SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
-----------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to ___________________
Commission file number 0-22316
-------------
Penn-America Group, Inc.
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2731409
- ---------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
420 South York Road, Hatboro, Pennsylvania 19040
-----------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(215) 443-3600
-----------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such other period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No .
----- ----
At May 10, 2000, 7,549,917 shares of the registrant's common stock, $.01 par
value, were outstanding.
Page 1
<PAGE>
Penn-America Group, Inc. and SubsidiarIES
Index
Page Number
Part I - Financial Information
Consolidated Unaudited Balance Sheets - March 31, 2000 and
December 31, 1999 3
Consolidated Unaudited Statements of Earnings - For the three
months ended March 31, 2000 and 1999 4
Consolidated Unaudited Statement of Stockholders' Equity -
For the three months ended March 31, 2000 5
Consolidated Unaudited Statements of Cash Flows -
For the three months ended March 31, 2000 and 1999 6
Notes to Unaudited Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 13
Part II - Other Information 16
Page 2
<PAGE>
<TABLE>
<CAPTION>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share data)
March 31, December 31,
2000 1999
---------------- -----------------
ASSETS
<S> <C> <C>
Investments:
Fixed maturities:
Available for sale, at fair value (amortized cost 2000, $113,932; 1999, $ 110,725 $ 111,419
$115,975)
Held to maturity, at amortized cost (fair value 2000, $23,051; 1999, $16,103) 23,231 16,294
Equity securities, at fair value (cost 2000, $28,058; 1999, $28,014) 25,754 26,020
Short-term investments, at cost, which approximates fair value -- 449
---------------- -----------------
Total investments 159,710 154,182
Cash 7,227 12,045
Receivables:
Accrued investment income 2,301 1,965
Premiums receivable, net 10,848 8,981
Reinsurance recoverable 19,935 18,284
---------------- -----------------
Total receivables 33,084 29,230
Prepaid reinsurance premiums 3,753 3,529
Deferred policy acquisition costs 9,842 9,306
Capital lease 1,818 1,840
Deferred income taxes 5,127 5,487
Income tax recoverable -- 1,652
Other assets 417 511
---------------- -----------------
Total assets $220,978 $ 217,782
================ =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses $ 95,050 $ 93,719
Unearned premiums 38,411 36,332
Accounts payable and accrued expenses 2,020 1,755
Capitalized lease obligation 1,787 1,821
Other liabilities 4,008 3,537
Income tax payable 361 --
---------------- -----------------
Total liabilities 141,637 137,164
---------------- -----------------
Stockholders' equity:
Preferred stock, $.01 par value; authorized 2,000,000 shares;
none issued -- --
Common stock, $.01 par value; authorized 20,000,000 shares;
issued 2000 and 1999, 9,990,436 shares, outstanding 2000,
7,719,161 and 1999, 8,062,861 shares 100 100
Additional paid-in capital 69,591 69,591
Accumulated other comprehensive loss (3,638) (4,324)
Retained earnings 36,213 35,050
Treasury stock, 2000, 2,271,275 shares; 1999, 1,927,575 shares, at cost (22,122) (19,474)
Officers' stock loans (508) --
Unearned compensation from restricted stock awards (295) (325)
---------------- -----------------
Total stockholders' equity 79,341 80,618
---------------- -----------------
Total liabilities and stockholders' equity $ 220,978 $ 217,782
================ =================
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
Page 3
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(Unaudited)
For the three months ended March 31, 2000 and 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended March 31,
2000 1999
-------------- ---------------
Revenues:
<S> <C> <C>
Premiums earned $ 21,546 $ 21,462
Net investment income 2,400 2,410
Net realized investment (losses) gains (13) 556
-------------- ---------------
Total revenues 23,933 24,428
-------------- ---------------
Losses and expenses:
Losses and loss adjustment expenses 13,905 13,724
Amortization of deferred policy acquisition costs 6,239 6,153
Other underwriting expenses 1,650 1,453
Interest expense 36 36
-------------- ---------------
Total losses and expenses 21,830 21,366
-------------- ---------------
Earnings before income tax 2,103 3,062
Income tax 520 853
-------------- ---------------
Net earnings $ 1,583 $ 2,209
============== ===============
Net earnings per share:
Basic $0.20 $0.24
Diluted $0.20 $0.24
Weighted average number of shares outstanding:
Basic 7,972 9,129
Diluted 8,010 9,204
Cash dividends per share .0525 $0.0525
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
Page 4
<PAGE>
<TABLE>
<CAPTION>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
(Unaudited)
For the three months ended March 31, 2000
(In thousands, except share data)
Unearned
Compensation
Accumulated From
Common Stock Additional Other Officers' Restricted
------------------- Paid-In Comprehensive Retained Treasury Stock Stock
Shares Amount Capital Income (Loss) Earnings Stock Loans Awards Total
--------- ------- --------- ------------- -------- -------- --------- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1999 9,990,436 $ 100 $ 69,591 $(4,324) $35,050 $(19,474) - $ (325) $ 80,618
Net earnings 1,583 1,583
Other comprehensive
income, net of tax:
Unrealized gains on
investments, net of
reclassification adjustment 686 686
------
Comprehensive income 2,269
------
Officers' stock loans (508) (508)
Amortization of compensation
expense from restricted
stock awards issued 30 30
Cash dividends paid
($0.0525 per share) (420) (420)
Purchase of treasury stock,
343,700 shares (2,648) (2,648)
----------------------------------------------------------------------------------------------------
Balance at March 31, 2000 9,990,436 $100 $ 69,591 $(3,638) $ 36,213 $(22,122) (508) $ (295) $ 79,341
====================================================================================================
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
Page 5
<PAGE>
<TABLE>
<CAPTION>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
For the three months ended March 31, 2000 and 1999
(In thousands)
Three months ended March 31,
2000 1999
-------- --------
Cash flows from operating activities:
<S> <C> <C>
Net earnings $ 1,583 $ 2,209
Adjustments to reconcile net earnings to net cash provided by operating
Amortization and depreciation expense 154 190
Net realized investment losses / (gains) 13 (556)
Deferred income tax 7 (114)
Net decrease in premiums receivable, prepaid reinsurance premiums
and unearned premiums (12) (1,197)
Net (decrease) / increase in unpaid losses and loss adjustment expenses
and reinsurance recoverable (323) 312
(Increase) decrease in:
Accrued investment income (335) (317)
Deferred policy acquisition costs (536) 36
Income tax recoverable 1,652 884
Other assets 52 46
Increase (decrease) in:
Accounts payable and accrued expenses 265 (341)
Income taxes payable -- 83
Other liabilities 833 252
-------- --------
Net cash provided by operating activities 3,353 1,487
-------- --------
Cash flows from investing activities:
Purchases of equity securities (2,260) (5,179)
Purchases of fixed maturities available for sale (8,276) (13,013)
Purchases of fixed maturities held to maturity (9,899) (1,058)
Proceeds from sales of equity securities 2,736 2,131
Proceeds from sales and maturities of fixed maturities available for sale 9,689 3,948
Proceeds from maturities and calls of fixed maturities held to maturity 3,000 5,773
Change in short-term investments 449 997
-------- --------
Net cash used by investing activities (4,561) (6,401)
-------- --------
Cash flows from financing activities:
Purchase of treasury stock (2,648) (7,309)
Principal payments on capital lease obligations (34) (34)
Officers' stock loans (508) --
Dividends paid (420) (448)
-------- --------
Net cash used by financing activities (3,610) (7,791)
-------- --------
Decrease in cash (4,818) (12,705)
Cash, beginning of period 12,045 24,077
-------- --------
Cash, end of period $ 7,227 $ 11,372
======== ========
Supplemental disclosure of cash flow information:
Cash paid (recovered) during the period for:
Interest paid $ 36 $ 36
Income taxes recovered $ 1,500 --
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
Page 6
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
Note 1 - Organization and Basis of Presentation
Penn-America Group, Inc. ("PNG") is an insurance holding company whose
principal asset is the common stock of Penn-America Insurance Company
("Penn-America"). The "Company" refers to PNG and Penn-America, as well as to
Penn-America's wholly-owned subsidiary, Penn-Star Insurance Company. Penn
Independent Corporation ("Penn Independent") currently owns approximately 40.0%
of the outstanding common stock of PAGI as of March 31, 2000.
The accompanying unaudited consolidated financial statements should be
read in conjunction with the financial statements and notes for the year ended
December 31, 1999. In the opinion of management, the financial information
reflects all adjustments (consisting only of normal recurring adjustments) which
are necessary for a fair presentation of the Company's financial position,
results of operations, and cash flows for the interim periods. The Company's
results of operations for interim periods are not necessarily indicative of the
results to be expected for the entire year.
Note 2 - Reinsurance
Premiums earned are net of amounts ceded to reinsurers of $2.6 million
and $1.7 million for the three months ended March 31, 2000 and 1999,
respectively. Losses and loss adjustment expenses are net of amounts ceded to
reinsurers of $1.9 million and $600,000 for the three months ended March 31,
2000 and 1999, respectively.
Note 3 - Comprehensive Income
Accumulated other comprehensive income of the Company consists solely
of net unrealized (losses) gains on investment securities.
Page 7
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
(continued)
The following are components of other comprehensive income / (losses) (in
thousands):
<TABLE>
<CAPTION>
Three months ended March 31, 2000
----------------------------------------------
Before Tax Tax Net of Tax
Amount Expense Amount
------- ------- -------
<S> <C> <C> <C>
Unrealized gains on investments: $1,026 $ (349) $ 677
Unrealized holding gains arising
Add: reclassification adjustment for 13 (4) 9
------ ------ ------
Other comprehensive income $1,039 $ (353) $ 686
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Three months ended March 31, 1999
----------------------------------------------
Before Tax Tax Net of Tax
Amount Expense Amount
------- ------- -------
<S> <C> <C> <C>
Unrealized losses on investments: $(1,468) $ 499 $ (969)
Unrealized holding losses arising
Less: reclassification adjustment for (556) 189 (367)
------- ------- -------
Other comprehensive loss $(2,024) $ 688 $(1,336)
======= ======= =======
</TABLE>
For the three months ended March 31, 2000 and 1999, comprehensive income of
$2,269,000 and $873,000 consisted of net income of $1,583,000 and $2,209,000 and
other comprehensive income of $686,000 and a loss of $1,336,000.
Page 8
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
(continued)
Note 4 - Basic and Diluted Earnings Per Share
The following is a reconciliation of the numerators and denominators of
the basic and diluted earnings per share computations (in thousands, except per
share data):
Three months ended
March 31,
---------------------------
2000 1999
------ ------
Basic EPS:
Net Earnings $1,583 $2,209
------ ------
Weighted average common
shares outstanding 7,972 9,129
------ ------
Basic EPS $ 0.20 $ 0.24
====== ======
Diluted EPS:
Net Earnings $1,583 $2,209
------ ------
Weighted average common
shares outstanding 7,972 9,129
Additional shares outstanding
after the assumed exercise
of options by applying the
treasury stock method 38 75
------ ------
Total weighted average common
shares outstanding 8,010 9,204
====== ======
Diluted EPS $ 0.20 $ 0.24
====== ======
Page 9
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
(continued)
Note 5- Segment Information
The Company has two reportable segments: personal lines and commercial
lines. These segments are managed separately because they have different
customers, pricing and expense structures. The Company does not allocate assets
between segments because assets are reviewed in total by management for
decision-making purposes.
The accounting policies of the segments are the same as those more
fully described in the summary of significant accounting policies in the
Company's annual report. The Company evaluates segment profit based on profit or
loss from operating activities. Segments profits or losses from operations is
pre-tax and does not include unallocated expenses but does include investment
income attributable to insurance transactions. Segment profit or loss therefore
excludes federal income taxes, unallocated expenses and investment income
attributable to equity as opposed to investment income attributable to insurance
transactions.
The Company had an agent who exclusively sold non-standard personal
automobile insurance for the Company accounting for 12.8% of the Company's
revenue at March 31, 1999. As of March 31, 2000, this agent's business
represents less than 10% of the companies' revenue as the Company is exiting the
non-standard personal automobile line.
Page 10
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
(continued)
The following is a summary of the Company's segment revenues, expenses
and profit for the three months ended March 31, 2000 and 1999:
<TABLE>
<CAPTION>
(in thousands) March 31, 2000
--------------
Commercial Personal Total
------------- ----------- -------------
<S> <C> <C> <C>
Premiums earned $19,776 $1,770 $21,546
Net investment income from
insurance operations 1,197 156 1,353
------------- ----------- -------------
Total segment revenues 20,973 1,926 22,899
------------- ----------- -------------
Segment losses and LAE 12,753 1,152 13,905
Segment expenses 6,055 645 6,700
------------- ----------- -------------
Total segment expenses 18,808 1,797 20,605
------------- ----------- -------------
Segment profit $2,165 $ 129 $2,294
Plus unallocated items:
Net investment income from equity 1,034
Unallocated expenses (1,225)
Income taxes (520)
-------------
Net earnings $ 1,583
=============
(in thousands) March 31, 1999
--------------
Commercial Personal Total
------------- ----------- -------------
Premiums earned $ 16,614 $ 4,848 $ 21,462
Net investment income from
insurance operations 1,297 228 1,525
------------- ----------- -------------
Total segment revenues 17,911 5,076 22,987
------------- ----------- -------------
Segment losses and LAE 10,117 3,607 13,724
Segment expenses 5,000 1,577 6,577
------------- ----------- -------------
Total segment expenses 15,117 5,184 20,301
------------- ----------- -------------
Segment profit (loss) $2,794 $ (108) $2,686
Plus unallocated items:
Net investment income from equity 1,441
Unallocated expenses (1,065)
Income taxes (853)
-------------
Net earnings $2,209
=============
</TABLE>
Page 11
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
(continued)
The Company announced on April 28, 1999, that it would run-off its
remaining portfolio of the personal lines automobile business, which was
underwritten through a single agent in California. This followed a move earlier
this year to eliminate the rest of the Company's personal automobile portfolio
of this business in six other states.
Total segment revenue of $22.9 million and $23.0 million, plus
unallocated net investment income of $1.0 million and $1.4 million, equals total
Company revenue of $23.9 million and $24.4 million.
Page 12
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Three Months Ended March 31, 2000 and 1999
Gross written premiums increased 19.0% to $26.3 million in the first
quarter of 2000, compared to $22.1 million in the first quarter of 1999. The
increase resulted from a 40.6% increase in commercial lines premium to $24.8
million, partially offset by a 67.1% decrease in personal automobile lines
premium to $1.5 million, which decrease was due to the run-off by the company of
the non-standard personal automobile segment.
Net written premium increased 12.8% to $23.4 million for the first
quarter of 2000, compared to $20.7 million for the first quarter of 1999. This
increase resulted from a 34.5% increase in commercial lines net premium to $21.9
million, partially offset by a 67.1% decrease in personal automobile lines net
premium to $1.5 million.
Premiums earned and Net investment income were unchanged at $21.5
million and $2.4 million, respectively for the three months ended March 31, 2000
and 1999.
Net realized investment gains (losses) before taxes were a loss of
$13,000 for the first quarter ended March 31, 2000 compared to a realized gain
of $556,000 for the first quarter ended March 31, 1999. The realized gains were
due principally from sales from the Company's equity portfolio.
Losses and loss adjustment expenses increased 1.3% to $13.9 million for
the three months ended March 31, 2000, from $13.7 million for the three months
ended March 31, 1999, due to an increase in the commercial lines loss ratio to
64.5% for the quarter ended March 31, 2000 compared to 60.9% for the first
quarter of 1999. The first quarter 1999 loss ratio does not reflect the
strengthening of reserves that was made by the Company in the third quarter of
1999. The first quarter of 2000 commercial loss ratio reflects a more
conservative reserving posture by the Company for the current accident year.
This increase was partially offset by a decrease in the personal lines loss
ratio to 65.1% for the first quarter of 2000, compared to 74.4% for the first
quarter of 1999. Personal lines, which is entirely non-standard personal
automobile is currently in run-off by the Company.
Amortization of deferred policy acquisition costs was unchanged at $6.2
million for the three months ended March 31, 2000, and 1999.
Other underwriting expenses increased 13.6% to $1.7 million for the
first quarter of 2000 from $1.5 million for the first quarter of 1999. This
increase is primarily attributable to the 19.0% increase in gross written
premiums experienced in the first quarter of 2000, compared to the first quarter
of 1999.
Page 13
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(continued)
As a result of the factors described above, the Company's net income
for the three months ended March 31, 2000 decreased 28.4% to $1.6 million or
$0.20 per share (basic and diluted), from $2.2 million or $0.24 per share (basic
and diluted) for the three months ended March 31, 1999. March 31, 1999 earnings
per share (basic & diluted) include $0.04 of realized investment gains compared
to no per share impact from investment transactions in the first quarter of
2000.
As part of the Company's corporate stock repurchase program, the
Company has continued to repurchase its common stock. The Company repurchased
approximately 1.0 million shares between March 31, 1999 and March 31, 2000,
resulting in a reduction of weighted average diluted shares outstanding to
approximately 8.0 million shares outstanding during the first quarter of 2000,
compared to approximately 9.2 million shares outstanding during the first
quarter of 1999. The Company's stock repurchase program has impacted the
comparability of earnings per share. Between March 31, 2000 and March 31, 1999,
weighted average shares outstanding decreased by approximately 11%.
Liquidity and Capital Resources
PNG is a holding company, the principal asset of which is the common
stock of Penn-America. PNG's cash flows depend primarily on dividends and other
payments from Penn-America. PNG uses these funds to pay (i) operating expenses,
(ii) taxes and other payments, and (iii) dividends to PNG stockholders.
Penn-America's source of funds consists primarily of premiums, investment income
and proceeds from sales and redemptions of investments. Funds are used by
Penn-America principally to pay claims and operating expenses, to purchase
investments and to make dividend and other payments to PNG.
Net cash provided by operating activities increased 125.4% to $3.4
million for the three months ended March 31, 2000, from $1.5 million for the
three months ended March 31, 1999, due primarily to a refund of federal income
taxes received during the first quarter of 2000.
Net cash used by investing activities was $4.6 million for the three
months ended March 31, 2000, compared to $6.4 million for the three months ended
March 31, 1999.
Net cash used by financing activities was $3.6 million for the three
months ended March 31, 2000, compared to $7.8 million for the same period in
1999. The principal use of cash by financing activities was the purchase of
343,700 shares of treasury stock at approximately $2.7 million during the first
quarter of 2000, compared to the purchase of 669,800 shares of treasury stock
totaling $7.3 million during the quarter ended March 31, 1999. As of March 31,
2000, the Company has acquired approximately 2.3 million shares of the 2.5
million shares approved by the Board at an average cost of $9.74 per share. The
funding for the treasury stock program has been primarily provided by dividends
from the Company's insurance subsidiary, Penn-America. The Company has a $25
million line of credit which also can be accessed, if needed, to fund the
purchases of treasury stock.
Page 14
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(continued)
The Company believes that it has sufficient liquidity to meet its
anticipated insurance obligations and operating and capital expenditure needs.
The Company's investment strategy emphasizes quality, liquidity and
diversification, as well as total return. With respect to liquidity, the Company
considers liability durations, specifically related to loss reserves, when
determining desired investment maturities. In addition, maturities have been
staggered to produce cash flows for loss payments and reinvestment
opportunities. The average duration of the fixed maturity portfolio as of March
31, 2000 was approximately 3.5 years.
The Company's fixed maturity portfolio was $134.0 million or 84% of the
total investment portfolio as of March 31, 2000. Approximately 98% of these
securities were rated "A-" or better by Standard & Poor's or Moody's. Equities,
the majority of which consist of preferred stocks, were $25.8 million or 16% of
total investments as of March 31, 2000.
The investment portfolio contained $19.5 million of mortgage/
asset-backed obligations, which represents 12.2% of the total investments as of
March 31, 2000. All of these securities are "AAA" rated securities issued by
government, government-related agencies or publicly held corporations, are
publicly traded, and have market values obtained from an independent pricing
service. Changes in estimated cash flows due to changes in prepayment
assumptions from the original purchase assumptions are revised based on current
interest rates and the economic environment. The Company had no other derivative
financial instruments, real estate or mortgages in the investment portfolio as
of March 31, 2000.
The principal source of cash for the payment of dividends to PNG's
stockholders is dividends from Penn-America. Penn-America is required by law to
maintain a certain minimum surplus on a statutory basis and is subject to
risk-based capital requirements and regulations under which payment of dividends
from statutory surplus may require prior approval from the Pennsylvania
regulatory authorities. The maximum dividend that may be paid in 2000 by
Penn-America to PNG without prior approval of regulatory authorities is
$6,950,000.
Page 15
<PAGE>
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Default Upon Senior Securities - None
Item 4. Submission of Matters to a Vote by Security Holders -None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K - None
Page 16
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Penn-America Group, Inc.
Date: May 10, 2000 By: /s/ Jon S. Saltzman
------------ -------------------
Jon S. Saltzman
President and
Chief Executive Officer
By: /s/ Rosemary R. Ferrero
-----------------------
Rosemary R. Ferrero
Principal Finance and
Accounting Officer
Page 17
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet and Statement of Earnings at March 31, 2000 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000910110
<NAME> Penn-America Group, Inc.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-01-2000
<PERIOD-END> Mar-31-2000
<DEBT-HELD-FOR-SALE> 110,725
<DEBT-CARRYING-VALUE> 23,231
<DEBT-MARKET-VALUE> 23,051
<EQUITIES> 25,754
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 159,710
<CASH> 7,227
<RECOVER-REINSURE> 19,935
<DEFERRED-ACQUISITION> 9,842
<TOTAL-ASSETS> 220,978
<POLICY-LOSSES> 95,050
<UNEARNED-PREMIUMS> 38,411
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 100
<OTHER-SE> 79,241
<TOTAL-LIABILITY-AND-EQUITY> 220,978
21,546
<INVESTMENT-INCOME> 2,400
<INVESTMENT-GAINS> (13)
<OTHER-INCOME> 0
<BENEFITS> 13,905
<UNDERWRITING-AMORTIZATION> 6,239
<UNDERWRITING-OTHER> 1,686
<INCOME-PRETAX> 2,103
<INCOME-TAX> 520
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,583
<EPS-BASIC> .20
<EPS-DILUTED> .20
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
