Donegal Group Inc 10-Q for FY2025 Q2

Donegal Group Inc (DGICA)

10-Q 2025-08-05 For: 2025-06-30

Added on April 12, 2026

About this 10-Q

Donegal Group Inc filed this 10-Q on August 5, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).

Headline figures

Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $247.15M; up 0.2% from $246.77M a year earlier
Net income: $16.87M; up 306.1% from net income of $4.15M a year earlier

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Delaware		23-2424711
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

	Large accelerated filer ☐	Accelerated filer ☑	Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

Title of Each Class	Trading Symbols	Name of Each Exchange on Which Registered

Class A Common Stock, $.01 par value	DGICA	The NASDAQ Global Select Market

Class B Common Stock, $.01 par value	DGICB	The NASDAQ Global Select Market

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults upon Senior Securities	38
Item 4.	Mine Safety Disclosure	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		40

	June 30, 2025			December 31, 2024
	(Unaudited)
Assets
Investments
Fixed maturities
Held to maturity, at amortized cost (net of allowance for expected credit losses of $1,374,128 and $1,388,240)	$	737,355,529		$	705,713,916
Available for sale, at fair value		626,106,883			617,891,862
Equity securities, at fair value		41,007,179			36,807,810
Short-term investments, at cost, which approximates fair value		24,764,001			24,558,744
Total investments		1,429,233,592			1,384,972,332
Cash		57,437,086			52,925,931
Accrued investment income		10,593,428			10,361,959
Premiums receivable		198,884,822			181,106,519
Reinsurance receivable (net of allowance for expected credit losses of $331,927 and $391,432)		411,124,831			420,741,855
Deferred policy acquisition costs		76,620,204			73,346,967
Deferred tax asset, net		15,578,518			18,769,861
Prepaid reinsurance premiums		182,795,078			176,161,872
Property and equipment, net		2,403,728			2,479,183
Accounts receivable - securities		2,990,310			24,924
Federal income taxes recoverable		6,043,878			—
Due from affiliate		6,852,704			8,410,090
Goodwill		5,625,354			5,625,354
Other intangible assets		958,010			958,010
Other		693,543			147,126
Total assets	$	2,407,835,086		$	2,336,031,983
Liabilities and Stockholders’ Equity
Liabilities
Losses and loss expenses	$	1,117,009,698		$	1,120,985,050
Unearned premiums		635,538,097			612,476,068
Accrued expenses		2,732,926			2,916,705
Reinsurance balances payable		3,300,374			4,345,426
Borrowings under lines of credit		35,000,000			35,000,000
Cash dividends declared to stockholders		—			6,031,078
Federal income taxes payable		—			356,103
Other		8,584,546			8,145,422
Total liabilities		1,802,165,641			1,790,255,852
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 33,862,414 and 32,954,347 shares and outstanding 30,859,826 and 29,951,759 shares		338,625			329,544
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		383,546,316			369,679,946
Accumulated other comprehensive loss		(17,516,988	)		(28,200,481	)
Retained earnings		280,471,357			245,136,987
Treasury stock, at cost		(41,226,357	)		(41,226,357	)
Total stockholders’ equity		605,669,445			545,776,131
Total liabilities and stockholders’ equity	$	2,407,835,086		$	2,336,031,983

	Three Months Ended June 30,
	2025		2024
Revenues:
Net premiums earned	$	231,774,594	$	234,311,147
Investment income, net of investment expenses		12,540,362		11,068,499
Net investment gains (includes ($1,372,352) and $81,410 accumulated other comprehensive income reclassifications)		1,543,721		736,669
Lease income		76,281		77,504
Installment payment fees		844,315		578,727
Other income, net		368,744		—
Total revenues		247,148,017		246,772,546
Expenses:
Net losses and loss expenses		150,917,125		165,360,319
Amortization of deferred policy acquisition costs		39,501,000		40,656,000
Other underwriting expenses		35,149,888		34,037,409
Policyholder dividends		818,942		1,186,549
Interest		336,705		154,586
Other expenses, net		—		365,241
Total expenses		226,723,660		241,760,104
Income before income tax expense		20,424,357		5,012,442
Income tax expense (includes ($288,194) and $17,096 income tax (benefit) expense from reclassification items)		3,558,237		859,665
Net income	$	16,866,120	$	4,152,777
Net income per share:
Class A common stock - basic	$	0.47	$	0.13
Class A common stock - diluted	$	0.46	$	0.13
Class B common stock - basic and diluted	$	0.43	$	0.11

	Six Months Ended June 30,
	2025		2024
Revenues:
Net premiums earned	$	464,476,483	$	462,059,826
Investment income, net of investment expenses		24,523,936		22,040,826
Net investment gains (includes ($1,315,249) and $4,359 accumulated other comprehensive income reclassifications)		1,072,860		2,850,047
Lease income		153,108		159,327
Installment payment fees		1,726,510		803,389
Total revenues		491,952,897		487,913,415
Expenses:
Net losses and loss expenses		282,950,272		316,256,734
Amortization of deferred policy acquisition costs		78,732,000		80,258,000
Other underwriting expenses		76,344,882		75,777,277
Policyholder dividends		1,578,331		2,241,208
Interest		669,750		309,183
Other expenses, net		92,356		810,175
Total expenses		440,367,591		475,652,577
Income before income tax expense		51,585,306		12,260,838
Income tax expense (includes ($276,202) and $915 income tax (benefit) expense from reclassification items)		9,514,012		2,152,510
Net income	$	42,071,294	$	10,108,328
Net income per share:
Class A common stock - basic	$	1.19	$	0.31
Class A common stock - diluted	$	1.17	$	0.31
Class B common stock - basic and diluted	$	1.08	$	0.28

	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, 2024		32,954,347		5,649,240	$	329,544	$	56,492	$	369,679,946	$	(28,200,481	)	$	245,136,987		$	(41,226,357	)	$	545,776,131
Issuance of common stock (stock compensation plans)		36,500		—		365		—		444,142		—			—			—			444,507
Share-based compensation		438,380		—		4,384		—		6,571,130		—			—			—			6,575,514
Net income		—		—		—		—		—		—			25,205,174			—			25,205,174
Cash dividends declared		—		—		—		—		—		—			(6,556	)		—			(6,556	)
Grant of stock options		—		—		—		—		168,699		—			(168,699	)		—			—
Other comprehensive income		—		—		—		—		—		6,728,245			—			—			6,728,245
Balance, March 31, 2025		33,429,227		5,649,240	$	334,293	$	56,492	$	376,863,917	$	(21,472,236	)	$	270,166,906		$	(41,226,357	)	$	584,723,015
Issuance of common stock (stock compensation plans)		27,102		—		271		—		506,971		—			—			—			507,242
Share-based compensation		406,085		—		4,061		—		6,099,313		—			—			—			6,103,374
Net income		—		—		—		—		—		—			16,866,120			—			16,866,120
Cash dividends declared		—		—		—		—		—		—			(6,485,554	)		—			(6,485,554	)
Grant of stock options		—		—		—		—		76,115		—			(76,115	)		—			—
Other comprehensive income		—		—		—		—		—		3,955,248			—			—			3,955,248
Balance, June 30, 2025		33,862,414		5,649,240	$	338,625	$	56,492	$	383,546,316	$	(17,516,988	)	$	280,471,357		$	(41,226,357	)	$	605,669,445

	Carrying Value		Allowance for Credit Losses		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	$	86,159	$	51	$	86,210	$	62	$	6,192	$	80,080
Obligations of states and political subdivisions		392,737		307		393,044		982		52,087		341,939
Corporate securities		248,642		1,010		249,652		1,101		9,664		241,089
Mortgage-backed securities		9,818		6		9,824		36		215		9,645
Totals	$	737,356	$	1,374	$	738,730	$	2,181	$	68,158	$	672,753

	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	$	61,448	$	49	$	2,123	$	59,374
Obligations of states and political subdivisions		34,284		11		3,329		30,966
Corporate securities		196,089		703		4,841		191,951
Mortgage-backed securities		355,480		1,531		13,195		343,816
Totals	$	647,301	$	2,294	$	23,488	$	626,107

	Cost		Gross Gains		Gross Losses		Estimated Fair Value
	(in thousands)
Equity securities	$	27,238	$	13,820	$	51	$	41,007

	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	$	19,839	$	59	$	105,310	$	8,256
Obligations of states and political subdivisions		44,965		906		281,036		54,510
Corporate securities		33,245		431		278,611		14,074
Mortgage-backed securities		53,613		324		140,034		13,086
Totals	$	151,662	$	1,720	$	804,991	$	89,926

	Three Months Ended June 30, 2025
	Investments		Commercial Lines			Personal Lines		Total
	(in thousands)
Revenues:
Net premiums earned	$	—	$	138,527		$	93,248	$	231,775
Net investment income		12,540		—			—		12,540
Investment gains		1,544		—			—		1,544
Total segment revenues		14,084		138,527			93,248		245,859
Other									1,289
Total revenues								$	247,148
Segment expenses:
Net losses and loss expenses		—		91,518			59,990		151,508
Other underwriting expenses		—		49,982			24,918		74,900
Policyholder dividends		—		819			—		819
Total segment expenses		—		142,319			84,908		227,227
SAP underwriting (loss) income		—		(3,792	)		8,340		4,548
GAAP adjustments									840
GAAP underwriting income									5,388
Net investment income									12,540
Investment gains									1,544
Other									952
Income before income tax expense								$	20,424

	Three Months Ended June 30, 2024
	Investments		Commercial Lines			Personal Lines			Total
	(in thousands)
Revenues:
Net premiums earned	$	—	$	134,489		$	99,822		$	234,311
Net investment income		11,068		—			—			11,068
Investment gains		737		—			—			737
Total segment revenues		11,805		134,489			99,822			246,116
Other										657
Total revenues									$	246,773
Segment expenses:
Net losses and loss expenses		—		95,241			71,086			166,327
Other underwriting expenses		—		47,380			29,141			76,521
Policyholder dividends		—		1,187			—			1,187
Total segment expenses		—		143,808			100,227			244,035
SAP underwriting loss		—		(9,319	)		(405	)		(9,724	)
GAAP adjustments										2,795
GAAP underwriting loss										(6,929	)
Net investment income										11,068
Investment gains										737
Other										137
Income before income tax expense									$	5,013

	Six Months Ended June 30, 2025
	Investments		Commercial Lines			Personal Lines		Total
	(in thousands)
Revenues:
Net premiums earned	$	—	$	274,743		$	189,733	$	464,476
Net investment income		24,524		—			—		24,524
Investment gains		1,073		—			—		1,073
Total segment revenues		25,597		274,743			189,733		490,073
Other									1,880
Total revenues								$	491,953
Segment expenses:
Net losses and loss expenses		—		172,839			110,698		283,537
Other underwriting expenses		—		105,492			52,403		157,895
Policyholder dividends		—		1,578			—		1,578
Total segment expenses		—		279,909			163,101		443,010
SAP underwriting (loss) income		—		(5,166	)		26,632		21,466
GAAP adjustments									3,405
GAAP underwriting income									24,871
Net investment income									24,524
Investment gains									1,073
Other									1,117
Income before income tax expense								$	51,585

	Six Months Ended June 30,
	2025			2024
Cash Flows from Operating Activities:
Net income	$	42,071,294		$	10,108,328
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		1,932,514			1,897,738
Net investment gains		(1,072,860	)		(2,850,047	)
Changes in assets and liabilities:
Losses and loss expenses		(3,975,352	)		21,261,917
Unearned premiums		23,062,029			54,167,999
Premiums receivable		(17,778,303	)		(24,221,831	)
Deferred acquisition costs		(3,273,237	)		(5,883,078	)
Deferred income taxes		341,554			347,507
Reinsurance receivable		9,617,024			573,663
Prepaid reinsurance premiums		(6,633,206	)		(17,598,575	)
Accrued investment income		(231,469	)		(377,731	)
Due from affiliate		1,557,386			(7,912,158	)
Reinsurance balances payable		(1,045,052	)		(4,823,656	)
Current income taxes		(6,399,981	)		1,780,003
Accrued expenses		(183,779	)		(435,535	)
Other, net		(107,301	)		463,153
Net adjustments		(4,190,033	)		16,389,369
Net cash provided by operating activities		37,881,261			26,497,697
Cash Flows from Investing Activities:
Purchases of fixed maturities, held to maturity		(48,228,392	)		(23,566,350	)
Purchases of fixed maturities, available for sale		(93,483,260	)		(72,190,538	)
Purchases of equity securities, available for sale		(2,512,570	)		(3,679,586	)
Maturity of fixed maturities:
Held to maturity		15,298,111			12,484,869
Available for sale		47,403,605			52,270,575
Sales of fixed maturities:
Available for sale		45,876,392			2,995,648
Sales of equity securities, available for sale		2,145,314			—
Net purchases of property and equipment		(100	)		—
Net (purchases) sales of short-term investments		(205,257	)		15,734,741
Net cash used in investing activities		(33,706,157	)		(15,950,641	)
Cash Flows from Financing Activities:
Cash dividends paid		(12,523,188	)		(11,249,145	)
Issuance of common stock		12,859,239			1,135,412
Net cash provided by (used in) financing activities		336,051			(10,113,733	)

	Amortized Cost		Estimated Fair Value
	(in thousands)
Held to maturity
Due in one year or less	$	19,662	$	19,555
Due after one year through five years		149,602		144,315
Due after five years through ten years		251,554		237,412
Due after ten years		308,088		261,826
Mortgage-backed securities		9,824		9,645
Total held to maturity	$	738,730	$	672,753

Available for sale
Due in one year or less	$	42,379	$	42,184
Due after one year through five years		142,351		139,220
Due after five years through ten years		89,713		85,949
Due after ten years		17,378		14,938
Mortgage-backed securities		355,480		343,816
Total available for sale	$	647,301	$	626,107

	Six Months Ended June 30, 2024
	Investments		Commercial Lines			Personal Lines			Total
	(in thousands)
Revenues:
Net premiums earned	$	—	$	266,581		$	195,479		$	462,060
Net investment income		22,041		—			—			22,041
Investment gains		2,850		—			—			2,850
Total segment revenues		24,891		266,581			195,479			486,951
Other										962
Total revenues									$	487,913
Segment expenses:
Net losses and loss expenses		—		182,476			136,585			319,061
Other underwriting expenses		—		101,554			59,831			161,385
Policyholder dividends		—		2,241			—			2,241
Total segment expenses		—		286,271			196,416			482,687
SAP underwriting loss		—		(19,690	)		(937	)		(20,627	)
GAAP adjustments										8,154
GAAP underwriting loss										(12,473	)
Net investment income										22,041
Investment gains										2,850
Other										(157	)
Income before income tax expense									$	12,261

FHLB of Pittsburgh stock purchased and owned	$	1,615,400
Collateral pledged, at par (carrying value $42,729,803)		45,100,016
Borrowing capacity currently available		5,438,917

	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	$	59,374	$	—	$	59,374	$	—
Obligations of states and political subdivisions		30,966		—		30,966		—
Corporate securities		191,951		—		191,951		—
Mortgage-backed securities		343,816		—		343,816		—
Equity securities		41,007		38,897		2,110		—
Total investments in the fair value hierarchy	$	667,114	$	38,897	$	628,217	$	—

	At and For the Three Months Ended June 30, 2025				At and For the Three Months Ended June 30, 2024
	Held-to-Maturity, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses		Held-to-Maturity, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses
	(in thousands)
Balance at beginning of period	$	706,098	$	1,351	$	683,399	$	1,329
Current period change for expected credit losses				23				25
Balance at end of period	$	737,356	$	1,374	$	690,580	$	1,354

	At and For the Six Months Ended June 30, 2025					At and For the Six Months Ended June 30, 2024
	Held-to-Maturity, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses			Held-to-Maturity, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses
	(in thousands)
Balance at beginning of period	$	705,714	$	1,388		$	679,497	$	1,326
Current period change for expected credit losses				(14	)				28
Balance at end of period	$	737,356	$	1,374		$	690,580	$	1,354

	At and For the Three Months Ended June 30, 2025					At and For the Three Months Ended June 30, 2024
	Reinsurance Receivable, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses			Reinsurance Receivable, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses
	(in thousands)
Balance at beginning of period	$	403,382	$	434		$	435,505	$	1,026
Current period change for expected credit losses				(102	)				(94	)
Balance at end of period	$	411,125	$	332		$	440,858	$	932

	At and For the Six Months Ended June 30, 2025					At and For the Six Months Ended June 30, 2024
	Reinsurance Receivable, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses			Reinsurance Receivable, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses
	(in thousands)
Balance at beginning of period	$	420,742	$	391		$	441,431	$	1,394
Current period change for expected credit losses				(59	)				(462	)
Balance at end of period	$	411,125	$	332		$	440,858	$	932

Percentage Change in Loss and Loss Expense Reserves Net of Reinsurance	Adjusted Loss and Loss Expense Reserves Net of Reinsurance at June 30, 2025	Percentage Change in Stockholders’ Equity at June 30, 2025(1)	Adjusted Loss and Loss Expense Reserves Net of Reinsurance at December 31, 2024	Percentage Change in Stockholders’ Equity at December 31, 2024(1)
(dollars in thousands)
(10.0)%	$638,515	9.3%	$633,928	10.2%
(7.5)	656,251	6.9	651,537	7.6
(5.0)	673,988	4.6	669,146	5.1
(2.5)	691,724	2.3	686,755	2.5
Base	709,461	—	704,364	—
2.5	727,198	(2.3)	721,973	(2.5)
5.0	744,934	(4.6)	739,582	(5.1)
7.5	762,671	(6.9)	757,191	(7.6)
10.0	780,407	(9.3)	774,800	(10.2)

Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)	(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
Month #1 April 1-30, 2025	Class A – None Class B – None	Class A – None Class B – None	Class A – None Class B – None	(1)

Month #2 May 1-31, 2025	Class A – 107,239 Class B – None	Class A – $14.43 Class B – None	Class A – 107,239 Class B – None	(1)

Month #3 June 1-30, 2025	Class A – None Class B – None	Class A – None Class B – None	Class A – None Class B – None	(1)

Total	Class A – 107,239 Class B – None	Class A – $14.43 Class B – None	Class A – 107,239 Class B – None

Exhibit No.	Description	Reference

Other Exhibits

31.1	Certification of Chief Executive Officer.	Filed herewith

31.2	Certification of Chief Financial Officer.	Filed herewith

32.1	Statement of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 of Title 18 of the United States Code.	Filed herewith

32.2	Statement of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 of Title 18 of the United States Code.	Filed herewith

Exhibit 101.INS	XBRL Instance Document	Filed herewith

Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith

Exhibit 101.PRE	XBRL Taxonomy Presentation Linkbase Document	Filed herewith

Exhibit 101.CAL	XBRL Taxonomy Calculation Linkbase Document	Filed herewith

Exhibit 101.LAB	XBRL Taxonomy Label Linkbase Document	Filed herewith

Exhibit 101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith

Exhibit 104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)	Filed herewith

	DONEGAL GROUP INC.

August 5, 2025	By:	/s/ Kevin G. Burke
		Kevin G. Burke, President and Chief Executive Officer

August 5, 2025	By:	/s/ Jeffrey D. Miller
		Jeffrey D. Miller, Executive Vice President and Chief Financial Officer

Date:	August 5, 2025	/s/ Kevin G. Burke
		Kevin G. Burke,
		President and Chief Executive Officer

Date: August 5, 2025	/s/ Kevin G. Burke
	Kevin G. Burke, President and Chief Executive Officer