EX-99.1


For release:	February 16, 2005

Contact:	Financial Kevin L. Tate, CPA Chief Financial Officer (610) 660-6813 ktate@unitednat.com	Media Paula Negro Assistant Vice President, Marketing (610) 668-6938 pnegro@unitednat.com


Summary:	United America Indemnity, Ltd. (NASDAQ:UNGL) reports fourth-quarter and year-end 2004 results. Fourth quarter 2004 shows continued growth in net income and net operating income. Book value per share increased 11.7 percent in 2004.

George Town, Grand Cayman, Cayman Islands (February 16, 2005) – United America Indemnity, Ltd. (NASDAQ: UNGL) today reported results for the fourth-quarter and year-end 2004.

On January 25, 2005, United America Indemnity (UAI) announced it has completed its merger with Penn-America Group, Inc. and its acquisition of Penn Independent Corporation. The estimated book value per share of the combined entities based on the number of shares issued on January 25, 2005 and the GAAP book values of the combined entities as of December 31, 2004 would have been $15.87 as compared to the December 31, 2004 United America Indemnity GAAP book value per share of $15.30.

The United America Indemnity data for 2003 and 2004 refer only to the company previously called United National Group, Ltd. As part of this release, the fourth quarter and year-end 2004 results of Penn-America Group will be reported separately.

United America Indemnity’s results, including increases of more than 100 percent in net income and net operating income in the fourth quarter, reflect the successful completion of the company’s strategy to refocus the balance of its business from an emphasis on providing heavily reinsured “reverse-flow” insurance products to providing and retaining for its own account insurance across multiple product classes.

United America Indemnity’s net operating income (excluding Penn-America Group and Penn Independent) increased 104 percent to $11.6 million ($0.41 per basic share, $0.40 per diluted share) compared with $5.7 million ($0.21 pro forma per basic share, $0.20 pro forma per diluted share) for the same period in 2003.

United America Indemnity’s net income (excluding Penn-America Group and Penn Independent) for the fourth quarter of 2004 increased 120 percent to $13.8 million ($0.49 per basic share, $0.48 per diluted share) compared with $6.3 million ($0.23 pro forma per basic share, $0.22 pro forma per diluted share) in the fourth quarter of 2003. Net income included after-tax net realized investment gains of $2.2 million compared with $0.6 million for the fourth quarter of 2003.

The company’s combined ratio, a key measure of insurance profitability, improved to 91.0 compared with 98.0 in the same quarter last year.

Consistent with the company’s strategy, gross premiums written decreased 24.3 percent to $94.3 million, from $124.6 million in the fourth quarter of 2003. Net premiums, however, increased 45.7 percent to $75.2 million from $51.6 million in the comparable quarter of 2003. Decreased gross written premium with increased net written premium is an expected result of the company’s strategy, as heavily reinsured business lines are run-off and core product lines, which have significantly lower reinsurance costs as a percentage of premium, are expanded. The company ended the year with cash and invested assets of $924.3 million, an increase of $76.0 million over December 31, 2003. Investment income for the fourth quarter of 2004, excluding the amount received in the settlement with Partner Reinsurance Company, increased 11% compared to the same quarter in 2003.

Edward J. Noonan, acting chief executive officer noted, “We made great progress refocusing our strategy and product offerings. As a result, United America’s book value per share at the end of 2004 increased 11.7 percent and the annualized return on equity to our investors was 8.8 percent. Further, pricing remains strong, with an average nine percent increase across our book of business in 2004. With the combination of United National Group, Penn-America Group, Inc. and Penn Independent Corporation in early 2005, we believe we have built a solid foundation for continued excellent performance for our shareholders this year.”

UAI’s Fourth-Quarter Gross- and Net-Written Premium Results by Business Lines (Excluding Penn-America Group and Penn Independent)


	Quarter Ended December 31,
	(Dollars in thousands)
	Gross Premiums Written				Net Premiums Written
	2004		2003		2004		2003
Specific Specialty	$	16,397	$	50,749	$	9,992	$	14,242
Umbrella and Excess		7,977		17,593		1,425		871
Property and General Liability		54,327		35,116		50,303		28,685
Non-Medical Professional Liability		15,639		21,109		13,445		7,775

Total	$	94,340	$	124,567	$	75,165	$	51,573

Specific specialty products: Gross premiums written for the fourth quarter decreased 67.7 percent compared with the fourth quarter of 2003. Net premiums written decreased by 29.8 percent compared with the comparable period in 2003. These decreases occurred primarily because the company exited the heavily reinsured and reverse-flow type of business in this category.

Umbrella and excess products: Gross premiums written for the fourth quarter decreased 54.7 percent compared with the fourth quarter of 2003. This decrease resulted primarily from the company’s exit from reverse-flow business. However, net premiums written in this product class increased 63.6 percent compared with the comparable 2003 quarter because the company retained a larger percentage of those Umbrella and Excess policies that it continued to write, thus reducing reinsurance costs as a percentage of premiums.

Property and general liability products: Gross premiums written increased 54.7 percent and net premiums written also increased 75.4 percent compared with the fourth quarter of 2003. These increases resulted both from rate increases and an increase in the number of policies sold.

Non-Medical Professional Liability: Gross premiums written decreased 25.9 percent compared with the fourth quarter of 2003. However, net premiums written increased 72.9 percent compared with the fourth quarter of 2003. This increase resulted primarily from rate increases and a change in the reinsurance programs supporting these writings, which had the effect of increasing the company’s retention.

United America Indemnity’s net operating income (excluding Penn-America Group and Penn Independent) for 2004 was $34.1 million ($1.21 per basic share, $1.18 per diluted share), an increase of 26 percent, compared with net operating income of $27.0 million ($0.97 pro forma per basic share, $0.95 pro forma per diluted share) in 2003.

Net income (excluding Penn-America Group and Penn Independent) for the year ended December 31, 2004 was $37.0 million ($1.31 per basic share, $1.28 per diluted share) compared with net income of $77.1 million ($2.77 pro forma per basic share, $2.72 pro forma per diluted share) for the year ended December 31, 2003. Net income included $1.7 million of after-tax net realized investment gains compared with $3.7 million of after-tax net realized investment gains in 2003. Net income in 2004 included an extraordinary gain of $1.2 million compared with an extraordinary gain of $46.4 million for the year ended December 31, 2003.

The combined ratio in 2004 improved to 92.8 compared with 94.0 in 2003. Net income and net operating income in 2004 included an after-tax charge of $2.5 million related to various purchase accounting adjustments. These adjustments increased United America Indemnity’s combined ratio for 2004 by 1.2 percentage points. The combined ratio in 2004 also was affected by catastrophic losses of $1.65 million, which increased the combined ratio by 0.7 percentage points.

Gross premiums written decreased 38.8 percent in 2004, to $409.1 million from $668.4 in 2003. Net premiums written increased 39.8 percent in 2004 to $280.2 million from $200.4 million in the previous year.

Reinsurance receivables at December 31, 2004 decreased $231.1 million, to $1,531.9 million from $1,763.0 million at December 31, 2003. The aggregate amount of collateral securing the reinsurance receivables held by United America Indemnity increased to 46% of gross reinsurance receivables from 41% at December 31, 2003. The ratio of reinsurance recoverables net of collateral to shareholders’ equity decreased from 2.2 at December 31, 2003 to 1.9 at December 31, 2004. Reinsurance receivables net of collateral at December 31, 2004 decreased by 20.9 percent, or $217.7 million, to $826.3 million from $1,044.0 million at December 31, 2003.

United America Indemnity’s book value (excluding adjustments from the Penn-America Group and Penn Independent transactions) on December 31, 2004 of $432.6 million or $15.30 per share represents a 13.6 percent increase from $380.8 million or $13.70 per share in 2003. Book value at December 31, 2004 is based on 28.3 million aggregate Class A and Class B common shares outstanding.

UAI’s Year-Ended 2004 Gross and Net Written-Premium Results by Business Lines (Excluding Penn-America Group and Penn Independent)


	Year Ended December 31,
	(Dollars in thousands)
	Gross Premiums Written				Net Premiums Written
	2004		2003		2004		2003
Specific Specialty	$	93,662	$	284,000	$	39,780	$	57,025
Umbrella and Excess		38,897		160,176		6,472		8,818
Property and General Liability		190,049		133,679		170,964		99,836
Non-Medical Professional Liability		86,465		90,525		62,992		34,702

Total	$	409,073	$	668,380	$	280,208	$	200,381

Specific specialty products: Gross premiums written in 2004 decreased 67.0 percent compared with 2003. Net premiums written in 2004 decreased by 30.2 percent compared with 2003. These decreases occurred primarily because of the company’s exit from heavily reinsured reverse-flow business.

Umbrella and excess products: Gross premiums written decreased 75.7 percent in 2004 compared with 2003. Net premiums written in 2004 decreased 26.6 percent compared with 2003. These decreases occurred primarily because of the company’s exit from heavily reinsured reverse-flow business.

Property and general liability products: Gross premiums written in 2004 increased 42.2 percent compared with 2003. Net premiums written in 2004 increased 71.2 percent compared with 2003. These increases resulted both from rate increases and an increase in the number of policies sold.

Non-medical professional liability products: Gross premiums written in 2004 decreased 4.5 percent compared with 2003. However, net premiums written in 2004 increased 81.5 percent, compared with 2003. This increase resulted primarily from a change in the reinsurance programs supporting these writings, which had the effect of increasing United America Indemnity’s retention.

Penn-America Group, Inc. formerly traded on the New York Stock Exchange as PNG, will contribute materially to the 2005 results of United America Indemnity. Penn-America’s fourth-quarter and year-end results will be filed on an 8-K form with the Securities and Exchange Commission. Here are highlights of Penn-America’s fourth-quarter and year-end 2004 performance:

Net operating income was a record $6.1 million in the fourth quarter of 2004, an increase of 36 percent compared with $4.5 million in 2003. Excluding $1.5 million of after-tax merger costs relating to the business combination with United National Group, net operating income was $7.6 million or 70 percent greater than in the comparable quarter of 2003.

Net income was a record $5.9 million in the fourth quarter of 2004, an increase of 31 percent compared with $4.5 million in the comparable quarter of 2003. Net income included after-tax net realized investment losses of $0.2 million for the fourth quarter of 2004.

Penn-America’s combined ratio improved to 85.6 in the fourth quarter of 2004, down from 91.6 in the same quarter last year.

Gross premiums written increased 15 percent in the fourth quarter of 2004, reaching $64.6 million compared with $56.1 million in the fourth quarter of 2003. The increase in gross premiums written reflected a two percent rate increase and a 13 percent growth in policy counts and exposure growth.

Penn-America’s annualized return on equity in the fourth quarter was 16.3 percent; excluding merger-related costs, the return was 20.2 percent.

Joseph F. Morris, president and chief executive officer of Penn-America Group, and chief financial officer of Penn-America Group during 2004, commented: “In 2004, Penn-America posted annual-record results in every key financial measure used by investors to gauge the financial performance of a property and casualty insurance company, despite hurricane losses and merger-related costs. Now as part of United America Indemnity, Penn-America will continue to build on its franchise value with its general agents, while benefiting from the expanded product offerings and financial strength of United America Indemnity.”

Net operating income was $18.2 million for the year, an 18 percent increase compared with $15.5 million in 2003.

Net income was $17.6 million in 2004, up five percent from $16.7 million in 2003. Net income included after-tax net realized investment losses of $0.6 million compared with $1.2 million of after-tax net realized investment gains in 2003.

Penn-America’s combined ratio improved in 2004 to 91.3 from 92.5 in 2003. The 2004 combined ratio included 2.3 points from Hurricanes Charley, Frances, Ivan and Jeanne. Excluding the impact of the storms, Penn-America’s combined ratio for 2004 was 89.0.

Gross premiums written increased 24 percent during 2004, reaching $259.4 million compared with $209.4 million in 2003. The increase in gross premiums written reflected a three percent rate increase and a 21 percent growth in policy counts and exposure growth.

Penn-America’s return on equity in 2004 was 12.7 percent; excluding merger-related costs, the return was 14.2 percent.

The company also announced that Jon S. Saltzman plans to resign as president effective on September 1, 2005 in order to pursue other business interests. Mr. Saltzman will work closely with Edward J. Noonan, United America Indemnity’s acting chief executive officer, and other members of the senior management team to ensure a smooth transition.

Mr. Saltzman, formerly president and chief executive officer of Penn-America Group, became president of United America Indemnity as a result of the acquisition of Penn-America Group by United National Group, the predecessor company of United America Indemnity.

Acting chief executive officer Ed Noonan will assume the duties of United America Indemnity’s president, formerly held by Mr. Saltzman. Penn-America Group’s operations will continue to be led by Joe Morris, who was appointed CEO on January 25, 2005. Mr. Morris joined Penn-America Group in 2000.

Commenting on the announcement, Mr. Noonan said, “On behalf of the Board and employees, I want to thank Jon Saltzman for his strong leadership and valuable contributions in building Penn-America Group over the past 19 years, and most recently in helping with the merger with United America Indemnity, which has helped position the combined company for future growth and success. We greatly appreciate that we’ll be able to rely on Jon’s guidance and wisdom during the six-month transition period. We wish him well in his future endeavors.”

Mr. Saltzman said, “I am proud to have been a part of Penn-America Group’s growth over the past 19 years and proud that Penn-America Group is now an important part of United America Indemnity. Given its smooth transition, stronger capital base and a larger group of experienced and knowledgeable employees, United America Indemnity has already begun to obtain financial and operational levels higher than either company would be able to achieve on a stand-alone basis. I know that our agents, policyholders, employees and shareholders are in good hands with Ed Noonan, Bill Schmidt, Joe Morris and the talented management team at United America Indemnity. I wish the combined company and all my colleagues much success going forward.”

United America Indemnity, through its wholly-owned operating subsidiaries which include United National Group, Penn-America Group, Inc. and Penn Independent Corporation, is one of the leading specialty property and casualty insurers in the industry as well as a significant originator of and placement agent for specialty property and casualty insurance coverage. United America Indemnity is a holding company formed under the laws of the Cayman Islands and its U.S. insurance subsidiaries are either licensed or authorized to write surplus lines or specialty admitted business in all states. With an operating history of more than one century, United America Indemnity’s underwriting network includes approximately 150 professional general agents and its focus centers on self-generated proprietary products, niche programs and brokered lines. Its non-U.S. operations consist of recently formed Barbados-based and Bermuda-based insurance companies.

Edward J. Noonan, William F. Schmidt, Joseph F. Morris and Kevin L. Tate, CPA, chief financial officer, will conduct a teleconference for interested parties on February 17, 2005 at 8:30 a.m. Eastern Time. To participate, telephone 800-901-5241 (U.S. and Canada) or 617-786-2963 (International) and enter 24274044 when prompted for a password. The teleconference will be available for replay until February 28, 2005. To listen to the replay telephone 888-286-8010 (U.S. and Canada) or 617-801-6888 (International) and enter 60777364 when prompted for a password.

This conference also will be broadcast live at www.ungl.ky, www.penn-america.com and www.dvua.com, supplied by CCBN. To listen to the broadcast, your computer must have Windows Media Player installed. If you do not have Windows Media Player, go to any of the three sites prior to the call, where it can be downloaded for free. An online replay also will be available approximately one hour after the call. Please access the site at least 15 minutes prior to the call to register, download and install any necessary software.

The broadcast also is being distributed over CCBN’s Investor Distribution Network both to institutional and to individual investors. Individual investors can listen to the broadcast through CCBN’s individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN’s Individual Investor Network. Institutional investors can access the broadcast via CCBN’s password-protected event-management site, StreetEvents (www.streetevents.com).

This release contains forward-looking information about United America Indemnity and the operations of United America Indemnity that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “project,” “plan,” “seek,” “intend,” or “anticipate” or the negative thereof or comparable terminology, and include discussions of strategy, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives, expectations or consequences of the transactions, and statements about the future performance, operations, products and services of the companies.

The business and operations of United America Indemnity is and will be subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience may materially differ from those contained in any forward-looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: (1) the ineffectiveness of United America Indemnity’s business strategy due to changes in current or future market conditions; (2) the effects of competitors’ pricing policies, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products; (3) greater frequency or severity of claims and loss activity than United America Indemnity’s underwriting, reserving or investment practices have anticipated; (4) decreased level of demand for United America Indemnity’s insurance products or increased competition due to an increase in capacity of property and casualty insurers; (5) risks inherent in establishing loss and loss adjustment expense reserves; (6) uncertainties relating to the financial ratings of United America Indemnity’s insurance subsidiaries; (7) uncertainties arising from the cyclical nature of United America Indemnity’s business; (8) changes in United America Indemnity’s relationships with, and the capacity of, its general agents; (9) the risk that United America Indemnity’s reinsurers may not be able to fulfill obligations; and (10) uncertainties relating to governmental and regulatory policies. The foregoing review of important factors should be read in conjunction with the other cautionary statements that are included in United America Indemnity’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003, as well as in the materials filed and to be filed with the U.S. Securities and Exchange Commission (SEC). United America Indemnity does not make any commitment to revise or update any forward-looking statements in order to reflect events or circumstances occurring or existing after the date any forward-looking statement is made.

UNITED AMERICA INDEMNITY, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share data)


	For the Quarter					For the Year
	Ended December 31,					Ended December 31,
	2004		2003			2004			2003
	Successor		Pro Forma			Successor			Pro Forma

Gross premiums written	$	94,340	$	124,567		$	409,073		$	668,380

Net premiums written	$	75,165	$	51,573		$	280,208		$	200,381

Net premiums earned	$	64,389	$	41,225		$	230,140		$	180,166
Investment income, net		6,528		5,314			20,165			19,395
Net realized investment gains (losses)		3,364		887			2,677			5,758

Total revenues		74,281		47,426			252,982			205,319
Net losses and loss adjustment expense		35,443		31,145			133,838			123,684
Acquisition costs and other underwriting expenses		23,135		9,254			79,793			43,976
Provisions for doubtful reinsurance receivables		—		—			—			1,750
Other operating expenses (income)		502		254			1,509			755
Interest expense		1,436		1,355			5,523			1,650

Income before income taxes		13,765		5,418			32,319			33,504
Income tax expense (benefit)		556		(363	)		(1,995	)		5,395

Net income before equity in net income of Partnerships		13,209		5,781			34,314			28,109
Equity in net income of partnerships		612		500			1,538			2,592

Net income before extraordinary gain		13,821		6,281			35,852			30,701
Extraordinary gain		—		—			1,195			46,424

Net Income	$	13,821	$	6,281		$	37,047		$	77,125

Weighted average shares outstanding – basic		28,272		27,793			28,259			27,793

Weighted average shares outstanding – diluted		28,855		28,386			28,836			28,368

Net income per share – basic	$	0.49	$	0.23		$	1.31		$	2.77

Net income per share — diluted	$	0.48	$	0.22		$	1.28		$	2.72

Note Regarding Pro Forma Weighted Average Shares Outstanding for the Quarter and Year Ended December 31, 2003

Pro forma weighted average shares outstanding — basic for the quarter and year ended December 31, 2003 assumes that our actual outstanding common shares of 27.8 million at December 31, 2003 have been outstanding for the entire period. Pro forma weighted average shares outstanding — diluted for the quarter and year ended December 31, 2003 represents the pro forma weighted average shares outstanding — basic plus the weighted average impact of options and warrants outstanding at December 31, 2003 using the treasury stock method and assuming an average market price of $17.67.

The 2003 year-end results reported in this release are stated on a pro forma basis to reflect the combined performance of United America Indemnity and its predecessor company, Wind River Investment Corporation.

UNITED AMERICA INDEMNITY, LTD.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)


	Successor		Successor
	as of		as of
ASSETS	December 31, 2004		December 31, 2003
Bonds:
Available for sale securities, at fair value (amortized cost: $575,298 and $540,543)	$	585,385	$	549,966
Preferred shares:
Available for sale securities, at fair value		5,112		4,894
(cost: $4,804 and $4,372)
Common shares:
Available for sale securities, at fair value		37,894		33,219
(cost: $34,004 and $30,762)
Other invested assets		53,756		45,434

Total investments		682,147		633,513
Cash and cash equivalents		242,123		214,796
Agents’ balances, net		47,132		62,374
Reinsurance receivables, net		1,531,863		1,762,988
Accrued investment income		7,141		5,909
Federal income taxes receivable		—		4,898
Deferred federal income taxes, net		28,372		25,323
Deferred acquisition costs, net		29,735		8,581
Prepaid reinsurance premiums		42,623		117,936
Other assets		14,801		12,443

Total assets	$	2,625,937	$	2,848,761

*LIABILITIES AND SHAREHOLDERS’ EQUITY*
Liabilities:
Unpaid losses and loss adjustment expenses	$	1,876,510	$	2,059,760
Unearned premiums		152,166		177,408
Federal income taxes payable		1,943		—
Amounts held for the account of others		10,234		20,201
Ceded balances payable		22,698		59,876
Contingent commissions		4,499		5,178
Senior notes payable to related party		72,848		72,848
Junior subordinated debentures		30,929		30,929
Other liabilities		21,557		41,769

Total liabilities		2,193,384		2,467,969

Commitments and contingencies		^___		^___
Shareholders’ equity:
Common shares, $0.0001 par value		3		3
Preferred shares, $0.0001 par value		^__		^__
Additional paid-in capital		356,725		347,487
Accumulated other comprehensive income		15,507		10,031
Retained earnings		60,318		23,271

Total shareholders’ equity		432,553		380,792

Total liabilities and shareholders’ equity	$	2,625,937	$	2,848,761

UNITED AMERICA INDEMNITY, LTD.
SUMMARY OF NET OPERATING INCOME
(Dollars and shares in thousands, except per share data)


	For the Quarter				For the Year
	Ended December 31,				Ended December 31,
	2004		2003		2004		2003
	Successor		Pro Forma		Successor		Pro Forma
Net operating income	$	11,634	$	5,704	$	34,112	$	26,959
Adjustments:
Net realized investment gains (losses), net of tax		2,187		577		1,740		3,742
Extraordinary gain		—		—		1,195		46,424

Total after-tax adjustments		2,187		577		2,935		50,166

GAAP reported:
Net income	$	13,821	$	6,281	$	37,047	$	77,125

Weighted average shares outstanding – basic		28,272		27,793		28,259		27,793

Weighted average shares outstanding – diluted		28,855		28,386		28,836		28,368

Net operating income per share –basic	$	0.41	$	0.21	$	1.21	$	0.97

Net operating income per share – diluted	$	0.40	$	0.20	$	1.18	$	0.95

In managing its business and evaluating its performance, United America Indemnity’s management focuses on net operating income (net income excluding after-tax net realized investment gains (losses) and extraordinary items that do not reflect overall operating trends) as a more appropriate measure of the net income attributable to the ongoing operations of the business. Net operating income is not a substitute for net income determined in accordance with GAAP, and investors should not place undue reliance on this measure.

Note Regarding Pro Forma Weighted Average Shares Outstanding for the Quarter and Year Ended December 31, 2003

PENN-AMERICA GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)


	For the Quarter					For the Year
	Ended December 31,					Ended December 31,
	2004			2003		2004			2003
Gross premiums written	$	64,581		$	56,108	$	259,355		$	209,442

Net premiums written	$	56,259		$	47,063	$	224,950		$	176,450

Net premiums earned	$	55,917		$	43,057	$	206,386		$	154,054
Investment income, net		3,976			3,569		14,789			13,303
Net realized investment gains (losses)		(274	)		68		(998	)		1,947

Total revenues		59,619			46,694		220,177			169,304
Net losses and loss adjustment expense		31,280			25,875		126,379			94,666
Acquisition costs and other underwriting expenses		16,580			13,556		62,068			47,914
Corporate expenses		1,483			183		3,242			816
Interest expense		542			512		2,071			1,740

Income before income taxes		9,734			6,568		26,417			24,168
Income tax expense		3,813			2,051		8,850			7,443

Net Income	$	5,921		$	4,517	$	17,567		$	16,725


	As of			As of
ASSETS	December 31, 2004			December 31, 2003
Bonds:
Available for sale securities, at fair value (amortized cost: $355,582 and $315,509)	$	361,520		$	323,230
Held to maturity securities, at amortized cost (fair value: $279 and $293)		275			275
Equities:
Available for sale securities, at fair value		22,755			10,194
(cost: $21,387 and $10,048)
Total investments		384,550			333,699
Cash and cash equivalents		36,697			11,976
Premiums receivable		26,516			19,382
Reinsurance receivables, net		42,728			37,996
Accrued investment income		3,726			3,615
Receivable on investment sales		237			—
Capital lease, affiliate		1,405			1,492
Deferred federal income taxes, net		5,659			3,983
Deferred acquisition costs, net		21,132			17,091
Prepaid reinsurance premiums		12,673			13,409
Other assets		1,013			1,231

Total assets	$	536,336		$	443,874

*LIABILITIES AND SHAREHOLDERS’ EQUITY*
Liabilities:
Unpaid losses and loss adjustment expenses	$	229,151		$	174,882
Unearned premiums		110,032			92,205
Accounts payable and accrued expenses		8,877			8,983
Capital lease obligation, affiliate		1,104			1,273
Income tax payable		1,054			633
Junior subordinated debentures		30,000			30,000
Other liabilities		6,311			5,088

Total liabilities		386,529			313,064

Commitments and contingencies					^___
Shareholders’ equity:
Common shares		152			147
Additional paid-in capital		76,070			72,416
Other equity		(149	)		(785	)
Accumulated other comprehensive income		4,822			5,027
Retained earnings		68,912			54,005

Total shareholders’ equity		149,807			130,810

Total liabilities and shareholders’ equity	$	536,336		$	443,874


	For the Quarter					For the Year
	Ended December 31,					Ended December 31,
	2004			2003		2004			2003
Net operating income	$	6,099		$	4,473	$	18,216		$	15,459
Adjustments:
Net realized investment gains (losses), net of tax		(178	)		44		(649	)		1,266
Total after-tax adjustments		(178	)		44		(649	)		1,266

GAAP reported:
Net income	$	5,921		$	4,517	$	17,567		$	16,725