Donegal Group Inc 10-Q for FY2026 Q2

Donegal Group Inc (DGICA)

10-Q 2026-08-04 For: 2026-06-30

Added on August 04, 2026

About this 10-Q

Donegal Group Inc filed this 10-Q on August 4, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).

Headline figures

Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $241.12M; down 2.4% from $247.15M a year earlier
Net income: $22.31M; up 32.3% from net income of $16.87M 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	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

	June 30, 2026			December 31, 2025
	(Unaudited)
Assets
Investments
Fixed maturities
Held to maturity, at amortized cost (fair value $754,765,403 and $731,659,323; net of allowance for expected credit losses of $1,306,225 and $1,312,903)	$	803,294,965		$	776,447,347
Available for sale, at fair value (amortized cost $650,458,942 and $650,370,011)		636,519,616			640,722,775
Equity securities, at fair value		48,879,905			44,370,358
Short-term investments, available for sale		26,530,086			38,712,341
Total investments		1,515,224,572			1,500,252,821
Cash		23,722,355			26,785,845
Accrued investment income		11,426,010			10,914,235
Premiums receivable		217,819,143			180,803,918
Reinsurance receivable (net of allowance for expected credit losses of $390,961 and $374,883)		413,118,569			398,582,136
Deferred policy acquisition costs		71,900,055			68,669,982
Deferred tax asset, net		14,075,860			13,287,301
Prepaid reinsurance premiums		197,964,480			171,083,219
Property and equipment, net		1,140,681			2,329,491
Federal income taxes recoverable		2,692,615			4,028,034
Due from affiliate		5,293,434			3,299,188
Goodwill		5,625,354			5,625,354
Other intangible assets		958,010			958,010
Other		1,124,719			9,918
Total assets	$	2,482,085,857		$	2,386,629,452
Liabilities and Stockholders’ Equity
Liabilities
Losses and loss expenses	$	1,129,134,908		$	1,100,049,937
Unearned premiums		639,691,636			591,040,451
Accrued expenses		2,082,482			2,220,800
Reinsurance balances payable		1,958,420			3,484,130
Borrowings		35,000,000			35,000,000
Cash dividends declared to stockholders		—			6,647,482
Other		8,109,834			7,768,573
Total liabilities		1,815,977,280			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 34,478,816 and 34,385,129 shares and outstanding 31,476,228 and 31,382,541 shares		344,789			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		394,280,322			391,811,397
Accumulated other comprehensive loss		(11,616,681	)		(8,295,743	)
Retained earnings		324,270,012			297,728,438
Treasury stock, at cost		(41,226,357	)		(41,226,357	)
Total stockholders’ equity		666,108,577			640,418,079
Total liabilities and stockholders’ equity	$	2,482,085,857		$	2,386,629,452

	Three Months Ended June 30,
	2026		2025
Revenues:
Net premiums earned	$	222,574,233	$	231,774,594
Investment income, net of investment expenses		14,490,823		12,540,362
Net investment gains (includes ($1,351,958) and ($1,372,352) accumulated other comprehensive income reclassifications)		3,267,408		1,543,721
Lease income		74,095		76,281
Installment payment fees		712,494		844,315
Other income, net		—		368,744
Total revenues		241,119,053		247,148,017
Expenses:
Net losses and loss expenses		132,555,779		150,917,125
Amortization of deferred policy acquisition costs		36,123,000		39,501,000
Other underwriting expenses		43,562,039		35,149,888
Policyholder dividends		560,147		818,942
Interest		336,725		336,705
Other expenses, net		433,332		—
Total expenses		213,571,022		226,723,660
Income before income tax expense		27,548,031		20,424,357
Income tax expense (includes $283,911 and $288,194 income tax benefit from reclassification items)		5,242,282		3,558,237
Net income	$	22,305,749	$	16,866,120
Net income per share:
Class A common stock - basic	$	0.61	$	0.47
Class A common stock - diluted	$	0.60	$	0.46
Class B common stock - basic and diluted	$	0.55	$	0.43

	Six Months Ended June 30,
	2026		2025
Revenues:
Net premiums earned	$	443,931,675	$	464,476,483
Investment income, net of investment expenses		28,777,888		24,523,936
Net investment gains (includes ($1,281,104) and ($1,315,249) accumulated other comprehensive income reclassifications)		2,788,184		1,072,860
Lease income		148,313		153,108
Installment payment fees		1,469,227		1,726,510
Total revenues		477,115,287		491,952,897
Expenses:
Net losses and loss expenses		274,555,373		282,950,272
Amortization of deferred policy acquisition costs		72,420,000		78,732,000
Other underwriting expenses		85,576,531		76,344,882
Policyholder dividends		1,211,854		1,578,331
Interest		669,750		669,750
Other expenses, net		1,010,785		92,356
Total expenses		435,444,293		440,367,591
Income before income tax expense		41,670,994		51,585,306
Income tax expense (includes $269,032 and $276,202 income tax benefit from reclassification items)		7,854,641		9,514,012
Net income	$	33,816,353	$	42,071,294
Net income per share:
Class A common stock - basic	$	0.93	$	1.19
Class A common stock - diluted	$	0.91	$	1.17
Class B common stock - basic and diluted	$	0.84	$	1.08

	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
Issuance of common stock (stock compensation plans)		32,339				324				550,740		—			—			—			551,064
Share-based compensation		5,500				55				402,809		—			—			—			402,864
Net income		—		—		—		—		—		—			22,305,749			—			22,305,749
Cash dividends declared		—		—		—		—		—		—			(7,034,456	)		—			(7,034,456	)
Grant of stock options		—		—		—		—		82,501		—			(82,501	)		—			—
Other comprehensive income		—		—		—		—		—		790,720			—			—			790,720
Balance, June 30, 2026		34,478,816		5,649,240	$	344,789	$	56,492	$	394,280,322	$	(11,616,681	)	$	324,270,012		$	(41,226,357	)	$	666,108,577

	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	$	73,827	$	44	$	73,871	$	26	$	5,394	$	68,503
Obligations of states and political subdivisions		462,293		372		462,665		3,864		40,279		426,250
Corporate securities		260,114		886		261,000		1,066		9,025		253,041
Mortgage-backed securities		7,061		4		7,065		55		149		6,971
Totals	$	803,295	$	1,306	$	804,601	$	5,011	$	54,847	$	754,765

	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	$	21,354	$	4	$	960	$	20,398
Obligations of states and political subdivisions		51,450		633		1,824		50,259
Corporate securities		129,527		409		1,942		127,994
Mortgage-backed securities		448,128		1,304		11,563		437,869
Short-term investments		26,530		—		—		26,530
Totals	$	676,989	$	2,350	$	16,289	$	663,050

	Cost		Gross Gains		Gross Losses		Estimated Fair Value
	(in thousands)
Equity securities	$	27,554	$	21,326	$	—	$	48,880

	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	$	11,713	$	124	$	72,339	$	6,230
Obligations of states and political subdivisions		34,840		684		279,504		41,419
Corporate securities		118,836		1,648		160,395		9,319
Mortgage-backed securities		233,558		2,852		71,943		8,860
Totals	$	398,947	$	5,308	$	584,181	$	65,828

	Three Months Ended June 30, 2026
	Investments		Commercial Lines			Personal Lines		Total
	(in thousands)
Revenues:
Net premiums earned			$	141,516		$	81,058	$	222,574
Net investment income		14,491		—			—		14,491
Investment gains		3,267		—			—		3,267
Total segment revenues		17,758		141,516			81,058		240,332
Other									787
Total revenues								$	241,119
Segment expenses:
Net losses and loss expenses		—		89,431			42,440		131,871
Other underwriting expenses		—		54,706			24,581		79,287
Policyholder dividends		—		560			—		560
Total segment expenses		—		144,697			67,021		211,718
SAP underwriting (loss) income		—		(3,181	)		14,037		10,856
GAAP adjustments									(1,083	)
GAAP underwriting income									9,773
Net investment income									14,491
Investment gains									3,267
Other									17
Income before income tax expense								$	27,548

	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

	Six Months Ended June 30, 2026
	Investments		Commercial Lines			Personal Lines		Total
	(in thousands)
Revenues:
Net premiums earned	$	—	$	280,480		$	163,452	$	443,932
Net investment income		28,778		—			—		28,778
Investment gains		2,788		—			—		2,788
Total segment revenues		31,566		280,480			163,452		475,498
Other									1,617
Total revenues								$	477,115
Segment expenses:
Net losses and loss expenses		—		184,789			88,549		273,338
Other underwriting expenses		—		113,188			47,478		160,666
Policyholder dividends		—		1,212			—		1,212
Total segment expenses		—		299,189			136,027		435,216
SAP underwriting (loss) income		—		(18,709	)		27,425		8,716
GAAP adjustments									1,452
GAAP underwriting income									10,168
Net investment income									28,778
Investment gains									2,788
Other									(63	)
Income before income tax expense								$	41,671

	Six Months Ended June 30,
	2026			2025
Cash Flows from Operating Activities:
Net income	$	33,816,353		$	42,071,294
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		1,371,151			1,932,514
Net investment gains		(2,788,184	)		(1,072,860	)
Changes in assets and liabilities:
Losses and loss expenses		29,084,971			(3,975,352	)
Unearned premiums		48,651,185			23,062,029
Premiums receivable		(37,015,225	)		(17,778,303	)
Deferred acquisition costs		(3,230,073	)		(3,273,237	)
Deferred income taxes		94,222			341,554
Reinsurance receivable		(14,536,433	)		9,617,024
Prepaid reinsurance premiums		(26,881,261	)		(6,633,206	)
Accrued investment income		(511,775	)		(231,469	)
Due from affiliate		(1,994,246	)		1,557,386
Reinsurance balances payable		(1,525,710	)		(1,045,052	)
Current income taxes		1,335,419			(6,399,981	)
Accrued expenses		(138,318	)		(183,779	)
Other, net		341,261			(107,301	)
Net adjustments		(7,743,016	)		(4,190,033	)
Net cash provided by operating activities		26,073,337			37,881,261
Cash Flows from Investing Activities:
Purchases of fixed maturities, held to maturity		(37,339,004	)		(48,228,392	)
Purchases of fixed maturities, available for sale		(110,149,362	)		(93,483,260	)
Purchases of equity securities		(1,421,238	)		(2,512,570	)
Maturity of fixed maturities:
Held to maturity		10,567,228			15,298,111
Available for sale		77,654,245			47,403,605
Sales of fixed maturities:
Available for sale		30,895,776			45,876,392
Sales of equity securities		976,059			2,145,314
Net sales (purchases) of property and equipment		325			(100	)
Net sales (purchases) of short-term investments, available for sale		12,182,255			(205,257	)
Net cash used in investing activities		(16,633,716	)		(33,706,157	)
Cash Flows from Financing Activities:
Cash dividends paid		(13,689,601	)		(12,523,188	)
Issuance of common stock		1,186,490			12,859,239
Net cash (used in) provided by financing activities		(12,503,111	)		336,051

	Three Months Ended June 30,
	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	$	19,211	$	3,095	$	14,476	$	2,390
Denominator:
Weighted-average shares outstanding		31,473		5,577		30,678		5,577
Basic net income per share	$	0.61	$	0.55	$	0.47	$	0.43

Diluted net income per share:
Numerator:
Allocation of net income	$	19,211	$	3,095	$	14,476	$	2,390
Denominator:
Number of shares used in basic computation		31,473		5,577		30,678		5,577
Weighted-average shares effect of dilutive securities:
Director and employee stock options		305		—		659		—
Unvested restricted stock units		113		—		—		—
Number of shares used in diluted computation		31,891		5,577		31,337		5,577
Diluted net income per share	$	0.60	$	0.55	$	0.46	$	0.43

	Six Months Ended June 30,
	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	$	29,123	$	4,693	$	36,066	$	6,005
Denominator:
Weighted-average shares outstanding		31,451		5,577		30,401		5,577
Basic net income per share	$	0.93	$	0.84	$	1.19	$	1.08

Diluted net income per share:
Numerator:
Allocation of net income	$	29,123	$	4,693	$	36,066	$	6,005
Denominator:
Number of shares used in basic computation		31,451		5,577		30,401		5,577
Weighted-average shares effect of dilutive securities:
Director and employee stock options		346		—		484		—
Unvested restricted stock units		113		—		—		—
Number of shares used in diluted computation		31,910		5,577		30,885		5,577
Diluted net income per share	$	0.91	$	0.84	$	1.17	$	1.08

	Amortized Cost		Estimated Fair Value
	(in thousands)
Held to maturity
Due in one year or less	$	26,143	$	26,081
Due after one year through five years		187,684		178,070
Due after five years through ten years		216,730		207,507
Due after ten years		366,979		336,136
Mortgage-backed securities		7,065		6,971
Total held to maturity	$	804,601	$	754,765

Available for sale
Due in one year or less	$	4,496	$	4,491
Due after one year through five years		30,727		30,390
Due after five years through ten years		107,204		104,584
Due after ten years		59,904		59,186
Mortgage-backed securities		448,128		437,869
Total available for sale	$	650,459	$	636,520

	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

FHLB of Pittsburgh stock purchased and owned	$	1,714,500
Fixed maturity securities pledged, at par (carrying value $39,262,876)		41,228,368
Borrowing capacity currently available		2,143,990

	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	$	20,398	$	—	$	20,398	$	—
Obligations of states and political subdivisions		50,259		—		50,259		—
Corporate securities		127,994		—		127,994		—
Mortgage-backed securities		437,869		—		437,869		—
Equity securities		48,880		46,644		2,236		—
Total investments in the fair value hierarchy	$	685,400	$	46,644	$	638,756	$	—

	At and For the Three Months Ended June 30, 2026				At and For the Three Months Ended June 30, 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	$	783,952	$	1,274	$	706,098	$	1,351
Current period change for expected credit losses				32				23
Balance at end of period	$	803,295	$	1,306	$	737,356	$	1,374

	At and For the Six Months Ended June 30, 2026					At and For the Six Months Ended June 30, 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				(7	)				(14	)
Balance at end of period	$	803,295	$	1,306		$	737,356	$	1,374

	At and For the Three Months Ended June 30, 2026					At and For the Three Months Ended June 30, 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	$	418,091	$	402		$	403,382	$	434
Current period change for expected credit losses				(11	)				(102	)
Balance at end of period	$	413,119	$	391		$	411,125	$	332

Percentage Change in Loss and Loss Expense Reserves Net of Reinsurance	Adjusted Loss and Loss Expense Reserves Net of Reinsurance at June 30, 2026	Percentage Change in Stockholders’ Equity at June 30, 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)%	$648,410	8.5%	$634,676	8.7%
(7.5)	666,421	6.4	652,306	6.5
(5.0)	684,432	4.3	669,936	4.3
(2.5)	702,444	2.1	687,566	2.2
Base	720,455	—	705,196	—
2.5	738,466	(2.1)	722,826	(2.2)
5.0	756,478	(4.3)	740,456	(4.3)
7.5	774,489	(6.4)	758,086	(6.5)
10.0	792,501	(8.5)	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 April 1-30, 2026	Class A – None Class B – None	Class A – None Class B – None	Class A – None Class B – None	(1)

Month #2 May 1-31, 2026	Class A – 152,405 Class B – None	Class A – $17.16 Class B – None	Class A – 152,405 Class B – None	(1)

Month #3 June 1-30, 2026	Class A – 46,582 Class B – None	Class A – $17.16 Class B – None	Class A – 46,582 Class B – None	(1)

Total	Class A – 198,987 Class B – None	Class A – $17.16 Class B – None	Class A – 198,987 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 Certification of Chief Executive Officer	Filed herewith

32.2	Section 1350 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.

August 4, 2026	By:	/s/ Kevin G. Burke
		Kevin G. Burke, President and Chief Executive Officer

August 4, 2026	By:	/s/ Jeffrey D. Miller
		Jeffrey D. Miller, Executive Vice President and Chief Financial Officer

Date:	August 4, 2026	/s/ Kevin G. Burke
		Kevin G. Burke,
		President and Chief Executive Officer

Date: August 4, 2026	/s/ Kevin G. Burke
	Kevin G. Burke, President and Chief Executive Officer