Donegal Group Inc. (DGICB, Financial) filed Quarterly Report for the period ended 2010-03-31.
Donegal Group Inc. has a market cap of $352.9 million; its shares were traded at around $17.81 with a P/E ratio of 23.6 and P/S ratio of 0.9. The dividend yield of Donegal Group Inc. stocks is 2.4%. Donegal Group Inc. had an annual average earning growth of 22.3% over the past 10 years.
Net Premiums Earned. Net premiums earned were $91.4 million, an increase of $3.1 million, or 3.5%, compared to $88.3 million for the first quarter of 2009. Our insurance subsidiaries earn premiums and recognize them as revenue over the terms of their policies, which are one year or less in duration. Therefore, increases or decreases in net premiums earned generally reflect increases or decreases in net premiums written in the preceding twelve-month period compared to the comparable period one year earlier.
Investment Income. For the three months ended March 31, 2010, our net investment income decreased to $4.9 million, compared to $5.4 million for the comparable period one year ago. An increase in our average invested assets from $635.9 million for the first quarter of 2009 to $662.3 million for the first quarter of 2010 was offset by a decrease in our annualized average rate of return to 3.0% in 2010, compared to 3.4% in 2009. Our annualized average rate of return on investments decreased primarily due to increased holdings of lower-yielding tax-exempt municipal bonds and short-term U.S. Treasury securities during the first quarter of 2010.
Interest Expense. Interest expense for the first quarter of 2010 was $184,758, compared to $1,204,778 for the first quarter of 2009. The lower interest expense in the 2010 period reflected a decrease in average interest rates on our subordinated debentures for the first quarter of 2010 compared to the comparable period in 2009. Interest expense for the first quarter of 2009 included $974,000 related to interest and penalties on contested premium tax litigation paid during that period.
Net Income and Earnings Per Share. Our net income for the first quarter of 2010 was $234,758, or $.01 per share of Class A common stock and Class B common stock, compared to net income of $169,804, or $.01 per share of Class A common stock and Class B common stock, reported for the first quarter of 2009. We had 19.9 million Class A shares outstanding for both periods. We had 5.6 million Class B shares outstanding for both periods.
On April 15, 2010, our board of directors declared quarterly cash dividends of 11.5 cents per share for our Class A common stock and 10.25 cents per share for our Class B common stock, payable May 17, 2010 to stockholders of record as of the close of business on May 3, 2010. There are no regulatory restrictions on our 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, 2009, our insurance subsidiaries capital levels were each substantially above the applicable RBC requirements. At January 1, 2010, amounts available for distribution as dividends to us from our insurance subsidiaries without prior approval of their domiciliary insurance regulatory authorities were $19.0 million from Atlantic States, $0 from Southern, $2.8 million from Le Mars, $3.9 million from Peninsula, and $584,431 from Sheboygan, all of which remained available at March 31, 2010.
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Donegal Group Inc. has a market cap of $352.9 million; its shares were traded at around $17.81 with a P/E ratio of 23.6 and P/S ratio of 0.9. The dividend yield of Donegal Group Inc. stocks is 2.4%. Donegal Group Inc. had an annual average earning growth of 22.3% over the past 10 years.
Highlight of Business Operations:
Net Premiums Written. Net premiums written for the three months ended March 31, 2010 were $92.9 million, an increase of $4.9 million, or 5.6%, from the $88.0 million of net premiums written for the comparable period in 2009. Personal lines net premiums written increased $3.7 million, or 6.4%, for the first quarter of 2010 compared to the comparable period in 2009. The increase was attributable to additional personal lines premiums received from the pooling agreement as a result of Donegal Mutuals affiliation with Southern Mutual as well as increased writings in our personal automobile and homeowners lines of business. Commercial lines net premiums written increased $1.3 million, or 4.2%, for the first quarter of 2010 compared to the comparable period in 2009 due to increased writings in our commercial automobile and workers compensation lines of business.Net Premiums Earned. Net premiums earned were $91.4 million, an increase of $3.1 million, or 3.5%, compared to $88.3 million for the first quarter of 2009. Our insurance subsidiaries earn premiums and recognize them as revenue over the terms of their policies, which are one year or less in duration. Therefore, increases or decreases in net premiums earned generally reflect increases or decreases in net premiums written in the preceding twelve-month period compared to the comparable period one year earlier.
Investment Income. For the three months ended March 31, 2010, our net investment income decreased to $4.9 million, compared to $5.4 million for the comparable period one year ago. An increase in our average invested assets from $635.9 million for the first quarter of 2009 to $662.3 million for the first quarter of 2010 was offset by a decrease in our annualized average rate of return to 3.0% in 2010, compared to 3.4% in 2009. Our annualized average rate of return on investments decreased primarily due to increased holdings of lower-yielding tax-exempt municipal bonds and short-term U.S. Treasury securities during the first quarter of 2010.
Interest Expense. Interest expense for the first quarter of 2010 was $184,758, compared to $1,204,778 for the first quarter of 2009. The lower interest expense in the 2010 period reflected a decrease in average interest rates on our subordinated debentures for the first quarter of 2010 compared to the comparable period in 2009. Interest expense for the first quarter of 2009 included $974,000 related to interest and penalties on contested premium tax litigation paid during that period.
Net Income and Earnings Per Share. Our net income for the first quarter of 2010 was $234,758, or $.01 per share of Class A common stock and Class B common stock, compared to net income of $169,804, or $.01 per share of Class A common stock and Class B common stock, reported for the first quarter of 2009. We had 19.9 million Class A shares outstanding for both periods. We had 5.6 million Class B shares outstanding for both periods.
On April 15, 2010, our board of directors declared quarterly cash dividends of 11.5 cents per share for our Class A common stock and 10.25 cents per share for our Class B common stock, payable May 17, 2010 to stockholders of record as of the close of business on May 3, 2010. There are no regulatory restrictions on our 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, 2009, our insurance subsidiaries capital levels were each substantially above the applicable RBC requirements. At January 1, 2010, amounts available for distribution as dividends to us from our insurance subsidiaries without prior approval of their domiciliary insurance regulatory authorities were $19.0 million from Atlantic States, $0 from Southern, $2.8 million from Le Mars, $3.9 million from Peninsula, and $584,431 from Sheboygan, all of which remained available at March 31, 2010.
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