Donegal Group Inc 10-Q for FY2026 Q1

Donegal Group Inc (DGICA)

10-Q 2026-05-07 For: 2026-03-31

Added on May 07, 2026

About this 10-Q

Donegal Group Inc filed this 10-Q on May 7, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $236M; down 3.7% from $245.17M a year earlier
Net income: $11.51M; down 54.3% from net income of $25.21M 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	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults upon Senior Securities	32
Item 4.	Mine Safety Disclosure	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
Signatures		34

	March 31, 2026			December 31, 2025
	(Unaudited)
Assets
Investments
Fixed maturities
Held to maturity, at amortized cost (net of allowance for expected credit losses of $1,274,490 and $1,312,903)	$	783,951,953		$	776,447,347
Available for sale, at fair value		649,110,503			640,722,775
Equity securities, at fair value		45,105,813			44,370,358
Short-term investments, at cost, which approximates fair value		26,016,894			38,712,341
Total investments		1,504,185,163			1,500,252,821
Cash		35,501,229			26,785,845
Accrued investment income		11,978,051			10,914,235
Premiums receivable		197,327,411			180,803,918
Reinsurance receivable (net of allowance for expected credit losses of $401,773 and $374,883)		418,091,102			398,582,136
Deferred policy acquisition costs		71,995,952			68,669,982
Deferred tax asset, net		14,843,359			13,287,301
Prepaid reinsurance premiums		179,320,225			171,083,219
Property and equipment, net		2,292,226			2,329,491
Federal income taxes recoverable		940,090			4,028,034
Due from affiliate		5,712,446			3,299,188
Goodwill		5,625,354			5,625,354
Other intangible assets		958,010			958,010
Other		9,918			9,918
Total assets	$	2,448,780,536		$	2,386,629,452
Liabilities and Stockholders’ Equity
Liabilities
Losses and loss expenses	$	1,129,814,963		$	1,100,049,937
Unearned premiums		617,210,414			591,040,451
Accrued expenses		2,311,032			2,220,800
Reinsurance balances payable		3,141,996			3,484,130
Borrowings under lines of credit		35,000,000			35,000,000
Cash dividends declared to stockholders		—			6,647,482
Accounts payable - securities		4,350,228			—
Other		7,859,267			7,768,573
Total liabilities		1,799,687,900			1,746,211,373
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 34,440,977 and 34,385,129 shares and outstanding 31,438,389 and 31,382,541 shares		344,410			343,852
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		393,244,272			391,811,397
Accumulated other comprehensive loss		(12,407,401	)		(8,295,743	)
Retained earnings		309,081,220			297,728,438
Treasury stock, at cost		(41,226,357	)		(41,226,357	)
Total stockholders’ equity		649,092,636			640,418,079
Total liabilities and stockholders’ equity	$	2,448,780,536		$	2,386,629,452

	Three Months Ended March 31,
	2026			2025
Revenues:
Net premiums earned	$	221,357,442		$	232,701,889
Investment income, net of investment expenses		14,287,065			11,983,574
Net investment losses (includes $70,854 and $57,103 accumulated other comprehensive income reclassifications)		(479,224	)		(470,861	)
Lease income		74,218			76,827
Installment payment fees		756,733			882,195
Total revenues		235,996,234			245,173,624
Expenses:
Net losses and loss expenses		141,999,594			132,033,147
Amortization of deferred policy acquisition costs		36,297,000			39,231,000
Other underwriting expenses		42,014,492			41,194,994
Policyholder dividends		651,707			759,389
Interest		333,025			333,045
Other expenses, net		577,453			461,100
Total expenses		221,873,271			214,012,675
Income before income tax expense		14,122,963			31,160,949
Income tax expense (includes $14,879 and $11,992 income tax expense from reclassification items)		2,612,359			5,955,775
Net income	$	11,510,604		$	25,205,174
Net income per share:
Class A common stock - basic	$	0.32		$	0.72
Class A common stock - diluted	$	0.31		$	0.71
Class B common stock - basic and diluted	$	0.29		$	0.65

	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, 2025		34,385,129		5,649,240	$	343,852	$	56,492	$	391,811,397	$	(8,295,743	)	$	297,728,438		$	(41,226,357	)	$	640,418,079
Issuance of common stock (stock compensation plans)		39,583		—		395		—		723,690		—			—			—			724,085
Share-based compensation		16,265		—		163		—		559,026		—			—			—			559,189
Net income		—		—		—		—		—		—			11,510,604			—			11,510,604
Cash dividends declared		—		—		—		—		—		—			(7,663	)		—			(7,663	)
Grant of stock options		—		—		—		—		150,159		—			(150,159	)		—			—
Other comprehensive loss		—		—		—		—		—		(4,111,658	)		—			—			(4,111,658	)
Balance, March 31, 2026		34,440,977		5,649,240	$	344,410	$	56,492	$	393,244,272	$	(12,407,401	)	$	309,081,220		$	(41,226,357	)	$	649,092,636

	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	$	73,787	$	44	$	73,831	$	49	$	5,123	$	68,757
Obligations of states and political subdivisions		447,460		359		447,819		2,381		44,403		405,797
Corporate securities		255,159		867		256,026		1,040		9,305		247,761
Mortgage-backed securities		7,546		4		7,550		47		142		7,455
Totals	$	783,952	$	1,274	$	785,226	$	3,517	$	58,973	$	729,770

	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	$	24,355	$	43	$	903	$	23,495
Obligations of states and political subdivisions		52,679		383		2,593		50,469
Corporate securities		141,280		301		2,550		139,031
Mortgage-backed securities		445,694		1,749		11,327		436,116
Totals	$	664,008	$	2,476	$	17,373	$	649,111

	Cost		Gross Gains		Gross Losses		Estimated Fair Value
	(in thousands)
Equity securities	$	28,560	$	16,738	$	192	$	45,106

	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	$	13,581	$	86	$	70,266	$	5,940
Obligations of states and political subdivisions		72,793		1,975		281,046		45,021
Corporate securities		110,730		1,833		175,475		10,022
Mortgage-backed securities		177,508		2,237		87,097		9,232
Totals	$	374,612	$	6,131	$	613,884	$	70,215

	Three Months Ended March 31, 2026
	Investments			Commercial Lines			Personal Lines		Total
	(in thousands)
Revenues:
Net premiums earned	$	—		$	138,963		$	82,394	$	221,357
Net investment income		14,287			—			—		14,287
Investment losses		(479	)		—			—		(479	)
Total segment revenues		13,808			138,963			82,394		235,165
Other										831
Total revenues									$	235,996
Segment expenses:
Net losses and loss expenses		—			95,358			46,109		141,467
Other underwriting expenses		—			58,478			22,897		81,375
Policyholder dividends		—			652			—		652
Total segment expenses		—			154,488			69,006		223,494
SAP underwriting (loss) income		—			(15,525	)		13,388		(2,137	)
GAAP adjustments										2,532
GAAP underwriting income										395
Net investment income										14,287
Investment losses										(479	)
Other										(80	)
Income before income tax expense									$	14,123

	Three Months Ended March 31, 2025
	Investments			Commercial Lines			Personal Lines		Total
	(in thousands)
Revenues:
Net premiums earned	$	—		$	136,216		$	96,486	$	232,702
Net investment income		11,984			—			—		11,984
Investment losses		(471	)		—			—		(471	)
Total segment revenues		11,513			136,216			96,486		244,215
Other										959
Total revenues									$	245,174
Segment expenses:
Net losses and loss expenses		—			81,321			50,708		132,029
Other underwriting expenses		—			55,514			27,485		82,999
Policyholder dividends		—			759			—		759
Total segment expenses		—			137,594			78,193		215,787
SAP underwriting (loss) income		—			(1,378	)		18,293		16,915
GAAP adjustments										2,568
GAAP underwriting income										19,483
Net investment income										11,984
Investment losses										(471	)
Other										165
Income before income tax expense									$	31,161

FHLB of Pittsburgh stock purchased and owned	$	1,615,400
Collateral pledged, at par (carrying value $41,276,943)		43,069,261
Borrowing capacity currently available		4,005,219

	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	$	23,495	$	—	$	23,495	$	—
Obligations of states and political subdivisions		50,469		—		50,469		—
Corporate securities		139,031		—		139,031		—
Mortgage-backed securities		436,116		—		436,116		—
Equity securities		45,106		42,969		2,137		—
Total investments in the fair value hierarchy	$	694,217	$	42,969	$	651,248	$	—

	Three Months Ended March 31,
	2026			2025
Cash Flows from Operating Activities:
Net income	$	11,510,604		$	25,205,174
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		857,401			1,020,039
Net investment losses		479,224			470,861
Changes in assets and liabilities:
Losses and loss expenses		29,765,026			(28,361,486	)
Unearned premiums		26,169,963			21,088,303
Premiums receivable		(16,523,493	)		(12,868,607	)
Deferred acquisition costs		(3,325,970	)		(2,847,365	)
Deferred income taxes		(463,085	)		(88,129	)
Reinsurance receivable		(19,508,966	)		17,360,240
Prepaid reinsurance premiums		(8,237,006	)		(6,697,810	)
Accrued investment income		(1,063,816	)		(746,169	)
Due from affiliate		(2,413,258	)		5,511,873
Reinsurance balances payable		(342,134	)		(515,651	)
Current income taxes		3,087,944			6,108,965
Accrued expenses		90,232			61,685
Other, net		90,649			1,047,840
Net adjustments		8,662,711			544,589
Net cash provided by operating activities		20,173,315			25,749,763
Cash Flows from Investing Activities:
Purchases of fixed maturities, held to maturity		(12,142,867	)		(8,795,740	)
Purchases of fixed maturities, available for sale		(43,893,780	)		(37,872,046	)
Purchases of equity securities, available for sale		(1,322,139	)		(2,502,170	)
Maturity of fixed maturities:
Held to maturity		9,050,096			7,057,175
Available for sale		30,199,197			23,253,617
Net sales (purchases) of property and equipment		325			(100	)
Net sales of short-term investments		12,695,447			3,936,913
Net cash used in investing activities		(5,413,721	)		(14,922,351	)
Cash Flows from Financing Activities:
Cash dividends paid		(6,655,145	)		(6,037,634	)
Issuance of common stock		610,935			6,599,404
Net cash (used in) provided by financing activities		(6,044,210	)		561,770
Net increase in cash		8,715,384			11,389,182
Cash at beginning of period		26,785,845			52,925,931
Cash at end of period	$	35,501,229		$	64,315,113

			Three Months Ended March 31,
	2026				2025
	Class A		Class B		Class A		Class B
	(in thousands, except per share data)
Basic net income per share:
Numerator:
Allocation of net income	$	9,913	$	1,598	$	21,575	$	3,630
Denominator:
Weighted-average shares outstanding		31,428		5,577		30,121		5,577
Basic net income per share	$	0.32	$	0.29	$	0.72	$	0.65

Diluted net income per share:
Numerator:
Allocation of net income	$	9,913	$	1,598	$	21,575	$	3,630
Denominator:
Number of shares used in basic computation		31,428		5,577		30,121		5,577
Weighted-average shares effect of dilutive securities:
Director and employee stock options		386		—		309		—
Unvested restricted stock units		114		—		—		—
Number of shares used in diluted computation		31,928		5,577		30,430		5,577
Diluted net income per share	$	0.31	$	0.29	$	0.71	$	0.65

	Amortized Cost		Estimated Fair Value
	(in thousands)
Held to maturity
Due in one year or less	$	7,075	$	7,047
Due after one year through five years		223,356		212,535
Due after five years through ten years		224,875		212,680
Due after ten years		322,370		290,053
Mortgage-backed securities		7,550		7,455
Total held to maturity	$	785,226	$	729,770

Available for sale
Due in one year or less	$	13,280	$	13,254
Due after one year through five years		71,676		69,981
Due after five years through ten years		80,378		78,148
Due after ten years		52,980		51,612
Mortgage-backed securities		445,694		436,116
Total available for sale	$	664,008	$	649,111

	At and For the Three Months Ended March 31, 2026					At and For the Three Months Ended March 31, 2025
	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	$	776,447	$	1,313		$	705,714	$	1,388
Current period change for expected credit losses				(39	)				(37	)
Balance at end of period	$	783,952	$	1,274		$	706,098	$	1,351

	At and For the Three Months Ended March 31, 2026				At and For the Three Months Ended March 31, 2025
	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	$	398,582	$	375	$	420,742	$	391
Current period change for expected credit losses				27				43
Balance at end of period	$	418,091	$	402	$	403,382	$	434

Percentage Change in Loss and Loss Expense Reserves Net of Reinsurance	Adjusted Loss and Loss Expense Reserves Net of Reinsurance at March 31, 2026	Percentage Change in Stockholders’ Equity at March 31, 2026(1)	Adjusted Loss and Loss Expense Reserves Net of Reinsurance at December 31, 2025	Percentage Change in Stockholders’ Equity at December 31, 2025(1)
(dollars in thousands)
(10.0)%	$644,493	8.7%	$634,676	8.7%
(7.5)	662,395	6.5	652,306	6.5
(5.0)	680,298	4.4	669,936	4.3
(2.5)	698,200	2.2	687,566	2.2
Base	716,103	—	705,196	—
2.5	734,006	(2.2)	722,826	(2.2)
5.0	751,908	(4.4)	740,456	(4.3)
7.5	769,811	(6.5)	758,086	(6.5)
10.0	787,713	(8.7)	775,716	(8.7)

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 January 1-31, 2026	Class A – None Class B – None	Class A – None Class B – None	Class A – None Class B – None	(1)

Month #2 February 1-28, 2026	Class A – None Class B – None	Class A – None Class B – None	Class A – None Class B – None	(1)

Month #3 March 1-31, 2026	Class A – 9,000 Class B – None	Class A – $17.63 Class B – None	Class A – 9,000 Class B – None	(1)

Total	Class A – 9,000 Class B – None	Class A – $17.63 Class B – None	Class A – 9,000 Class B – None

Exhibit No.	Description	Reference


Other Exhibits

31.1	Rule 13a-14(a)/15(d)-14(a) Certification of Chief Executive Officer.	Filed herewith

31.2	Rule 13a-14(a)/15(d)-14(a) Certification of Chief Financial Officer.	Filed herewith

32.1	Section 1350 of Certification of Chief Executive Officer	Filed herewith

32.2	Section 1350 of Certification of Chief Financial Officer	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.

May 7, 2026	By:	/s/ Kevin G. Burke
		Kevin G. Burke, President and Chief Executive Officer

May 7, 2026	By:	/s/ Jeffrey D. Miller
		Jeffrey D. Miller, Executive Vice President
		and Chief Financial Officer

Date:	May 7, 2026	/s/ Kevin G. Burke
		Kevin G. Burke, President and Chief Executive Officer

Date: May 7, 2026	/s/ Kevin G. Burke
	Kevin G. Burke, President and Chief Executive Officer