EX-99 2 exh99.txt PRESS RELEASE EXHIBIT 99 ---------- EMC INSURANCE GROUP INC. REPORTS 2005 THIRD QUARTER RESULTS Third Quarter 2005 Net Income Per Share -- $0.61 Net Operating Income Per Share -- $0.56 GAAP Combined Ratio - 100.1% DES MOINES, Iowa (October 27, 2005) - EMC Insurance Group Inc. (Nasdaq/NM:EMCI) today reported record third quarter operating income of $0.56 per share for the quarter ended September 30, 2005 compared to operating income of $0.10 per share for the third quarter of 2004 (1). Operating income for the nine months ended September 30, 2005 was $1.63 per share compared to $0.92 per share for the same period in 2004. Net income, including realized investment gains/losses, was $8,329,000 ($0.61 per share) for the third quarter of 2005 compared to $1,858,000 ($0.16 per share) for the third quarter of 2004. Net income for the nine months ended September 30, 2005 was $23,992,000 ($1.76 per share) compared to $13,673,000 ($1.18 per share) for the same period in 2004. "Though I am pleased to report record third quarter earnings, this achievement is overshadowed by the death and destruction caused by Hurricanes Katrina and Rita," stated President and CEO Bruce G. Kelley. "These devastating acts of nature will have a long-term, and perhaps permanent, impact on the lives of countless numbers of Americans and we extend our deepest sympathy to them." Premiums earned increased 18.1 percent to $103,414,000 for the three months ended September 30, 2005 from $87,588,000 for the same period in 2004. For the nine months ended September 30, 2005, premiums earned increased 21.1 percent to $308,911,000 from $255,031,000 for the same period in 2004. These increases are primarily attributed to the 6.5 percentage point increase in the Company's aggregate participation interest in the EMC Insurance Companies pooling arrangement that became effective January 1, 2005. As a result of this increase, the Company's aggregate participation in the pooling arrangement increased from 23.5 percent to 30.0 percent. The increase in premiums earned also reflects the impact of rate increases that were implemented in the property and casualty insurance business during 2004. On an overall basis, rate competition continued to increase moderately in the property and casualty insurance marketplace during the first nine months of 2005; however, there have been indications of more intense rate competition in select territories and lines of business. Market conditions are expected to remain competitive for the remainder of the year, but some price firming is likely in certain lines of business and regions of the country due to the severe hurricane season. Investment income increased 37.6 percent to $10,573,000 for the three months and 36.1 percent to $29,705,000 for the nine months ended September 30, 2005 from $7,683,000 and $21,823,000 for the same periods in 2004. These increases are primarily attributed to additional interest income earned on $107,801,000 of cash received from Employers Mutual Casualty Company in the first quarter of 2005 in connection with the change in the pooling arrangement and the $34,890,000 of net proceeds received in October 2004 from the Company's follow-on stock offering. The Company experienced $5,113,000 ($0.24 per share after tax) of favorable development on prior years' reserves during the third quarter of 2005 compared to adverse development of $2,512,000 ($0.14 per share after tax) in the third quarter of 2004. For the first nine months of 2005, the Company had favorable development on prior years' reserves of $8,948,000 ($0.43 per share after tax) compared to adverse development of $4,719,000 ($0.27 per share after tax) for the same period in 2004. The adverse development for the first nine months of 2004 includes $3,528,000 ($0.20 per share after tax) of bulk loss and settlement expense reserves that were established as a result of actuarial evaluations of the carried reserves in the property and casualty insurance segment. Catastrophe and storm losses increased 33.5 percent to $14,402,000 ($0.69 per share after tax) in the third quarter of 2005 from $10,790,000 ($0.61 per share after tax) in the third quarter of 2004. For the first nine months of 2005, catastrophe and storm losses totaled $23,008,000 ($1.10 per share after tax) compared to $19,002,000 ($1.07 per share after tax) for the same period in 2004. Total losses attributable to Hurricanes Katrina and Rita, including the effect of reinsurance reinstatement premiums and related commissions, amounted to $9,000,000 ($0.43 per share after tax). The Company's GAAP combined ratio was 100.1 percent in the third quarter of 2005 compared to 107.6 percent in the third quarter of 2004. For the first nine months of 2005, the GAAP combined ratio was 99.6 percent compared to 102.8 percent for the same period in 2004. At September 30, 2005, consolidated assets totaled $1.1 billion, including $0.9 billion in the investment portfolio; stockholders' equity was $246.1 million; and net book value of the Company's stock was $18.07 per share, an increase of 7.3 percent from $16.84 per share at December 31, 2004. Management lowered its 2005 operating earnings guidance to a range of $1.95 per share to $2.10 per share on October 11, 2005 as a result of the significant amount of catastrophe losses experienced during the third quarter. Based on current information, management reaffirms this revised guidance. The Company will host an earnings call on October 27, 2005. The teleconference will begin at 10:00 a.m. eastern time. Dial-in information for the call is toll-free 1-800-638-4930, passcode number 91828740. The event will be archived and available for digital replay through November 3, 2005. The replay access information is toll-free 1-888-286-8010; passcode number 31183790. A webcast of the teleconference will be presented by Thomson Financial and can be accessed at http://my.ccbn.com or from the Company's investor relations page at www.emcinsurance.com. The archived webcast will be available for one year. A transcript of the teleconference will also be available on the Company's website shortly after the completion of the teleconference. EMC Insurance Group Inc., the publicly-held insurance holding company of EMC Insurance Companies, owns subsidiaries with operations in property and casualty insurance and reinsurance. EMC Insurance Companies is one of the largest property and casualty entities in Iowa and among the top 60 insurance entities nationwide. For more information, visit our website www.emcinsurance.com. The Private Securities Litigation Reform Act of 1995 provides issuers the opportunity to make cautionary statements regarding forward-looking statements. Accordingly, any forward-looking statement contained in this report is based on management's current beliefs, assumptions and expectations of the Company's future performance, taking into account all information currently available to management. These beliefs, assumptions and expectations can change as the result of many possible events or factors, not all of which are known to management. If a change occurs, the Company's business, financial condition, liquidity, results of operations, plans and objectives may vary materially from those expressed in the forward-looking statements. The risks and uncertainties that may affect the actual results of the Company include, but are not limited to the following: catastrophic events and the occurrence of significant severe weather conditions; the adequacy of loss and settlement expense reserves; state and federal legislation and regulations; changes in our industry, interest rates or the performance of financial markets and the general economy; rating agency actions and other risks and uncertainties inherent to the Company's business. When the Company uses the words "believe", "expect", "anticipate", "estimate", or similar expressions, it intends to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. (1)The Company uses a non-GAAP financial measure called "operating income" that management believes is useful to investors because it illustrates the performance of our normal, ongoing operations, which is important in understanding and evaluating our financial condition and results of operations. While this measure is consistent with measures utilized by investors to evaluate performance, it is not a substitute for the U.S. GAAP financial measure of net income. Therefore, the Company has provided a reconciliation of this non-GAAP financial measure to the U.S. GAAP financial measure of net income in the Consolidated Statements of Income schedule contained in this release. Management also uses non-GAAP financial measures for goal setting, determining employee and senior management awards and compensation, and evaluating performance. CONSOLIDATED STATEMENT OF INCOME - UNAUDITED Property Quarter Ended and Casualty Parent September 30,2005 Insurance Reinsurance Company Consolidated ----------------------------------------------------------------------------- Revenues: Premiums earned ..... $ 79,810,370 $ 23,603,919 $ - $ 103,414,289 Investment income, net ............... 7,718,777 2,806,335 48,106 10,573,218 Other income ........ 150,022 - - 150,022 ------------ ------------ ------------ -------------- 87,679,169 26,410,254 48,106 114,137,529 ------------ ------------ ------------ -------------- Losses and expenses: Losses and settlement expenses .......... 53,698,678 15,892,060 - 69,590,738 Dividends to policyholders ..... 2,414,677 - - 2,414,677 Amortization of deferred policy acquisition costs 17,008,632 4,540,691 - 21,549,323 Other underwriting expenses .......... 8,067,446 1,871,146 - 9,938,592 Interest expense .... 193,125 84,975 - 278,100 Other expenses ...... 191,483 - 148,349 339,832 ------------ ------------ ------------ -------------- 81,574,041 22,388,872 148,349 104,111,262 ------------ ------------ ------------ -------------- Operating income (loss) before income taxes .... 6,105,128 4,021,382 (100,243) 10,026,267 ------------ ------------ ------------ -------------- Realized investment gains ............... 1,118,975 65,974 - 1,184,949 ------------ ------------ ------------ -------------- Income (loss) before income taxes ........... 7,224,103 4,087,356 (100,243) 11,211,216 ------------ ------------ ------------ -------------- Income tax expense (benefit): Current ........... 2,050,209 1,567,701 (34,798) 3,583,112 Deferred .......... (122,216) (578,401) - (700,617) ------------ ------------ ------------ -------------- 1,927,993 989,300 (34,798) 2,882,495 ------------ ------------ ------------ -------------- Net income (loss) $ 5,296,110 $ 3,098,056 $ (65,445)$ 8,328,721 ============ ============ ============ ============== Average shares outstanding ......... 13,609,562 Per Share Data: --------------- Net income (loss) per share - basic and diluted $ 0.39 $ 0.23 $ (0.01)$ 0.61 Decrease in provision for insured events of prior years (after tax) .............. $ 0.23 $ 0.01 $ - $ 0.24 Catastrophe and storm losses (after tax) $ (0.56)$ (0.13)$ - $ (0.69) Dividends per share $ 0.15 Other Information of Interest: -------------------- Written premium ..... $ 95,774,591 $ 23,892,322 $ - $ 119,666,913 Decrease in provision for insured events of prior years ....... $ (4,772,990)$ (339,822)$ - $ (5,112,812) Catastrophe and storm losses ............ $ 11,582,361 $ 2,820,052 $ - $ 14,402,413 GAAP Combined Ratio: Loss ratio ........ 67.3% 67.3% - 67.3% Expense ratio ..... 34.4% 27.2% - 32.8% ------------ ------------ ------------ -------------- 101.7% 94.5% - 100.1% ============ ============ ============ ============== Property Quarter Ended and Casualty Parent September 30,2004 Insurance Reinsurance Company Consolidated ----------------------------------------------------------------------------- Revenues: Premiums earned ..... $ 63,339,332 $ 24,248,659 $ - $ 87,587,991 Investment income, net ............... 5,321,217 2,329,909 31,926 7,683,052 Other income ........ 136,227 - - 136,227 ------------ ------------ ------------ -------------- 68,796,776 26,578,568 31,926 95,407,270 ------------ ------------ ------------ -------------- Losses and expenses: Losses and settlement expenses .......... 51,926,670 13,764,894 - 65,691,564 Dividends to policyholders ..... 1,127,104 - - 1,127,104 Amortization of deferred policy acquisition costs 13,177,289 5,119,890 - 18,297,179 Other underwriting expenses .......... 6,641,026 2,466,417 - 9,107,443 Interest expense .... 193,125 84,975 - 278,100 Other expenses ...... 171,959 - 140,289 312,248 ------------ ------------ ------------ -------------- 73,237,173 21,436,176 140,289 94,813,638 ------------ ------------ ------------ -------------- Operating income (loss) before income taxes .... (4,440,397) 5,142,392 (108,363) 593,632 ------------ ------------ ------------ -------------- Realized investment gains ............... 785,491 262,627 - 1,048,118 ------------ ------------ ------------ -------------- Income (loss) before income taxes ........... (3,654,906) 5,405,019 (108,363) 1,641,750 ------------ ------------ ------------ -------------- Income tax expense (benefit): Current ........... (1,681,367) 1,956,321 (35,863) 239,091 Deferred .......... (45,261) (407,616) (2,924) (455,801) ------------ ------------ ------------ -------------- (1,726,628) 1,548,705 (38,787) (216,710) ------------ ------------ ------------ -------------- Net income (loss) $ (1,928,278)$ 3,856,314 $ (69,576)$ 1,858,460 ============ ============ ============ ============== Average shares outstanding ......... 11,561,870 Per Share Data: --------------- Net income (loss) per share - basic and diluted $ (0.16)$ 0.33 $ (0.01)$ 0.16 (Increase) decrease in provision for insured events of prior years (after tax) .............. $ (0.34)$ 0.20 $ - $ (0.14) Catastrophe and storm losses (after tax) $ (0.28)$ (0.33)$ - $ (0.61) Dividends per share $ 0.15 Other Information of Interest: -------------------- Written premium ..... $ 76,232,406 $ 23,793,866 $ - $ 100,026,272 Increase (decrease) in provision for insured events of prior years ....... $ 6,017,129 $ (3,504,920)$ - $ 2,512,209 Catastrophe and storm losses ............ $ 4,931,161 $ 5,859,245 $ - $ 10,790,406 GAAP Combined Ratio: Loss ratio ........ 82.0% 56.8% - 75.0% Expense ratio ..... 33.1% 31.3% - 32.6% ------------ ------------ ------------ -------------- 115.1% 88.1% - 107.6% ============ ============ ============ ============== Property Nine Months Ended and Casualty Parent September 30, 2005 Insurance Reinsurance Company Consolidated ----------------------------------------------------------------------------- Revenues: Premiums earned ..... $240,705,969 $ 68,204,599 $ - $ 308,910,568 Investment income, net ............... 21,548,347 7,966,786 190,332 29,705,465 Other income ........ 393,692 - - 393,692 ------------ ------------ ------------ -------------- 262,648,008 76,171,385 190,332 339,009,725 ------------ ------------ ------------ -------------- Losses and expenses: Losses and settlement expenses .......... 159,948,086 46,029,336 - 205,977,422 Dividends to policyholders ..... 4,756,749 - - 4,756,749 Amortization of deferred policy acquisition costs 53,704,211 14,053,073 - 67,757,284 Other underwriting expenses .......... 24,206,788 4,823,565 - 29,030,353 Interest expense .... 579,375 254,925 - 834,300 Other expenses ...... 610,332 - 644,020 1,254,352 ------------ ------------ ------------ -------------- 243,805,541 65,160,899 644,020 309,610,460 ------------ ------------ ------------ -------------- Operating income (loss) before income taxes .... 18,842,467 11,010,486 (453,688) 29,399,265 ------------ ------------ ------------ -------------- Realized investment gains (losses) ...... 2,797,636 (51,008) - 2,746,628 ------------ ------------ ------------ -------------- Income (loss) before income taxes ........... 21,640,103 10,959,478 (453,688) 32,145,893 ------------ ------------ ------------ -------------- Income tax expense (benefit): Current ........... 8,137,913 2,909,673 (178,637) 10,868,949 Deferred .......... (2,528,953) (205,064) 18,986 (2,715,031) ------------ ------------ ------------ -------------- 5,608,960 2,704,609 (159,651) 8,153,918 ------------ ------------ ------------ -------------- Net income (loss) $ 16,031,143 $ 8,254,869 $ (294,037)$ 23,991,975 ============ ============ ============ ============== Average shares outstanding ......... 13,598,955 Per Share Data: --------------- Net income (loss) per share - basic and diluted $ 1.17 $ 0.61 $ (0.02)$ 1.76 Decrease in provision for insured events of prior years (after tax) .............. $ 0.43 $ - $ - $ 0.43 Catastrophe and storm losses (after tax) $ (0.91)$ (0.19)$ - $ (1.10) Dividends per share $ 0.45 Book value per share $ 18.07 Effective tax rate .... 25.4% Net income as a percent of beg. SH equity (annualized) 14.0% Other Information of Interest: -------------------- Written premium ..... $285,981,321 $ 66,899,913 $ - $ 352,881,234 Decrease in provision for insured events of prior years ....... $ (8,875,923)$ (72,467)$ - $ (8,948,390) Catastrophe and storm losses ............ $ 19,122,482 $ 3,885,723 $ - $ 23,008,205 GAAP Combined Ratio: Loss ratio ........ 66.4% 67.5% - 66.7% Expense ratio ..... 34.4% 27.7% - 32.9% ------------ ------------ ------------ -------------- 100.8% 95.2% - 99.6% ============ ============ ============ ============== Property Nine Months Ended and Casualty Parent September 30, 2004 Insurance Reinsurance Company Consolidated ----------------------------------------------------------------------------- Revenues: Premiums earned ..... $186,908,651 $ 68,121,909 $ - $ 255,030,560 Investment income, net ............... 14,841,998 6,922,873 57,821 21,822,692 Other income ........ 477,818 - - 477,818 ------------ ------------ ------------ -------------- 202,228,467 75,044,782 57,821 277,331,070 ------------ ------------ ------------ -------------- Losses and expenses: Losses and settlement expenses .......... 136,797,010 43,503,180 - 180,300,190 Dividends to policyholders ..... 2,990,727 - - 2,990,727 Amortization of deferred policy acquisition costs 40,371,870 14,245,132 - 54,617,002 Other underwriting expenses .......... 20,302,061 4,080,251 - 24,382,312 Interest expense .... 579,375 254,925 - 834,300 Other expenses ...... 580,422 - 474,781 1,055,203 ------------ ------------ ------------ -------------- 201,621,465 62,083,488 474,781 264,179,734 ------------ ------------ ------------ -------------- Operating income (loss) before income taxes .... 607,002 12,961,294 (416,960) 13,151,336 ------------ ------------ ------------ -------------- Realized investment gains ............... 3,527,524 1,102,229 - 4,629,753 ------------ ------------ ------------ -------------- Income (loss) before income taxes ........... 4,134,526 14,063,523 (416,960) 17,781,089 ------------ ------------ ------------ -------------- Income tax expense (benefit): Current ........... 440,163 4,460,567 (348,901) 4,551,829 Deferred .......... (306,207) (340,130) 202,106 (444,231) ------------ ------------ ------------ -------------- 133,956 4,120,437 (146,795) 4,107,598 ------------ ------------ ------------ -------------- Net income (loss) $ 4,000,570 $ 9,943,086 $ (270,165)$ 13,673,491 ============ ============ ============ ============== Average shares outstanding ......... 11,547,544 Per Share Data: --------------- Net income (loss) per share - basic and diluted $ 0.34 $ 0.86 $ (0.02)$ 1.18 (Increase) decrease in provision for insured events of prior years (after tax) .............. $ (0.54)$ 0.28 $ - $ (0.26) Catastrophe and storm losses (after tax) $ (0.72)$ (0.35)$ - $ (1.07) Dividends per share $ 0.45 Book value per share $ 16.43 Effective tax rate .... 23.1% Net income as a percent of beg. SH equity (annualized) ........ 10.1% Other Information of Interest: -------------------- Written premium ..... $203,376,393 $ 70,313,393 $ - $ 273,689,786 Increase (decrease) in provision for insured events of prior years ....... $ 9,706,229 $ (4,986,820)$ - $ 4,719,409 Catastrophe and storm losses ............ $ 12,833,109 $ 6,168,986 $ - $ 19,002,095 GAAP Combined Ratio: Loss ratio ........ 73.2% 63.9% - 70.7% Expense ratio ..... 34.1% 26.9% - 32.1% ------------ ------------ ------------ -------------- 107.3% 90.8% - 102.8% ============ ============ ============ ============== NET WRITTEN PREMIUMS Three Months Ended September 30, 2005 -------------------------------------------- Percent of Increase/(Decrease) Percent of Net in Net Written Written Premiums Premiums ---------------- ------------------ Property and Casualty Insurance Commercial Lines: Automobile .................. 16.7% (1.9%) Liability ................... 16.6% 2.3% Property .................... 16.1% 2.6% Workers' Compensation ....... 17.5% (4.7%) Other ....................... 1.9% 25.0% -------- Total ..................... 68.8% 0.0% Personal Lines: Automobile .................. 5.7% (12.9%) Property .................... 5.3% (7.7%) Liability ................... 0.2% 1.3% -------- Total ..................... 11.2% (10.3%) Reinsurance .................... 20.0% (0.4%) -------- Total ..................... 100.0% ======== Nine Months Ended September 30, 2005 -------------------------------------------- Percent of Increase/(Decrease) Percent of Net in Net Written Written Premiums (a) Premiums (a) ------------------ ------------------ Property and Casualty Insurance Commercial Lines: Automobile .................. 17.8% (2.4%) Liability ................... 16.8% 3.6% Property .................... 15.2% 2.9% Workers' Compensation ....... 15.3% (3.6%) Other ....................... 1.8% 22.7% -------- Total ..................... 66.9% 0.5% Personal Lines: Automobile .................. 6.8% (12.1%) Property .................... 5.4% (4.4%) Liability ................... 0.2% 3.3% -------- Total ..................... 12.4% (8.7%) Reinsurance .................... 20.7% (4.9%) -------- Total ..................... 100.0% ======== (a) Excludes January 1, 2005 portfolio adjustment of $29,630,612 related to the change in the Company's aggregate participation in the pooling arrangement. CONSOLIDATED BALANCE SHEETS - UNAUDITED September 30, December 31, 2005 2004 -------------- ------------ ASSETS Investments: Fixed maturities: Securities held-to-maturity, at amortized cost (fair value $17,786,192 and $16,908,726) ............................. $ 17,275,657 $ 15,895,607 Securities available-for-sale, at fair value (amortized cost $746,156,565 and $541,401,950) ............................. 762,785,981 565,000,931 Fixed maturity securities on loan: Securities held-to-maturity, at amortized cost (fair value $2,683,444 and $13,684,880) ............................. 2,625,611 13,310,264 Securities available-for-sale, at fair value (amortized cost $1,343,381 and $54,389,046) ............................ 1,379,635 54,653,472 Equity securities available-for-sale, at fair value (cost $62,382,022 and $59,589,434) ... 87,193,363 78,692,893 Other long-term investments, at cost ......... 4,340,451 5,550,093 Short-term investments, at cost .............. 48,432,174 46,238,853 -------------- ------------ Total investments ........................ 924,032,872 779,342,113 Balances resulting from related party transactions with Employers Mutual: Reinsurance receivables ................... 42,154,166 26,316,358 Prepaid reinsurance premiums .............. 5,556,024 3,682,676 Deferred policy acquisition costs ......... 37,694,582 27,940,583 Defined benefit retirement plan, prepaid asset ................................... 1,645,822 2,684,463 Other assets .............................. 2,614,694 1,877,564 Indebtedness of related party ............. 28,569,359 - Cash ........................................... 242,906 61,088 Accrued investment income ...................... 9,869,383 8,726,292 Accounts receivable (net of allowance for uncollectible accounts of $0 and $0) ......... 227,472 216,836 Income taxes recoverable ....................... - 3,399,485 Deferred income taxes .......................... 12,740,673 9,504,193 Goodwill, at cost less accumulated amortization of $2,616,234 and $2,616,234 ................. 941,586 941,586 Securities lending collateral .................. 4,229,328 70,122,695 -------------- ------------ Total assets ............................ $1,070,518,867 $934,815,932 ============== ============ LIABILITIES Balances resulting from related party transactions with Employers Mutual: Losses and settlement expenses ........... $ 556,081,348 $429,677,302 Unearned premiums ........................ 177,482,037 131,589,365 Other policyholders' funds ............... 3,871,503 2,825,809 Surplus notes payable .................... 36,000,000 36,000,000 Indebtedness to related party ............ - 6,058,848 Employee retirement plans ................ 13,208,712 9,764,406 Other liabilities ........................ 32,426,459 20,304,475 Income taxes payable ........................... 1,101,283 - Securities lending obligation .................. 4,229,328 70,122,695 -------------- ------------ Total liabilities ...................... 824,400,670 706,342,900 -------------- ------------ STOCKHOLDERS' EQUITY Common stock, $1 par value, authorized 20,000,000 shares; issued and outstanding, 13,617,005 shares in 2005 and 13,568,945 shares in 2004 ........ 13,617,005 13,568,945 Additional paid-in capital ..................... 104,335,075 103,467,293 Accumulated other comprehensive income ......... 26,960,056 27,928,463 Retained earnings .............................. 101,206,061 83,508,331 -------------- ------------ Total stockholders' equity ............... 246,118,197 228,473,032 -------------- ------------ Total liabilities and stockholders' equity $1,070,518,867 $934,815,932 ============== ============ The Company had total cash and invested assets with a carrying value of $924.3 million and $779.4 million as of September 30, 2005 and December 31, 2004, respectively. The following table summarizes the Company's cash and invested assets as of the dates indicated: Percent of ($ in thousands) Amortized Total at Carrying September 30, 2005 Cost Fair Value Fair Value Value ------------------- --------- ---------- ---------- -------- Fixed maturities, held-to-maturity .... $ 19,901 $ 20,470 2.2% $ 19,901 Fixed maturities, available-for-sale .. 747,500 764,166 82.6% 764,166 Equity securities, available-for-sale .. 62,382 87,193 9.4% 87,193 Cash .................. 243 243 - 243 Short-term investments 48,432 48,432 5.3% 48,432 Other long-term investments ......... 4,340 4,340 0.5% 4,340 -------- -------- ----- -------- $882,798 $924,844 100.0% $924,275 ======== ======== ===== ======== Percent of ($ in thousands) Amortized Total at Carrying December 31, 2004 Cost Fair Value Fair Value Value ------------------- --------- ---------- ---------- -------- Fixed maturities, held-to-maturity .... $ 29,206 $ 30,594 3.9% $ 29,206 Fixed maturities, available-for-sale .. 595,791 619,654 79.4% 619,654 Equity securities, available-for-sale .. 59,589 78,693 10.1% 78,693 Cash .................. 61 61 - 61 Short-term investments 46,239 46,239 5.9% 46,239 Other long-term investments ......... 5,550 5,550 0.7% 5,550 -------- -------- ----- -------- $736,436 $780,791 100.0% $779,403 ======== ======== ===== ======== The amortized cost and estimated fair values of fixed maturity and equity securities at September 30, 2005 were as follows: Held-To-Maturity ---------------------------------------------- Gross Gross Estimated Amortized Unrealized Unrealized Fair ($ in thousands) Cost Gains Losses Value --------- ---------- ---------- --------- U.S. treasury securities and obligations of U.S. government corporations and agencies ............. $ 19,018 $ 499 $ - $ 19,517 Mortgage-backed securities 883 70 - 953 --------- ---------- ---------- --------- Total securities held-to-maturity ..... $ 19,901 $ 569 $ - $ 20,470 ========= ========== ========== ========= Available-For-Sale ---------------------------------------------- Gross Gross Estimated Amortized Unrealized Unrealized Fair ($ in thousands) Cost Gains Losses Value --------- ---------- ---------- --------- U.S. treasury securities and obligations of U.S. government corporations and agencies ............. $ 297,464 $ 35 $ 2,052 $ 295,447 Obligations of states and political subdivisions ... 251,065 11,033 42 262,056 Mortgage-backed securities 10,176 457 - 10,633 Public utilities ........... 6,004 582 - 6,586 Debt securities issued by foreign governments ...... 7,078 129 - 7,207 Corporate securities ....... 175,713 7,345 821 182,237 ---------- ---------- ---------- --------- Total fixed maturity securities ........... 747,500 19,581 2,915 764,166 ---------- ---------- ---------- --------- Equity securities Common stocks ............ 61,882 25,950 1,149 86,683 Non-redeemable preferred stocks ................. 500 10 - 510 ---------- ---------- ---------- --------- Total equity securities .. 62,382 25,960 1,149 87,193 ---------- ---------- ---------- --------- Total securities available-for-sale $ 809,882 $ 45,541 $ 4,064 $ 851,359 ========== ========== ========== =========