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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November
3, 2014
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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 November 3, 2014,
reporting Investors Title Company's financial results for the fiscal
quarter ended September 30, 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 November
3, 2014.
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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November 3, 2014
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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 November 3,
2014.
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Exhibit 99.1
Investors
Title Company Announces Third Quarter 2014 Results
CHAPEL HILL, N.C.--(BUSINESS WIRE)--November 3, 2014--Investors Title
Company today announced its results for the third quarter ended
September 30, 2014. Net income attributable to the Company decreased
53.0% to $2,594,490, or $1.28 per diluted share, compared with
$5,515,798, or $2.66 per diluted share, for the prior year quarter.
Revenues decreased 12.2% to $29,508,230 versus the prior year quarter,
primarily due to a 13.4% decrease in net premiums written. Higher
mortgage interest rates led to lower levels of refinance activity, while
purchase activity remained relatively constant with last year.
Operating expenses increased 2.3% to $25,909,740 versus the prior year
quarter, primarily as a result of a higher level of claims expense,
following 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 post-recession policy years. The increase in the
claims provision was partially offset by a decrease in agent commissions
resulting from decreased activity in markets which are predominantly
agent-based, and a decrease in incentive compensation and certain
employee benefits.
For the nine months ended September 30, 2014, net income attributable to
the Company decreased 46.1% to $6,954,526, or $3.41 per diluted share,
compared with $12,898,203, or $6.19 per diluted share, for the prior
year period, primarily due to changes in the provision for claims.
Revenues decreased 3.1% to $91,183,857 versus the prior year period,
primarily due to a 4.3% decrease in net premiums written. Premiums
related to refinance activity were down substantially for the first
three quarters of the year, while purchase-related premiums were up
slightly. Operating expenses increased 8.4% to $81,549,808 versus the
prior year period, driven mostly by an increase in the claims provision
primarily related to the prior year change in estimate.
Chairman J. Allen Fine added, “As expected, the drop in refinance
activity that began last year has continued in 2014, and led to a
reduction in premium volumes for both the quarter and year-to-date
periods. We are, however, pleased with the overall strength in home
purchase activity, as well as sustained increases in the level of home
prices. Although unusual adjustments to the claims reserve in the prior
year led to an unfavorable comparison, we remain encouraged by the
general long-term trend of claims activity. We will continue to monitor
and respond to changes in the market, while remaining focused on
enhancing our long-term competitive strengths.”
Investors Title Company is engaged through its subsidiaries in the
business of issuing and underwriting 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, increases in home
purchase activity, 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; 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.
Investors Title Company and Subsidiaries
Consolidated Statements of Income
For the Three and Nine Months Ended September 30, 2014 and
2013
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Three Months Ended September 30,
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Nine Months Ended September 30,
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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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26,356,835
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$
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30,431,560
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$
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81,115,940
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$
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84,787,318
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Investment income - interest and dividends
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1,064,995
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990,338
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3,130,846
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2,835,870
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Net realized gain on investments
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8,689
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261,938
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592,908
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333,554
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Other
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2,077,711
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1,921,403
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6,344,163
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6,190,170
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Total Revenues
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29,508,230
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33,605,239
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91,183,857
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94,146,912
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Operating Expenses:
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Commissions to agents
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14,440,264
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18,142,697
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48,242,923
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49,240,917
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Provision (benefit) for claims
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1,507,814
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(3,037,101
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)
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4,177,478
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(2,429,289
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)
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Salaries, employee benefits and payroll taxes
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6,609,425
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7,133,497
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19,250,116
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19,533,970
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Office occupancy and operations
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1,257,009
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1,165,772
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3,683,980
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3,266,112
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Business development
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552,215
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606,549
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1,581,872
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1,487,635
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Filing fees, franchise and local taxes
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233,079
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141,373
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648,022
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510,893
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Premium and retaliatory taxes
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491,927
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592,717
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1,332,492
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1,563,764
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Professional and contract labor fees
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621,305
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404,206
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1,976,272
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1,514,749
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Other
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196,702
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179,006
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656,653
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560,170
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Total Operating Expenses
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25,909,740
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25,328,716
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81,549,808
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75,248,921
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Income before Income Taxes
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3,598,490
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8,276,523
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9,634,049
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18,897,991
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Provision for Income Taxes
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1,004,000
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2,733,000
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2,656,000
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5,944,000
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Net Income
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2,594,490
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5,543,523
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6,978,049
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12,953,991
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Net Income Attributable to Redeemable Noncontrolling Interest
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—
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(27,725
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(23,523
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(55,788
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Net Income Attributable to the Company
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$
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2,594,490
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$
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5,515,798
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$
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6,954,526
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$
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12,898,203
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Basic Earnings per Common Share
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$
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1.28
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$
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2.67
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$
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3.42
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$
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6.26
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Weighted Average Shares Outstanding – Basic
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2,028,818
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2,069,081
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2,033,637
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2,059,226
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Diluted Earnings per Common Share
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$
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1.28
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$
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2.66
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$
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3.41
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$
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6.19
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Weighted Average Shares Outstanding – Diluted
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2,032,644
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2,074,940
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2,038,875
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2,083,560
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Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of September 30, 2014 and December 31, 2013
(Unaudited)
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September 30, 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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94,995,138
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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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37,461,674
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36,144,065
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Short-term investments
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6,154,749
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7,926,373
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Other investments
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7,950,676
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7,247,831
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Total investments
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146,562,237
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142,763,682
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Cash and cash equivalents
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23,622,522
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23,626,761
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Premium and fees receivable
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8,489,096
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8,750,224
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Accrued interest and dividends
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1,151,250
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1,006,698
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Prepaid expenses and other assets
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8,677,087
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7,466,141
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Property, net
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5,369,084
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4,325,538
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Current income taxes recoverable
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1,624,024
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366,772
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Total Assets
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$
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195,495,300
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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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36,252,000
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$
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35,360,000
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Accounts payable and accrued liabilities
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18,683,691
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20,324,190
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Deferred income taxes, net
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5,893,471
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4,013,983
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Total liabilities
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60,829,162
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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; 2,028,818
and
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2,037,135 shares issued and outstanding 2014 and 2013, respectively,
excluding
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291,676 shares for 2014 and 2013 of common stock held by the
Company's
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subsidiary)
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1
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1
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Retained earnings
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122,545,561
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116,714,749
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Accumulated other comprehensive income
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12,120,576
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11,347,404
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Total stockholders’ equity
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134,666,138
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128,062,154
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Total Liabilities and Stockholders’ Equity
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$
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195,495,300
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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 Nine Months Ended September 30, 2014 and
2013
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Three Months Ended September 30,
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Nine Months Ended September 30,
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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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6,815,125
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25.9
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$
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6,630,345
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21.8
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$
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17,922,166
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22.1
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$
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19,746,738
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23.3
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Agency
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19,541,710
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74.1
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23,801,215
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78.2
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63,193,774
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77.9
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65,040,580
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76.7
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Total
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$
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26,356,835
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100.0
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$
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30,431,560
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100.0
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$
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81,115,940
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100.0
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$
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84,787,318
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100.0
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CONTACT:
Investors Title Company
Elizabeth B. Lewter, 919-968-2200
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