Pennsylvania-based Donegal Group Inc.reported that net income for year ended December 31, 2004 reached an historic high for the company.
Net income for the year ended December 31, 2004 was $31,614,269, compared to $18,293,976, for the year ended December 31, 2003, an increase of 72.8%. On a fully diluted per share basis net income for 2004 was $2.32 per share, based on 13,635,172 weighted average shares outstanding, compared to $1.85 per share, based on 9,894,844 weighted average shares outstanding for the year ended December 31, 2003. Net income for 2004 includes an extraordinary gain of $5,445,670, or $.40 per share on a diluted basis, related to an acquisition in the first quarter of 2004.
Net income for the quarter ended December 31, 2004 was $7,224,890, compared to $5,179,206 for the fourth quarter of 2003, an increase of 39.5%. On a fully diluted per share basis net income for the fourth quarter of 2004 was $.53 per share, based on 13,751,938 weighted average shares outstanding, compared to $.47 per share, based on 11,065,320 weighted shares outstanding, for the fourth quarter of 2003. The company’s December 2003 public offering of 3,450,000 shares of Class A Common Stock was the principal reason for the increase in the weighted average number of shares outstanding.
The company’s combined ratio for the full year 2004 was 93.1% compared to a combined ratio of 95.0% for 2003. The loss ratio for the full year 2004 improved to 61.7% compared to 64.2% for 2003. The expense ratio increased slightly to 30.9% for all of 2004 compared to 30.2% for 2003.
The company posted a combined ratio of 92.7% for the fourth quarter of 2004 compared to a combined ratio of 93.8% for the comparable period in 2003.
“Solid premium growth and excellent underwriting results, from both our historic insurance subsidiaries and our 2004 acquisitions, combined to achieve the highest levels of profitability in the company’s history,” stated Donald H. Nikolaus, president and chief executive officer of the Donegal Companies.
Revenues for the fourth quarter of 2004 were $75,480,902, an increase of 35.5% over a year earlier, with premiums earned for the fourth quarter of $69,682,332, a 37.4% increase over the fourth quarter of 2003. Premiums earned in the fourth quarter of 2004, excluding premiums earned by the companies we acquired in January 2004, increased $5.0 million, or 9.8%, to $55,676,742.
Investment income for the fourth quarter of 2004 was $4,266,222, an increase of $248,307, or 6.2%, over investment income in the third quarter of 2004. This increase was accomplished despite the shift towards tax-exempt investment income, with tax-exempt interest representing 46.7% of total investment income in the fourth quarter of 2004 compared to 41.3% in the fourth quarter of 2003.
These results helped the company increase its book value per common share to $18.04 per share as of December 31, 2004, compared to $16.29 per share at December 31, 2003.
Donegal Group Inc. is an insurance holding company whose insurance subsidiaries offer personal and commercial property and casualty lines of insurance in six Mid-Atlantic states (Connecticut, Delaware, Maryland, New Hampshire, New York and Pennsylvania), eight Southeastern states (Alabama, Georgia, Louisiana, North Carolina, South Carolina, Tennessee, Virginia and West Virginia) and five Midwestern states (Iowa, Nebraska, Ohio, Oklahoma and South Dakota).
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