Donegal Group Inc 10-Q for FY2025 Q3

Donegal Group Inc (DGICA)

10-Q 2025-11-04 For: 2025-09-30

Added on April 12, 2026

About this 10-Q

Donegal Group Inc filed this 10-Q on November 4, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).

Headline figures

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

Revenue: $245.92M; down 2.3% from $251.74M a year earlier
Net income: $20.08M; up 19.9% from net income of $16.75M a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

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	37
Item 4.	Controls and Procedures	37

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults upon Senior Securities	39
Item 4.	Mine Safety Disclosure	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
Signatures		41

	September 30, 2025			December 31, 2024
	(Unaudited)
Assets
Investments
Fixed maturities
Held to maturity, at amortized cost (net of allowance for expected credit losses of $1,272,622 and $1,388,240)	$	761,409,462		$	705,713,916
Available for sale, at fair value		642,657,930			617,891,862
Equity securities, at fair value		43,637,074			36,807,810
Short-term investments, at cost, which approximates fair value		37,432,420			24,558,744
Total investments		1,485,136,886			1,384,972,332
Cash		38,571,476			52,925,931
Accrued investment income		11,459,164			10,361,959
Premiums receivable		192,896,079			181,106,519
Reinsurance receivable (net of allowance for expected credit losses of $340,757 and $391,432)		403,763,714			420,741,855
Deferred policy acquisition costs		73,423,403			73,346,967
Deferred tax asset, net		14,002,759			18,769,861
Prepaid reinsurance premiums		180,412,938			176,161,872
Property and equipment, net		2,366,252			2,479,183
Accounts receivable - securities		—			24,924
Federal income taxes recoverable		4,403,466			—
Due from affiliate		8,647,871			8,410,090
Goodwill		5,625,354			5,625,354
Other intangible assets		958,010			958,010
Other		9,918			147,126
Total assets	$	2,421,677,290		$	2,336,031,983
Liabilities and Stockholders’ Equity
Liabilities
Losses and loss expenses	$	1,114,301,536		$	1,120,985,050
Unearned premiums		622,948,885			612,476,068
Accrued expenses		2,500,859			2,916,705
Reinsurance balances payable		2,912,424			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
Accounts payable - securities		7,975,071			—
Other		8,596,657			8,145,422
Total liabilities		1,794,235,432			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 34,037,415 and 32,954,347 shares and outstanding 31,034,827 and 29,951,759 shares		340,375			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		386,550,965			369,679,946
Accumulated other comprehensive loss		(12,083,931	)		(28,200,481	)
Retained earnings		293,804,314			245,136,987
Treasury stock, at cost		(41,226,357	)		(41,226,357	)
Total stockholders’ equity		627,441,858			545,776,131
Total liabilities and stockholders’ equity	$	2,421,677,290		$	2,336,031,983

	Three Months Ended September 30,
	2025		2024
Revenues:
Net premiums earned	$	229,822,240	$	237,957,051
Investment income, net of investment expenses		13,942,503		10,826,991
Net investment gains (includes ($1,472,009) and ($69,478) accumulated other comprehensive income reclassifications)		1,272,277		1,875,466
Lease income		74,671		77,335
Installment payment fees		807,427		1,000,702
Total revenues		245,919,118		251,737,545
Expenses:
Net losses and loss expenses		142,715,240		146,425,777
Amortization of deferred policy acquisition costs		37,218,000		40,200,000
Other underwriting expenses		39,688,044		41,827,018
Policyholder dividends		731,131		1,006,645
Interest		340,425		367,583
Other expenses, net		176,750		1,499,217
Total expenses		220,869,590		231,326,240
Income before income tax expense		25,049,528		20,411,305
Income tax expense (includes $309,122 and $14,590 income tax benefit from reclassification items)		4,969,314		3,659,775
Net income	$	20,080,214	$	16,751,530
Net income per share:
Class A common stock - basic	$	0.56	$	0.51
Class A common stock - diluted	$	0.55	$	0.51
Class B common stock - basic and diluted	$	0.51	$	0.46

	Nine Months Ended September 30,
	2025		2024
Revenues:
Net premiums earned	$	694,298,723	$	700,016,877
Investment income, net of investment expenses		38,466,439		32,867,817
Net investment gains (includes ($2,787,258) and ($65,121) accumulated other comprehensive income reclassifications)		2,345,137		4,725,513
Lease income		227,779		236,662
Installment payment fees		2,533,937		1,804,091
Total revenues		737,872,015		739,650,960
Expenses:
Net losses and loss expenses		425,665,512		462,682,511
Amortization of deferred policy acquisition costs		115,950,000		120,458,000
Other underwriting expenses		116,032,926		117,604,295
Policyholder dividends		2,309,462		3,247,853
Interest		1,010,175		676,766
Other expenses, net		269,106		2,309,392
Total expenses		661,237,181		706,978,817
Income before income tax expense		76,634,834		32,672,143
Income tax expense (includes $585,324 and $13,675 income tax benefit from reclassification items)		14,483,326		5,812,285
Net income	$	62,151,508	$	26,859,858
Net income per share:
Class A common stock - basic	$	1.74	$	0.82
Class A common stock - diluted	$	1.72	$	0.81
Class B common stock - basic and diluted	$	1.58	$	0.74

	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
Issuance of common stock (stock compensation plans)		25,328		—		253		—		357,986		—			—			—			358,239
Share-based compensation		149,673		—		1,497		—		2,460,778		—			—			—			2,462,275
Net income		—		—		—		—		—		—			20,080,214			—			20,080,214
Cash dividends declared		—		—		—		—		—		—			(6,561,372	)		—			(6,561,372	)
Grant of stock options		—		—		—		—		185,885		—			(185,885	)		—			—
Other comprehensive income		—		—		—		—		—		5,433,057			—			—			5,433,057
Balance, September 30, 2025		34,037,415		5,649,240	$	340,375	$	56,492	$	386,550,965	$	(12,083,931	)	$	293,804,314		$	(41,226,357	)	$	627,441,858

	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	$	84,699	$	51	$	84,750	$	80	$	5,407	$	79,423
Obligations of states and political subdivisions		418,191		322		418,513		2,338		43,513		377,338
Corporate securities		249,405		895		250,300		2,322		7,705		244,917
Mortgage-backed securities		9,114		5		9,119		59		173		9,005
Totals	$	761,409	$	1,273	$	762,682	$	4,799	$	56,798	$	710,683

	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	$	54,431	$	125	$	1,631	$	52,925
Obligations of states and political subdivisions		44,599		288		2,472		42,415
Corporate securities		145,782		1,048		2,955		143,875
Mortgage-backed securities		412,255		2,590		11,402		403,443
Totals	$	657,067	$	4,051	$	18,460	$	642,658

	Cost		Gross Gains		Gross Losses		Estimated Fair Value
	(in thousands)
Equity securities	$	27,238	$	16,431	$	32	$	43,637

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
	(in thousands)						(in thousands)
Gross realized gains:
Fixed maturities	$	399		$	69		$	814		$	74
Equity securities		—			72			687			72
		399			141			1,501			146
Gross realized losses:
Fixed maturities		1,857			139			3,587			139
Equity securities		—			71			—			71
		1,857			210			3,587			210
Net realized losses		(1,458	)		(69	)		(2,086	)		(64	)
Gross unrealized gains on equity securities		2,629			2,073			4,348			4,947
Gross unrealized losses on equity securities		—			—			(32	)		—
Fixed maturities - credit impairment charges		101			(129	)		115			(157	)
Net investment gains	$	1,272		$	1,875		$	2,345		$	4,726

	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	$	13,793	$	28	$	98,605	$	7,010
Obligations of states and political subdivisions		24,753		219		283,290		45,766
Corporate securities		10,498		87		222,106		10,573
Mortgage-backed securities		79,738		373		122,041		11,202
Totals	$	128,782	$	707	$	726,042	$	74,551

	Three Months Ended September 30, 2025
	Investments		Commercial Lines		Personal Lines		Total
	(in thousands)
Revenues:
Net premiums earned	$	—	$	140,289	$	89,533	$	229,822
Net investment income		13,943		—		—		13,943
Investment gains		1,272		—		—		1,272
Total segment revenues		15,215		140,289		89,533		245,037
Other								882
Total revenues							$	245,919
Segment expenses:
Net losses and loss expenses		—		83,730		58,905		142,635
Other underwriting expenses		—		47,653		25,857		73,510
Policyholder dividends		—		731		—		731
Total segment expenses		—		132,114		84,762		216,876
SAP underwriting income		—		8,175		4,771		12,946
GAAP adjustments								(3,476	)
GAAP underwriting income								9,470
Net investment income								13,943
Investment gains								1,272
Other								365
Income before income tax expense							$	25,050

	Three Months Ended September 30, 2024
	Investments		Commercial Lines		Personal Lines			Total
	(in thousands)
Revenues:
Net premiums earned	$	—	$	136,401	$	101,556		$	237,957
Net investment income		10,827		—		—			10,827
Investment gains		1,875		—		—			1,875
Total segment revenues		12,702		136,401		101,556			250,659
Other									1,078
Total revenues								$	251,737
Segment expenses:
Net losses and loss expenses		—		71,488		75,747			147,235
Other underwriting expenses		—		46,471		32,699			79,170
Policyholder dividends		—		1,007		—			1,007
Total segment expenses		—		118,966		108,446			227,412
SAP underwriting income (loss)		—		17,435		(6,890	)		10,545
GAAP adjustments									(2,047	)
GAAP underwriting income									8,498
Net investment income									10,827
Investment gains									1,875
Other									(789	)
Income before income tax expense								$	20,411

	Nine Months Ended September 30,
	2025			2024
Cash Flows from Operating Activities:
Net income	$	62,151,508		$	26,859,858
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		2,649,815			2,877,843
Net investment gains		(2,345,137	)		(4,725,513	)
Changes in assets and liabilities:
Losses and loss expenses		(6,683,514	)		8,695,604
Unearned premiums		10,472,817			47,458,942
Premiums receivable		(11,789,560	)		(14,662,164	)
Deferred acquisition costs		(76,436	)		(3,441,052	)
Deferred income taxes		482,956			73,149
Reinsurance receivable		16,978,141			7,353,674
Prepaid reinsurance premiums		(4,251,066	)		(16,639,438	)
Accrued investment income		(1,097,205	)		(864,579	)
Due from affiliate		(237,781	)		(15,492,085	)
Reinsurance balances payable		(1,433,002	)		(5,369,148	)
Current income taxes		(4,759,569	)		5,726,637
Accrued expenses		(415,846	)		(959,576	)
Other, net		586,963			2,346,248
Net adjustments		(1,918,424	)		12,378,542
Net cash provided by operating activities		60,233,084			39,238,400
Cash Flows from Investing Activities:
Purchases of fixed maturities, held to maturity		(82,373,947	)		(38,788,763	)
Purchases of fixed maturities, available for sale		(211,471,122	)		(103,059,218	)
Purchases of equity securities, available for sale		(2,512,570	)		(6,680,114	)
Maturity of fixed maturities:
Held to maturity		25,567,921			23,520,685
Available for sale		95,926,329			80,297,679
Sales of fixed maturities:
Available for sale		114,705,284			3,943,799
Sales of equity securities, available for sale		2,145,314			1,574,265
Net purchases of property and equipment		(102	)		—
Net (purchases) sales of short-term investments		(12,873,676	)		16,500,623
Net cash used in investing activities		(70,886,569	)		(22,691,044	)
Cash Flows from Financing Activities:
Cash dividends paid		(19,084,560	)		(16,927,483	)
Issuance of common stock		15,383,590			5,238,628
Net cash used in financing activities		(3,700,970	)		(11,688,855	)

	Amortized Cost		Estimated Fair Value
	(in thousands)
Held to maturity
Due in one year or less	$	18,931	$	18,895
Due after one year through five years		158,572		153,148
Due after five years through ten years		246,057		236,617
Due after ten years		330,003		293,018
Mortgage-backed securities		9,119		9,005
Total held to maturity	$	762,682	$	710,683

Available for sale
Due in one year or less	$	33,144	$	32,936
Due after one year through five years		87,073		85,653
Due after five years through ten years		82,935		80,455
Due after ten years		41,660		40,171
Mortgage-backed securities		412,255		403,443
Total available for sale	$	657,067	$	642,658

	Nine Months Ended September 30, 2025
	Investments		Commercial Lines		Personal Lines		Total
	(in thousands)
Revenues:
Net premiums earned	$	—	$	415,032	$	279,267	$	694,299
Net investment income		38,466		—		—		38,466
Investment gains		2,345		—		—		2,345
Total segment revenues		40,811		415,032		279,267		735,110
Other								2,762
Total revenues							$	737,872
Segment expenses:
Net losses and loss expenses		—		256,569		169,603		426,172
Other underwriting expenses		—		153,141		78,260		231,401
Policyholder dividends		—		2,309		—		2,309
Total segment expenses		—		412,019		247,863		659,882
SAP underwriting income		—		3,013		31,404		34,417
GAAP adjustments								(76	)
GAAP underwriting income								34,341
Net investment income								38,466
Investment gains								2,345
Other								1,483
Income before income tax expense							$	76,635

	Nine Months Ended September 30, 2024
	Investments		Commercial Lines			Personal Lines			Total
	(in thousands)
Revenues:
Net premiums earned	$	—	$	402,982		$	297,035		$	700,017
Net investment income		32,868		—			—			32,868
Investment gains		4,726		—			—			4,726
Total segment revenues		37,594		402,982			297,035			737,611
Other										2,040
Total revenues									$	739,651
Segment expenses:
Net losses and loss expenses		—		253,968			212,332			466,300
Other underwriting expenses		—		148,021			92,530			240,551
Policyholder dividends		—		3,248			—			3,248
Total segment expenses		—		405,237			304,862			710,099
SAP underwriting loss		—		(2,255	)		(7,827	)		(10,082	)
GAAP adjustments										6,106
GAAP underwriting loss										(3,976	)
Net investment income										32,868
Investment gains										4,726
Other										(946	)
Income before income tax expense									$	32,672

FHLB of Pittsburgh stock purchased and owned	$	1,615,400
Collateral pledged, at par (carrying value $41,498,061)		43,565,579
Borrowing capacity currently available		4,334,579

	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	$	52,925	$	—	$	52,925	$	—
Obligations of states and political subdivisions		42,415		—		42,415		—
Corporate securities		143,875		—		143,875		—
Mortgage-backed securities		403,443		—		403,443		—
Equity securities		43,637		41,527		2,110		—
Total investments in the fair value hierarchy	$	686,295	$	41,527	$	644,768	$	—

	At and For the Three Months Ended September 30, 2025					At and For the Three Months Ended September 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	$	737,356	$	1,374		$	690,580	$	1,354
Current period change for expected credit losses				(101	)				129
Balance at end of period	$	761,409	$	1,273		$	694,663	$	1,483

	At and For the Nine Months Ended September 30, 2025					At and For the Nine Months Ended September 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				(115	)				157
Balance at end of period	$	761,409	$	1,273		$	694,663	$	1,483

	At and For the Three Months Ended September 30, 2025				At and For the Three Months Ended September 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	$	411,125	$	332	$	440,858	$	932
Current period change for expected credit losses				9				11
Balance at end of period	$	403,764	$	341	$	434,078	$	943

Percentage Change in Loss and Loss Expense Reserves Net of Reinsurance	Adjusted Loss and Loss Expense Reserves Net of Reinsurance at September 30, 2025	Percentage Change in Stockholders’ Equity at September 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)%	$643,541	9.0%	$633,928	10.2%
(7.5)	661,418	6.8	651,537	7.6
(5.0)	679,294	4.5	669,146	5.1
(2.5)	697,170	2.3	686,755	2.5
Base	715,046	—	704,364	—
2.5	732,922	(2.3)	721,973	(2.5)
5.0	750,798	(4.5)	739,582	(5.1)
7.5	768,674	(6.8)	757,191	(7.6)
10.0	786,551	(9.0)	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 July 1-31, 2025	Class A – None Class B – None	Class A – None Class B – None	Class A – None Class B – None	(1)

Month #2 August 1-31, 2025	Class A – 59,356 Class B – None	Class A – $17.61 Class B – None	Class A – 59,356 Class B – None	(1)

Month #3 September 1-30, 2025	Class A – 153,602 Class B – None	Class A – $19.01 Class B – None	Class A – 153,602 Class B – None	(1)

Total	Class A – 212,958 Class B – None	Class A – $18.62 Class B – None	Class A – 212,958 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.

November 3, 2025	By:	/s/ Kevin G. Burke
		Kevin G. Burke, President and Chief Executive Officer

November 3, 2025	By:	/s/ Jeffrey D. Miller
		Jeffrey D. Miller, Executive Vice President
		and Chief Financial Officer

Date:	November 3, 2025	/s/ Kevin G. Burke
		Kevin G. Burke, President and Chief Executive Officer

Date: November 3, 2025	/s/ Kevin G. Burke
	Kevin G. Burke, President and Chief Executive Officer