UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
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February
12, 2015
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Date
of Report (Date of earliest event reported)
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INVESTORS
TITLE COMPANY
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(Exact
name of Registrant as specified in its charter)
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North Carolina
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0-11774
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56-1110199
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(State or Other Jurisdiction of
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(Commission
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(I.R.S. Employer
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Incorporation or Organization)
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File Number)
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Identification No.)
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121 North Columbia Street
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Chapel Hill, North Carolina
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27514
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(Address of Principal Executive Offices)
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(Zip Code)
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(919) 968-2200
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Registrant's telephone number, including area code
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Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
Attached as Exhibit 99.1 and incorporated herein by reference is a copy
of the press release of Investors Title Company, dated February 12,
2015, reporting Investors Title Company's financial results for the
fiscal quarter ended December 31, 2014.
The information in this Current Report is being furnished and shall not
be deemed "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the
liabilities of that Section, nor shall it be deemed to be incorporated
by reference in any filing under the Securities Act of 1933 or the
Exchange Act, regardless of any general incorporation language in such
filing.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits. The following exhibit accompanies this Report:
Exhibit 99.1 – Press Release of Investors Title Company dated February
12, 2015.
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 hereunto duly authorized.
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INVESTORS TITLE COMPANY
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Date:
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February 12, 2015
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By:
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/s/ James A. Fine, Jr.
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James A. Fine, Jr.
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President, Treasurer and
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Chief Financial Officer
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EXHIBIT INDEX
Exhibit No.
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Description
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99.1
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Press release issued by Investors Title Company on February 12,
2015
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Exhibit 99.1
Investors
Title Company Announces Fourth Quarter and Fiscal Year 2014 Results
CHAPEL HILL, N.C.--(BUSINESS WIRE)--February 12, 2015--Investors Title
Company (NASDAQ: ITIC) today announced its results for the fourth
quarter and year ended December 31, 2014. For the year, net income
attributable to the Company decreased 34.4% to $9,648,975, or $4.74 per
diluted share, versus $14,708,210, or $7.08 per diluted share, for the
prior year. For the quarter, net income attributable to the Company
increased 48.9% to $2,694,449, or $1.33 per diluted share, versus
$1,810,007, or $0.88 per diluted share, for the prior year period.
Revenues for the year decreased 2.5% to $123,119,286 versus the prior
year, primarily due to lower premium volumes. Revenues from purchase
activity increased versus last year, due to a slight increase in volume
as well as higher real estate values. However, the increase in purchase
business was not enough to offset the decline in refinance business,
which has fallen significantly across all of our markets due to
unfavorable interest rate trends.
Operating expenses increased 4.7% to $109,630,788 versus the prior year,
chiefly as a result of a reduction in the reserves for claims in the
prior year period. The prior period reduction reflected a change in
estimate related to certain actuarial assumptions stemming from improved
claims experience in recent policy years. Office and occupancy expenses,
as well as professional fees and contract labor, also increased largely
as a result of long-term software development initiatives.
For the quarter, total revenues decreased 0.5% versus the prior year
period mainly due to minor fluctuations in the mix of business.
Operating expenses decreased 4.7%, mainly due to a reduction in the
provision for claims, a decline in commissions to agents commensurate
with lower premium volumes, and a decrease in retaliatory taxes.
Chairman J. Allen Fine commented, “Despite reductions in the number of
mortgage originations in 2014 versus the prior year, we are pleased to
report that our revenues contracted only slightly, due to market share
increases driven by targeted expansions in our agent network. Although
claims payments increased for the year, lower levels of foreclosure
activity and our internal risk management efforts led to a continuation
of a long-term overall favorable trend in claims provision rates. Our
balance sheet and financial condition remain strong, as total assets
reached a record level of $198 million. Looking forward, while we
realize there are a number of uncertain influences such as the impact of
oil price changes and regulatory activities, we remain optimistic about
the long-term prospects for the U.S. housing market. We will continue to
focus on profitably growing our business by enhancing our competitive
strengths and capitalizing on market opportunities.”
Investors Title Company’s subsidiaries issue and underwrite title
insurance policies. The Company also provides investment management
services to individuals, companies, banks and trusts, as well as
services in connection with tax-deferred exchanges of like-kind property.
Certain statements contained herein may constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include, among others, any
statements regarding future home price increases, changes in home
purchase or refinance activity, interest rate changes, expansion of the
Company’s market presence, enhancing competitive strengths or statements
regarding our actuarial assumptions and the application of recent
historical claims experience to future periods. These statements involve
a number of risks and uncertainties that could cause actual results to
differ materially from anticipated and historical results. Such risks
and uncertainties include, without limitation: the cyclical demand for
title insurance due to changes in the residential and commercial real
estate markets; the occurrence of fraud, defalcation or misconduct;
variances between actual claims experience and underwriting and
reserving assumptions, including the limited predictive power of
historical claims experience; declines in the performance of the
Company’s investments; government regulation; changes in the economy and
other considerations set forth under the caption “Risk Factors” in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2013, as filed with the Securities and Exchange Commission, and in
subsequent filings.
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Investors Title Company and Subsidiaries
Consolidated Statements of Income
For the Three and Twelve Months Ended December 31, 2014 and
2013
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Three Months Ended December 31,
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Twelve Months Ended December 31,
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2014
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2013
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2014
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2013
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Revenues:
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Net premiums written
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$
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28,847,616
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$
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29,098,948
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$
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109,963,556
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$
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113,886,266
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Investment income - interest and dividends
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1,128,655
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1,058,738
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4,259,501
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3,894,608
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Net realized (loss) gain on investments
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(324,614
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)
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(137,754
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268,294
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195,800
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Other
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2,283,772
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2,084,653
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8,627,935
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8,274,823
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Total Revenues
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31,935,429
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32,104,585
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123,119,286
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126,251,497
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Operating Expenses:
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Commissions to agents
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17,389,430
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17,909,893
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65,632,353
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67,150,810
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Provision (benefit) for claims
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1,052,238
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1,857,693
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5,229,716
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(571,596
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)
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Salaries, employee benefits and payroll taxes
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5,968,109
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5,852,541
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25,218,225
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25,386,511
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Office occupancy and operations
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1,365,982
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1,164,108
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5,049,962
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4,430,220
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Business development
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751,619
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658,004
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2,333,491
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2,145,639
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Filing fees, franchise and local taxes
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169,887
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171,042
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817,909
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681,935
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Premium and retaliatory taxes
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519,275
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994,463
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1,851,767
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2,558,227
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Professional and contract labor fees
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700,211
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656,857
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2,676,483
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2,171,606
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Other
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164,229
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195,237
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820,882
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755,407
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Total Operating Expenses
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28,080,980
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29,459,838
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109,630,788
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104,708,759
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Income before Income Taxes
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3,854,449
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2,644,747
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13,488,498
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21,542,738
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Provision for Income Taxes
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1,160,000
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802,000
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3,816,000
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6,746,000
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Net Income
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2,694,449
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1,842,747
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9,672,498
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14,796,738
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Net Income Attributable to Redeemable Noncontrolling Interest
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—
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(32,740
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)
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(23,523
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(88,528
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Net Income Attributable to the Company
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$
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2,694,449
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$
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1,810,007
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$
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9,648,975
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$
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14,708,210
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Basic Earnings per Common Share
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$
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1.33
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$
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0.88
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$
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4.75
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$
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7.15
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Weighted Average Shares Outstanding – Basic
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2,026,125
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2,046,998
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2,031,760
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2,056,169
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Diluted Earnings per Common Share
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$
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1.33
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$
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0.88
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$
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4.74
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$
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7.08
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Weighted Average Shares Outstanding – Diluted
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2,031,660
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2,053,567
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2,037,534
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2,076,628
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Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2014 and 2013
(Unaudited)
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December 31, 2014
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December 31, 2013
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Assets:
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Investments in securities:
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Fixed maturities, available-for-sale, at fair value
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$
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109,048,290
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$
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91,445,413
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Equity securities, available-for-sale, at fair value
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39,254,981
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36,144,065
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Short-term investments
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2,576,993
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7,926,373
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Other investments
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8,530,929
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7,247,831
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Total investments
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159,411,193
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142,763,682
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Cash and cash equivalents
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15,826,515
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23,626,761
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Premium and fees receivable
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8,544,183
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8,750,224
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Accrued interest and dividends
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1,063,837
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1,006,698
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Prepaid expenses and other assets
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7,732,677
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7,466,141
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Property, net
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5,460,805
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4,325,538
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Current income taxes recoverable
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—
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366,772
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Total Assets
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$
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198,039,210
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$
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188,305,816
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Liabilities and Stockholders’ Equity
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Liabilities:
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Reserves for claims
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$
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36,677,000
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$
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35,360,000
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Accounts payable and accrued liabilities
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18,290,819
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20,324,190
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Current income taxes payable
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92,192
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—
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Deferred income taxes, net
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5,415,493
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4,013,983
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Total liabilities
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60,475,504
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59,698,173
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Redeemable Noncontrolling Interest
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—
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545,489
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Stockholders’ Equity:
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Common stock - no par value (10,000,000 authorized shares; 2,023,270
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and 2,037,135 shares issued and outstanding 2014 and 2013,
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respectively, excluding 291,676 shares for 2014 and 2013 of common
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stock held by the Company's subsidiary)
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1
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1
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Retained earnings
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124,707,196
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116,714,749
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Accumulated other comprehensive income
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12,856,509
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11,347,404
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Total stockholders’ equity
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137,563,706
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128,062,154
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Total Liabilities and Stockholders’ Equity
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$
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198,039,210
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$
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188,305,816
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Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
For the Three and Twelve Months Ended December 31, 2014 and
2013
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Three Months Ended December 31,
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Twelve Months Ended December 31,
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2014
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%
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2013
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%
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2014
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%
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2013
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%
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Branch
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$
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6,134,866
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21.3
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$
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5,064,864
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17.4
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$
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24,057,032
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|
21.9
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$
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24,811,602
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|
21.8
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|
|
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Agency
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22,712,750
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|
78.7
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24,034,084
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|
82.6
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|
|
85,906,524
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|
|
78.1
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|
|
89,074,664
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|
|
78.2
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|
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|
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|
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|
|
|
|
|
|
|
|
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Total
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$
|
28,847,616
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|
|
100.0
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$
|
29,098,948
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|
|
100.0
|
|
|
$
|
109,963,556
|
|
|
100.0
|
|
|
$
|
113,886,266
|
|
|
100.0
|
CONTACT:
Investors Title Company
Elizabeth B. Lewter, 919-968-2200
Investors Title (NASDAQ:ITIC)
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