Donegal Group Inc. (DGICB, Financial) filed Quarterly Report for the period ended 2009-03-31.
Donegal Group Inc. is an insurance holding company which is headquartered in Pennsylvania and engages through its subsidiaries in the property and casualty insurance business in mid-Atlantic and southeastern states. DGI and its subsidiaries and the Mutual Company underwrite a broad line of personal and commercial coverages consisting of private passenger and commercial automobile homeowners commercial multi-peril workers' compensation and other lines of insurance. Donegal Group Inc. has a market cap of $82.82 million; its shares were traded at around $14.95 with a P/E ratio of 18.33 and P/S ratio of 0.22. The dividend yield of Donegal Group Inc. stocks is 2.69%. Donegal Group Inc. had an annual average earning growth of 11.5% over the past 5 years.
Investment Income. For the three months ended March 31, 2009, our net investment income decreased slightly to $5.4 million, compared to $5.7 million for the comparable period one year ago. An increase in our average invested assets from $618.2 million in the first quarter of 2008 to $635.9 million in the first quarter of 2009 was offset by a decrease in our annualized average return to 3.4% in 2009, compared to 3.7% in 2008. The decrease in our annualized average rate of return on investments was
Interest Expense. Interest expense for the first quarter of 2009 was $1,204,778 compared to $612,476 for the first quarter of 2008. The higher interest expense in the 2009 period reflected approximately $974,000 related to interest and penalties on contested premium tax litigation, which was offset by a decrease in average interest rates on our subordinated debentures in the first quarter of 2009 compared to the comparable period in 2008.
Net Income and Earnings Per Share. Our net income for the first quarter of 2009 was $169,804, or $.01 per share of Class A common stock on a diluted basis and $.01 per share of Class B common stock, compared to net income of $6.6 million, or $.26 per share of Class A common stock on a diluted basis and $.24 per share of Class B common stock, reported for the first quarter of 2008. We had 19.9 million diluted Class A shares and 5.6 million Class B shares outstanding for both periods.
$2.3 million and $19.7 million, respectively. The net cash flows provided by operating activities in the first three months of 2008 included an $11.9 million transfer of cash from Donegal Mutual discussed in Note 4 Reinsurance.
On April 16, 2009, our board of directors declared quarterly cash dividends of 11.25 cents per share for our Class A common stock and 10.0 cents per share for our Class B common stock, payable May 15, 2009 to stockholders of record as of the close of business on May 1, 2009. These dividends represent percentage increases of 7.1% for our Class A common stock and 8.1% for our Class B common stock compared to the previous quarterly cash dividend. There are no regulatory restrictions on the payment of dividends to our stockholders, although there are state law restrictions on the payment of annual dividends greater than 10% of statutory surplus by our insurance subsidiaries to us. Our insurance subsidiaries are required by law to maintain certain minimum surplus on a statutory basis and require prior approval of the applicable domiciliary insurance regulatory authorities for dividends in excess of 10% of statutory surplus. Our insurance subsidiaries are subject to risk-based capital (RBC) requirements. At December 31, 2008, our insurance subsidiaries capital levels were each substantially above the applicable RBC requirements. At January 1, 2009, amounts available for distribution as dividends to us from our insurance subsidiaries without prior approval of their domiciliary insurance regulatory authorities were $18.4 million from Atlantic States, $1.6 million from Southern, $2.8 million from Le Mars, $3.9 million from Peninsula, and $0 from Sheboygan, all of which remained available at March 31, 2009.
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Donegal Group Inc. is an insurance holding company which is headquartered in Pennsylvania and engages through its subsidiaries in the property and casualty insurance business in mid-Atlantic and southeastern states. DGI and its subsidiaries and the Mutual Company underwrite a broad line of personal and commercial coverages consisting of private passenger and commercial automobile homeowners commercial multi-peril workers' compensation and other lines of insurance. Donegal Group Inc. has a market cap of $82.82 million; its shares were traded at around $14.95 with a P/E ratio of 18.33 and P/S ratio of 0.22. The dividend yield of Donegal Group Inc. stocks is 2.69%. Donegal Group Inc. had an annual average earning growth of 11.5% over the past 5 years.
Highlight of Business Operations:
Net Premiums Written. Net premiums written for the three months ended March 31, 2009 were $88.0 million, a decrease of $11.7 million, or 11.7%, from the $99.7 million of net premiums written for the comparable period in 2008. Net premiums written for the first quarter of 2008 included a $13.6 million transfer of unearned premiums related to a change in the pooling agreement between Atlantic States and Donegal Mutual effective March 1, 2008. Excluding the effect of the unearned premiums transfer, personal lines net premiums written increased $4.8 million, or 9.1%, in the first quarter of 2009 compared to the comparable period in 2008. Commercial lines net premiums written decreased $2.8 million, or 8.4%, in the first quarter of 2009 compared to the comparable period in 2008.Investment Income. For the three months ended March 31, 2009, our net investment income decreased slightly to $5.4 million, compared to $5.7 million for the comparable period one year ago. An increase in our average invested assets from $618.2 million in the first quarter of 2008 to $635.9 million in the first quarter of 2009 was offset by a decrease in our annualized average return to 3.4% in 2009, compared to 3.7% in 2008. The decrease in our annualized average rate of return on investments was
Interest Expense. Interest expense for the first quarter of 2009 was $1,204,778 compared to $612,476 for the first quarter of 2008. The higher interest expense in the 2009 period reflected approximately $974,000 related to interest and penalties on contested premium tax litigation, which was offset by a decrease in average interest rates on our subordinated debentures in the first quarter of 2009 compared to the comparable period in 2008.
Net Income and Earnings Per Share. Our net income for the first quarter of 2009 was $169,804, or $.01 per share of Class A common stock on a diluted basis and $.01 per share of Class B common stock, compared to net income of $6.6 million, or $.26 per share of Class A common stock on a diluted basis and $.24 per share of Class B common stock, reported for the first quarter of 2008. We had 19.9 million diluted Class A shares and 5.6 million Class B shares outstanding for both periods.
$2.3 million and $19.7 million, respectively. The net cash flows provided by operating activities in the first three months of 2008 included an $11.9 million transfer of cash from Donegal Mutual discussed in Note 4 Reinsurance.
On April 16, 2009, our board of directors declared quarterly cash dividends of 11.25 cents per share for our Class A common stock and 10.0 cents per share for our Class B common stock, payable May 15, 2009 to stockholders of record as of the close of business on May 1, 2009. These dividends represent percentage increases of 7.1% for our Class A common stock and 8.1% for our Class B common stock compared to the previous quarterly cash dividend. There are no regulatory restrictions on the payment of dividends to our stockholders, although there are state law restrictions on the payment of annual dividends greater than 10% of statutory surplus by our insurance subsidiaries to us. Our insurance subsidiaries are required by law to maintain certain minimum surplus on a statutory basis and require prior approval of the applicable domiciliary insurance regulatory authorities for dividends in excess of 10% of statutory surplus. Our insurance subsidiaries are subject to risk-based capital (RBC) requirements. At December 31, 2008, our insurance subsidiaries capital levels were each substantially above the applicable RBC requirements. At January 1, 2009, amounts available for distribution as dividends to us from our insurance subsidiaries without prior approval of their domiciliary insurance regulatory authorities were $18.4 million from Atlantic States, $1.6 million from Southern, $2.8 million from Le Mars, $3.9 million from Peninsula, and $0 from Sheboygan, all of which remained available at March 31, 2009.
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