | ) | $ | (940 | ) | $ | 19,294 | ||||||
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 | $ | 3,466 | $ | 34 | $ | 6,429 | $ | 20 | ||||||||
Obligations of states and political subdivisions | 4,582 | 86 | 2,321 | 3 | ||||||||||||
Corporate securities | 14,152 | 179 | 25,113 | 332 | ||||||||||||
Mortgage-backed securities | 18,686 | 75 | 89,643 | 788 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 40,886 | $ | 374 | $ | 123,506 | $ | 1,143 | ||||||||
|
|
|
|
|
|
|
|
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 | $ | 19,920 | $ | 78 | $ | — | $ | — | ||||||||
Obligations of states and political subdivisions | 40,735 | 387 | — | — | ||||||||||||
Corporate securities | 51,899 | 695 | 5,744 | 763 | ||||||||||||
Mortgage-backed securities | 809 | 11 | 274 | — | ||||||||||||
Totals | $ | 113,363 | $ | 1,171 | $ | 6,018 | $ | 763 | ||||||||
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 | $ | 26,342 | $ | 166 | $ | 54,900 | $ | 1,924 | ||||||||
Obligations of states and political subdivisions | 28,322 | 477 | 21,560 | 534 | ||||||||||||
Corporate securities | 149,270 | 4,483 | 59,397 | 2,968 | ||||||||||||
Mortgage-backed securities | 82,594 | 913 | 181,379 | 5,862 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 286,528 | $ | 6,039 | $ | 317,236 | $ | 11,288 | ||||||||
|
|
|
|
|
|
|
|
Less Than 12 Months | More Than 12 Months | |||||||||||||||
Fair Value | Unrealized Losses | Fair | Unrealized Losses | |||||||||||||
(in thousands) | ||||||||||||||||
U.S. Treasury securities and obligations of U.S. government corporations and agencies | $ | 7,461 | $ | 46 | $ | 5,395 | $ | 42 | ||||||||
Obligations of states and political subdivisions | 23,339 | 293 | 2,327 | 2 | ||||||||||||
Corporate securities | 19,363 | 263 | 18,803 | 250 | ||||||||||||
Mortgage-backed securities | 28,507 | 56 | 74,089 | 698 | ||||||||||||
Totals | $ | 78,670 | $ | 658 | $ | 100,614 | $ | 992 | ||||||||
6 - Segment Information
6 - | Segment Information |
Three Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
Revenues: | ||||||||
Premiums earned: | ||||||||
Commercial lines | $ | 98,324 | $ | 84,251 | ||||
Personal lines | 91,497 | 103,410 | ||||||
|
|
|
| |||||
Premiums earned | 189,821 | 187,661 | ||||||
Net investment income | 7,390 | 6,620 | ||||||
Investment (losses) gains | (369 | ) | 3,464 | |||||
Equity in earnings of DFSC | — | 733 | ||||||
Other | 1,168 | 1,426 | ||||||
|
|
|
| |||||
Total revenues | $ | 198,010 | $ | 199,904 | ||||
|
|
|
| |||||
Income before income tax expense: | ||||||||
Underwriting income (loss): | ||||||||
Commercial lines | $ | 2,521 | $ | 2,125 | ||||
Personal lines | (3,312 | ) | (12,210 | ) | ||||
|
|
|
| |||||
SAP underwriting loss | (791 | ) | (10,085 | ) | ||||
GAAP adjustments | (399 | ) | 332 | |||||
|
|
|
| |||||
GAAP underwriting loss | (1,190 | ) | (9,753 | ) | ||||
Net investment income | 7,390 | 6,620 | ||||||
Investment (losses) gains | (369 | ) | 3,464 | |||||
Equity in earnings of DFSC | — | 733 | ||||||
Other | 474 | 213 | ||||||
|
|
|
| |||||
Income before income tax expense | $ | 6,305 | $ | 1,277 | ||||
|
|
|
|
Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
Revenues: | ||||||||
Premiums earned: | ||||||||
Commercial lines | $ | 284,593 | $ | 251,029 | ||||
Personal lines | 282,065 | 304,111 | ||||||
|
|
|
| |||||
Premiums earned | 566,658 | 555,140 | ||||||
Net investment income | 21,728 | 19,341 | ||||||
Investment gains | 19,294 | 4,062 | ||||||
Equity in earnings of DFSC | 295 | 2,153 | ||||||
Other | 3,538 | 4,326 | ||||||
|
|
|
| |||||
Total revenues | $ | 611,513 | $ | 585,022 | ||||
|
|
|
| |||||
Income (loss) before income tax expense (benefit): | ||||||||
Underwriting income (loss): | ||||||||
Commercial lines | $ | 4,946 | $ | (17,935 | ) | |||
Personal lines | (10,077 | ) | (42,358 | ) | ||||
|
|
|
| |||||
SAP underwriting loss | (5,131 | ) | (60,293 | ) | ||||
GAAP adjustments | 1,431 | 5,106 | ||||||
|
|
|
| |||||
GAAP underwriting loss | (3,700 | ) | (55,187 | ) | ||||
Net investment income | 21,728 | 19,341 | ||||||
Investment gains | 19,294 | 4,062 | ||||||
Equity in earnings of DFSC | 295 | 2,153 | ||||||
Other | 1,070 | 1,040 | ||||||
|
|
|
| |||||
Income (loss) before income tax expense (benefit) | $ | 38,687 | $ | (28,591 | ) | |||
|
|
|
|
7 - Borrowings
Three Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
(in thousands) | ||||||||
Revenues: | ||||||||
Premiums earned: | ||||||||
Commercial lines | $ | 103,436 | $ | 98,324 | ||||
Personal lines | 81,490 | 91,497 | ||||||
Premiums earned | 184,926 | 189,821 | ||||||
Net investment income | 7,403 | 7,390 | ||||||
Investment gains (losses) | 3,268 | (369 | ) | |||||
Other | 915 | 1,168 | ||||||
Total revenues | $ | 196,512 | $ | 198,010 | ||||
Income before income tax expense: | ||||||||
Underwriting income (loss): | ||||||||
Commercial lines | $ | (1,703 | ) | $ | 2,521 | |||
Personal lines | 6,427 | (3,312 | ) | |||||
SAP underwriting income (loss) | 4,724 | (791 | ) | |||||
GAAP adjustments | (1,576 | ) | (399 | ) | ||||
GAAP underwriting income (loss) | 3,148 | (1,190 | ) | |||||
Net investment income | 7,403 | 7,390 | ||||||
Investment gains (losses) | 3,268 | (369 | ) | |||||
Other | 513 | 474 | ||||||
Income before income tax expense | $ | 14,332 | $ | 6,305 | ||||
Nine Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
(in thousands) | ||||||||
Revenues: | ||||||||
Premiums earned: | ||||||||
Commercial lines | $ | 307,080 | $ | 284,593 | ||||
Personal lines | 249,472 | 282,065 | ||||||
Premiums earned | 556,552 | 566,658 | ||||||
Net investment income | 21,952 | 21,728 | ||||||
Investment (losses) gains | (940 | ) | 19,294 | |||||
Equity in earnings of DFSC | — | 295 | ||||||
Other | 2,759 | 3,538 | ||||||
Total revenues | $ | 580,323 | $ | 611,513 | ||||
Income before income tax expense: | ||||||||
Underwriting income (loss): | ||||||||
Commercial lines | $ | 2,203 | $ | 4,946 | ||||
Personal lines | 19,528 | (10,077 | ) | |||||
SAP underwriting income (loss) | 21,731 | (5,131 | ) | |||||
GAAP adjustments | 1,186 | 1,431 | ||||||
GAAP underwriting income (loss) | 22,917 | (3,700 | ) | |||||
Net investment income | 21,952 | 21,728 | ||||||
Investment (losses) gains | (940 | ) | 19,294 | |||||
Equity in earnings of DFSC | — | 295 | ||||||
Other | 894 | 1,070 | ||||||
Income before income tax expense | $ | 44,823 | $ | 38,687 | ||||
7 - | Borrowings |
FHLB of Pittsburgh stock purchased and owned | $ | 1,639,200 | ||
Collateral pledged, at par (carrying value $37,535,059) | 37,635,763 | |||
Borrowing capacity currently available | 1,428,241 |
8 - Share–Based Compensation
8 - | Share–Based Compensation |
9 - Fair Value Measurements
9 - | Fair Value Measurements |
values based upon our investment personnel’s general knowledge of the market, their research findings related to unusual fluctuations in value and their comparison of such values to execution prices for similar securities. Our investment personnel regularly monitor the market, current trading ranges for similar securities and the pricing of specific investments. Our investment personnel review all pricing estimates that we receive from the pricing services against their expectations with respect to pricing based on fair market curves, security ratings, interest rates, security types and recent trading activity. Our investment personnel periodically review documentation with respect to the pricing services’ pricing methodology that they obtain to determine if the primary pricing sources, market inputs and pricing frequency for various security types are reasonable. At September 30, 2019,2020, we received two estimates per security from the pricing services, and we priced substantially all of our Level 1 and Level 2 investments using those prices. In our review of the estimates the pricing services provided at September 30, 2019,2020, we did not identify any material discrepancies, and we did not make any adjustments to the estimates the pricing services provided.
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 | $ | 19,446 | $ | — | $ | 19,446 | $ | — | ||||||||
Obligations of states and political subdivisions | 59,165 | — | 59,165 | — | ||||||||||||
Corporate securities | 150,781 | — | 150,781 | — | ||||||||||||
Mortgage-backed securities | 329,709 | — | 329,709 | — | ||||||||||||
Equity securities | 52,099 | 49,746 | 2,353 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investments in the fair value hierarchy | $ | 611,200 | $ | 49,746 | $ | 561,454 | $ | — | ||||||||
|
|
|
|
|
|
|
|
2020:
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 | $ | 48,307 | $ | 0 | $ | 48,307 | $ | 0 | ||||||||
Obligations of states and political subdivisions | 68,777 | 0 | 68,777 | 0 | ||||||||||||
Corporate securities | 219,845 | 0 | 219,845 | 0 | ||||||||||||
Mortgage-backed securities | 241,111 | 0 | 241,111 | 0 | ||||||||||||
Equity securities | 54,945 | 50,541 | 4,404 | 0 | ||||||||||||
Total investments in the fair value hierarchy | $ | 632,985 | $ | 50,541 | $ | 582,444 | $ | 0 | ||||||||
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 | $ | 44,210 | $ | — | $ | 44,210 | $ | — | ||||||||
Obligations of states and political subdivisions | 75,216 | — | 75,216 | — | ||||||||||||
Corporate securities | 137,833 | — | 137,833 | — | ||||||||||||
Mortgage-backed securities | 269,299 | — | 269,299 | — | ||||||||||||
Equity securities | 30,675 | 28,351 | 2,324 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investments in the fair value hierarchy | 557,233 | 28,351 | 528,882 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Investment measured at net asset value | 12,992 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 570,225 | $ | 28,351 | $ | 528,882 | $ | — | ||||||||
|
|
|
|
|
|
|
|
10 - Income Taxes
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 | $ | 19,364 | $ | — | $ | 19,364 | $ | — | ||||||||
Obligations of states and political subdivisions | 56,796 | — | 56,796 | — | ||||||||||||
Corporate securities | 159,243 | — | 159,243 | — | ||||||||||||
Mortgage-backed securities | 329,548 | — | 329,548 | — | ||||||||||||
Equity securities | 55,478 | 53,124 | 2,354 | — | ||||||||||||
Totals | $ | 620,429 | $ | 53,124 | $ | 567,305 | $ | — | ||||||||
10 - | Income Taxes |
Our deferred tax assets include a net operating loss carryforward of $1.2 million related to Le Mars, which will begin to expire in 2020 if not previously utilized. This carryforward is subject to an annual limitation of approximately $376,000.
11 - Liability for Losses and Loss Expenses
11 - | Liability for Losses and Loss Expenses |
Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
Balance at January 1 | $ | 814,665 | $ | 676,672 | ||||
Less reinsurance recoverable | (339,267 | ) | (293,271 | ) | ||||
|
|
|
| |||||
Net balance at January 1 | 475,398 | 383,401 | ||||||
|
|
|
| |||||
Incurred related to: | ||||||||
Current year | 393,301 | 404,150 | ||||||
Prior years | (7,940 | ) | 28,913 | |||||
|
|
|
| |||||
Total incurred | 385,361 | 433,063 | ||||||
|
|
|
| |||||
Paid related to: | ||||||||
Current year | 197,234 | 214,825 | ||||||
Prior years | 157,691 | 140,806 | ||||||
|
|
|
| |||||
Total paid | 354,925 | 355,631 | ||||||
|
|
|
| |||||
Net balance at end of period | 505,834 | 460,833 | ||||||
Plus reinsurance recoverable | 358,700 | 319,147 | ||||||
|
|
|
| |||||
Balance at end of period | $ | 864,534 | $ | 779,980 | ||||
|
|
|
|
Nine Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
(in thousands) | ||||||||
Balance at January 1 | $ | 869,674 | $ | 814,665 | ||||
Less reinsurance recoverable | (362,768 | ) | (339,267 | ) | ||||
Net balance at January 1 | 506,906 | 475,398 | ||||||
Incurred related to: | ||||||||
Current year | 353,798 | 393,301 | ||||||
Prior years | (10,321 | ) | (7,940 | ) | ||||
Total incurred | 343,477 | 385,361 | ||||||
Paid related to: | ||||||||
Current year | 169,610 | 197,234 | ||||||
Prior years | 139,024 | 157,691 | ||||||
Total paid | 308,634 | 354,925 | ||||||
Net balance at end of period | 541,749 | 505,834 | ||||||
Plus reinsurance recoverable | 400,181 | 358,700 | ||||||
Balance at end of period | $ | 941,930 | $ | 864,534 | ||||
no significant offsetting changes in estimates that increased or decreased their loss and loss expense reserves in those years. The 2020 development represented 2.0% of the December 31, 2019 net carried reserves and resulted primarily from lower-than-expected severity in nearly all lines of business, with the exception of modest higher-than-expected severity in commercial automobile. The majority of the 2020 development related to decreases in the liability for losses and loss expenses of prior years for MICO and Atlantic States. The 2019 development represented 1.7% of the December 31, 2018 net carried reserves and resulted primarily from lower-than-expected severity in the workers’ compensation line of business. The majority of the 2019 development related to decreases in the liability for losses and loss expenses of prior years for Michigan. During the first quarter of 2018, our insurance subsidiaries received new information on previously-reported commercial automobile and personal automobile claims that led our insurance subsidiaries to conclude that their prior actuarial assumptions did not fully anticipate recent changes in severity and reporting trends. Our insurance subsidiaries have encountered increasing difficulties in projecting the ultimate severity of automobile losses over recent accident years, which our insurance subsidiaries attribute to worsening litigation trends and an increased delay in the reporting to our insurance subsidiaries of information with respect to the severity of claims. As a result, our insurance subsidiaries’ actuaries increased their projections of the ultimate cost of our insurance subsidiaries’ prior-year personal automobile and commercial automobile losses, and our insurance subsidiaries added $13.0 million to their reserves for personal automobile and $19.1 million to their reserves for commercial automobile for accident years prior to 2018 at September 30, 2018. The 2018 development represented 7.5% of the December 31, 2017 net carried reserves and resulted primarily from higher-than-expected severity in the personal automobile and commercial automobile lines of business, offset by lower-than-expected severity in the workers’ compensation line of business, in accident years prior to 2018. The majority of the 2018 development related to increases in the liability for losses and loss expenses of prior years for Atlantic States and Southern.
MICO.
2020.
12 - Impact
12 - | Impact of New Accounting Standards |
In June 2016, the FASB issued guidance that amends previous guidance on the impairment of financial instruments by adding an impairment model that requires an entity to recognize expected credit losses as an allowance rather than impairments as credit losses are incurred. The intent of this guidance is to reduce complexity and result in a more timely recognition of expected credit losses. The guidance is effective for annual and interim reporting periods beginning after December 15, 2019. We are in the process of evaluating the impact of the adoption of this guidance on our financial position, results of operations and cash flows.
13 - | Risks and Uncertainties |
2019.
Our insurance subsidiaries maintain liabilities for the payment of losses and loss expenses with respect to both reported and unreported claims. Our insurance subsidiaries establish these liabilities for the purpose of covering the ultimate costs of settling all losses, including investigation and litigation costs. Our insurance subsidiaries base the amount of their liability for reported losses primarily upon a
claims incurred and the number of claims outstanding at period ends relative to their premium base in recent years across most
of their lines of business. However, the amount of the average claim outstanding has increased gradually over the past several
years due to various factors such as rising medical loss costs and increased litigation trends. We have also experienced a general slowing of settlement rates in litigated claims. Our insurance subsidiaries could have to make further adjustments to their estimates in the future. However, on the basis of our insurance subsidiaries’ internal procedures, which analyze, among other things, their prior assumptions, their experience with similar cases and historical trends such as reserving patterns, loss
payments, pending levels of unpaid claims and product mix, as well as court decisions, economic conditions and public
attitudes, we believe that our insurance subsidiaries have made adequate provision for their liability for losses and loss
expenses.
company shares the underwriting results according to each company’s participation percentage, each company realizes its
percentage share of the underwriting results of the pool.
September 30, 2019 | December 31, 2018 | |||||||
(in thousands) | ||||||||
Commercial lines: | ||||||||
Automobile | $ | 120,902 | $ | 106,734 | ||||
Workers’ compensation | 112,322 | 109,512 | ||||||
Commercial multi-peril | 97,587 | 85,937 | ||||||
Other | 9,398 | 5,207 | ||||||
|
|
|
| |||||
Total commercial lines | 340,209 | 307,390 | ||||||
|
|
|
| |||||
Personal lines: | ||||||||
Automobile | 137,897 | 144,788 | ||||||
Homeowners | 22,886 | 18,374 | ||||||
Other | 4,842 | 4,846 | ||||||
|
|
|
| |||||
Total personal lines | 165,625 | 168,008 | ||||||
|
|
|
| |||||
Total commercial and personal lines | 505,834 | 475,398 | ||||||
Plus reinsurance recoverable | 358,700 | 339,267 | ||||||
|
|
|
| |||||
Total liability for unpaid losses and loss expenses | $ | 864,534 | $ | 814,665 | ||||
|
|
|
|
September 30, 2020 | December 31, 2019 | |||||||
(in thousands) | ||||||||
Commercial lines: | ||||||||
Automobile | $ | 143,055 | $ | 126,224 | ||||
Workers’ compensation | 117,583 | 109,060 | ||||||
Commercial multi-peril | 116,498 | 102,424 | ||||||
Other | 13,279 | 9,115 | ||||||
Total commercial lines | 390,415 | 346,823 | ||||||
Personal lines: | ||||||||
Automobile | 124,976 | 132,191 | ||||||
Homeowners | 20,074 | 23,494 | ||||||
Other | 6,284 | 4,398 | ||||||
Total personal lines | 151,334 | 160,083 | ||||||
Total commercial and personal lines | 541,749 | 506,906 | ||||||
Plus reinsurance recoverable | 400,181 | 362,768 | ||||||
Total liability for unpaid losses and loss expenses | $ | 941,930 | $ | 869,674 | ||||
most likely scenario. The following table sets forth the estimated effect on our insurance subsidiaries’ unpaid loss and loss expense reserves and our stockholders’ equity in the event of reasonably likely changes in the variables we considered in establishing the loss and loss expense reserves of our insurance subsidiaries:
Percentage Change in Loss and Loss Expense Reserves Net of Reinsurance | Adjusted Loss and Loss Expense Reserves Net of Reinsurance at September 30, 2019 | Percentage Change in Stockholders’ Equity at September 30, 2019(1) | Adjusted Loss and Loss Expense Reserves Net of Reinsurance at December 31, 2018 | Percentage Change in Stockholders’ Equity at December 31, 2018(1) | ||||||||||||||
(dollars in thousands) | ||||||||||||||||||
(10.0 | )% | $ | 455,251 | 9.0 | % | $ | 427,858 | 9.4 | % | |||||||||
(7.5 | ) | 467,896 | 6.8 | 439,743 | 7.1 | |||||||||||||
(5.0 | ) | 480,542 | 4.5 | 451,628 | 4.7 | |||||||||||||
(2.5 | ) | 493,188 | 2.3 | 463,513 | 2.4 | |||||||||||||
Base | 505,834 | — | 475,398 | — | ||||||||||||||
2.5 | 518,480 | (2.3 | ) | 487,283 | (2.4 | ) | ||||||||||||
5.0 | 531,126 | (4.5 | ) | 499,168 | (4.7 | ) | ||||||||||||
7.5 | 543,772 | (6.8 | ) | 511,053 | (7.1 | ) | ||||||||||||
10.0 | 556,417 | (9.0 | ) | 522,938 | (9.4 | ) |
Percentage Change in Loss and Loss Expense Reserves Net of Reinsurance | Adjusted Loss and Loss Expense Reserves Net of Reinsurance at September 30, 2020 | Percentage Change in Stockholders’ Equity at September 30, 2020(1) | Adjusted Loss and Loss Expense Reserves Net of Reinsurance at December 31, 2019 | Percentage Change in Stockholders’ Equity at December 31, 2019(1) | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
(10.0)% | $ | 487,574 | 8.5 | % | $ | 456,215 | 8.9 | % | ||||||||||||
(7.5) | 501,118 | 6.4 | 468,888 | 6.7 | ||||||||||||||||
(5.0) | 514,662 | 4.2 | 481,561 | 4.4 | ||||||||||||||||
(2.5) | 528,205 | 2.1 | 494,233 | 2.2 | ||||||||||||||||
Base | 541,749 | — | 506,906 | — | ||||||||||||||||
2.5 | 555,293 | (2.1 | ) | 519,579 | (2.2 | ) | ||||||||||||||
5.0 | 568,836 | (4.2 | ) | 532,251 | (4.4 | ) | ||||||||||||||
7.5 | 582,380 | (6.4 | ) | 544,924 | (6.7 | ) | ||||||||||||||
10.0 | 595,924 | (8.5) | 557,597 | (8.9) |
(1) | Net of income tax effect. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net premiums earned | $ | 189,821 | $ | 187,662 | $ | 566,658 | $ | 555,140 | ||||||||
Change in net unearned premiums | (5,951 | ) | (3,144 | ) | 14,930 | 20,583 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net premiums written | $ | 183,870 | $ | 184,518 | $ | 581,588 | $ | 575,723 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(in thousands) | ||||||||||||||||
Net premiums earned | $ | 184,926 | $ | 189,821 | $ | 556,552 | $ | 566,658 | ||||||||
Change in net unearned premiums | (4,146 | ) | (5,951 | ) | 16,168 | 14,930 | ||||||||||
Net premiums written | $ | 180,780 | $ | 183,870 | $ | 572,720 | $ | 581,588 | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
GAAP Combined Ratios (Total Lines) | ||||||||||||||||
Loss ratio(non-weather) | 61.6 | % | 63.7 | % | 60.8 | % | 68.5 | % | ||||||||
Loss ratio (weather-related) | 7.3 | 11.3 | 7.2 | 9.5 | ||||||||||||
Expense ratio | 30.5 | 29.6 | 31.5 | 31.3 | ||||||||||||
Dividend ratio | 1.2 | 0.6 | 1.2 | 0.6 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Combined ratio | 100.6 | % | 105.2 | % | 100.7 | % | 109.9 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Statutory Combined Ratios | ||||||||||||||||
Commercial lines: | ||||||||||||||||
Automobile | 113.9 | % | 114.6 | % | 114.3 | % | 133.7 | % | ||||||||
Workers’ compensation | 85.4 | 83.6 | 82.0 | 86.6 | ||||||||||||
Commercial multi-peril | 98.7 | 96.0 | 94.4 | 101.2 | ||||||||||||
Other | 76.6 | 94.2 | 79.3 | 64.9 | ||||||||||||
Total commercial lines | 97.9 | 97.6 | 95.8 | 104.5 | ||||||||||||
Personal lines: | ||||||||||||||||
Automobile | 103.3 | 115.8 | 103.9 | 114.5 | ||||||||||||
Homeowners | 109.4 | 110.3 | 106.0 | 112.0 | ||||||||||||
Other | 73.6 | 63.5 | 77.7 | 94.9 | ||||||||||||
Total personal lines | 103.9 | 111.5 | 103.3 | 113.0 | ||||||||||||
Total commercial and personal lines | 100.8 | 105.2 | 99.5 | 109.0 |
2019:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
GAAP Combined Ratios (Total Lines) | ||||||||||||||||
Loss ratio (non-weather) | 56.3 | % | 61.6 | % | 54.1 | % | 60.8 | % | ||||||||
Loss ratio (weather-related) | 9.1 | 7.3 | 7.6 | 7.2 | ||||||||||||
Expense ratio | 31.9 | 30.5 | 33.2 | 31.5 | ||||||||||||
Dividend ratio | 1.0 | 1.2 | 1.0 | 1.2 | ||||||||||||
Combined ratio | 98.3 | % | 100.6 | % | 95.9 | % | 100.7 | % | ||||||||
Statutory Combined Ratios | ||||||||||||||||
Commercial lines: | ||||||||||||||||
Automobile | 109.9 | % | 113.9 | % | 110.5 | % | 114.3 | % | ||||||||
Workers’ compensation | 86.8 | 85.4 | 85.9 | 82.0 | ||||||||||||
Commercial multi-peril | 109.2 | 98.7 | 98.1 | 94.4 | ||||||||||||
Other | 93.5 | 76.6 | 79.5 | 79.3 | ||||||||||||
Total commercial lines | 102.4 | 97.9 | 97.3 | 95.8 | ||||||||||||
Personal lines: | ||||||||||||||||
Automobile | 89.0 | 103.3 | 88.6 | 103.9 | ||||||||||||
Homeowners | 97.7 | 109.4 | 99.3 | 106.0 | ||||||||||||
Other | 84.0 | 73.6 | 76.5 | 77.7 | ||||||||||||
Total personal lines | 91.9 | 103.9 | 91.6 | 103.3 | ||||||||||||
Total commercial and personal lines | 97.7 | 100.8 | 94.7 | 99.5 |
2019
20192020 were $183.9$180.8 million, a decrease of $647,897,$3.1 million, or 0.4%$184.5$183.9 million of net premiums written for the third quarter of 2018.2019. Commercial lines net premiums written increased $11.0$4.1 million, or 13.2%4.3%, for the third quarter of 20192020 compared to the third quarter of 2018.2019. We attribute the increase in commercial lines net premiums written primarily to premium rate increases throughout 2018 and 2019, increased writings of new commercial accounts and lower reinsurance premiums.net premium rate increases. Personal lines net premiums written decreased $11.7$7.2 million, or 11.6%8.0%, for the third quarter of 20192020 compared to the third quarter of 2018.2019. We attribute the decrease in personal lines net premiums written primarily to net attrition as a result of underwriting measures our insurance subsidiaries have implemented to slow new policy growth and to increase pricing on renewal policies, as well as the previously announcednon-renewal of unprofitable personal lines business in seven states that began in February 2019,improve underwriting profitability, partially offset by the impact of premium rate increases our insurance subsidiaries have implemented over the past five quarters and lower reinsurance premiums.
implemented.
Net Investment (Losses) Gains. Netnet investment losses of $369,041 for the third quarter of 2019 were $369,041, compared to net investment gains of $3.5 million for the third quarter of 2018. The net investment losses for the third quarter of 2019 resulted primarily from unrealized losses within our equity securities portfolio.2019. The net investment gains for the third quarter of 20182020 resulted primarily from unrealized gains within our equity securities portfolio.portfolio at September 30, 2020. We did not recognize any impairment losses in our investment portfolio during the third quarter of 20192020 or 2018.
2019.
Policyholder Dividends. Our insurance subsidiaries pay policyholder dividends primarily on workers’ compensation policies on a sliding scale based on the profitability of a given policy. We attribute the2019. The increase in dividends incurred for the third quartertechnology systems-related expenses was primarily due to an increased allocation of 2019 compared costs from Donegal Mutual
our ongoing systems modernization project in February 2020.
2019.
20192020 was $5.2$11.8 million, or $.18per$.41on a diluted basis and $.16$.37 per share of Class B common stock, compared to $1.2$5.2 million, or $.04$.18 per diluted share of Class A common stock and $.04$.16 per share of Class B common stock, for the third quarter of 2018.2019. We had 23.024.1 million and 22.723.0 million Class A shares outstanding at September 30, 20192020 and 2018,2019, respectively. We had 5.6 million Class B shares outstanding at the end of both periods.
2019
2019.
implemented.
assets, offset partially by a decrease in the average investment yield.
2019.
2020 and 2019, respectively.
Policyholder Dividends. Our insurance subsidiaries pay policyholder dividends primarily on workers’ compensation policies on a sliding scale based on2020 for potential credit losses related to uncollectible premiums due to the profitabilityeffect of a given policy. We attribute the
our ongoing systems modernization project in February 2020.
20192020 was $1.3 million,$871,461, compared to $1.7$1.3 million for the first nine months of 2018.We2019.20192020 compared to the first nine months of 2018.
2019.
Total | Less than 1 year | 1-3 years | 4-5 years | After 5 years | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Net liability for unpaid losses and loss expenses of our insurance subsidiaries | $ | 505,834 | $ | 234,446 | $ | 237,036 | $ | 18,341 | $ | 16,011 | ||||||||||
Subordinated debentures | 5,000 | — | — | — | 5,000 | |||||||||||||||
Borrowings under lines of credit | 35,000 | — | — | 35,000 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total contractual obligations | $ | 545,834 | $ | 234,446 | $ | 237,036 | $ | 53,341 | $ | 21,011 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Total | Less than 1 year | 1-3 years | 4-5 years | After 5 years | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Net liability for unpaid losses and loss expenses of our insurance subsidiaries | $ | 541,749 | $ | 244,246 | $ | 255,615 | $ | 20,374 | $ | 21,514 | ||||||||||
Subordinated debentures | 5,000 | — | — | — | 5,000 | |||||||||||||||
Borrowings under lines of credit | 85,000 | 50,000 | — | 35,000 | — | |||||||||||||||
Total contractual obligations | $ | 631,749 | $ | 294,246 | $ | 255,615 | $ | 55,374 | $ | 26,514 | ||||||||||
2020.
There
There has been no change
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 July 1-31, 2020 | Class A – None Class B – None | Class A – None Class B – None | Class A – None Class B – None | |||||
Month #2 August 1-31, 2020 | Class A – 101,667 Class B – None | Class A – $14.87 Class B – None | Class A – 101,667 Class B – None | (1) | ||||
Month #3 September 1-30, 2020 | Class A – 180,000 Class B – None | Class A – $14.79 Class B – None | Class A – 180,000 Class B – None | (1) | ||||
Total | Class A – 281,667 Class B – None | Class A – $14.82 Class B – None | Class A – 281,667 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 | Certification of Chief Executive Officer | |
Exhibit 31.2 | Certification of Chief Financial Officer | |
Exhibit 32.1 | Statement of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 of Title 18 of the United States Code | |
Exhibit 32.2 | Statement of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 of Title 18 of the United States Code | |
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. | ||||||
November | By: | /s/ Kevin G. Burke | ||||
Kevin G. Burke, President and Chief Executive Officer |
November | By: | /s/ Jeffrey D. Miller | ||||
Jeffrey D. Miller, Executive Vice President | ||||||
and Chief Financial Officer |
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