[
X ]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
North
Carolina
|
56-1110199
|
|
(State of Incorporation) | (I.R.S. Employer Identification No.) |
Large
accelerated filer __
|
Accelerated
filer X
|
Non-accelerated
filer __
(Do
not check if a smaller reporting company)
|
Smaller
reporting company __
|
Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008 |
1
|
||
Consolidated Statements of Income | |||
For the Three and Nine Months Ended September 30, 2009 and 2008 |
2
|
||
Consolidated Statements of Stockholders’ Equity | |||
For the Nine Months Ended September 30, 2009 and 2008 |
3
|
||
Consolidated Statements of Cash Flows | |||
For the Nine Months Ended September 30, 2009 and 2008 |
4
|
||
Notes to Consolidated Financial Statements |
5
|
||
Management's Discussion and Analysis of Financial Condition and Results of Operations |
18
|
||
Quantitative and Qualitative Disclosures About Market Risk |
30
|
||
Controls and Procedures |
30
|
||
Risk Factors |
32
|
||
Unregistered Sales of Equity Securities and Use of Proceeds |
33
|
||
Exhibits |
34
|
||
35
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Investors
Title Company and Subsidiaries
|
||||||||
As
of September 30, 2009 and December 31, 2008
|
||||||||
(Unaudited)
|
||||||||
September
30, 2009
|
December
31, 2008
|
|||||||
Assets
|
||||||||
Investments
in securities:
|
||||||||
Fixed
maturities:
|
||||||||
Held-to-maturity,
at amortized cost (fair value: 2009: $202,580; 2008:
$462,580)
|
$ | 197,509 | $ | 451,681 | ||||
Available-for-sale,
at fair value (amortized cost: 2009: $84,215,496; 2008:
$85,923,583)
|
89,334,159 | 87,708,500 | ||||||
Equity
securities, available-for-sale, at fair value (cost: 2009: $8,878,349;
2008: $9,158,785)
|
11,672,102 | 9,965,297 | ||||||
Short-term
investments
|
17,391,875 | 15,725,513 | ||||||
Other
investments
|
2,221,506 | 2,040,962 | ||||||
Total
investments
|
120,817,151 | 115,891,953 | ||||||
Cash
and cash equivalents
|
8,817,941 | 5,155,046 | ||||||
Premiums
and fees receivable, less allowance for doubtful accounts
of
|
||||||||
$1,382,000
and $1,297,000 for 2009 and 2008, respectively
|
5,970,676 | 4,933,797 | ||||||
Accrued
interest and dividends
|
958,506 | 1,225,070 | ||||||
Prepaid
expenses and other assets
|
1,713,632 | 1,215,146 | ||||||
Property
acquired in settlement of claims
|
285,376 | 395,734 | ||||||
Property,
net
|
4,018,601 | 4,422,318 | ||||||
Current
income taxes receivable
|
2,518,078 | 2,777,829 | ||||||
Deferred
income taxes, net
|
348,367 | 3,841,295 | ||||||
Total
Assets
|
$ | 145,448,328 | $ | 139,858,188 | ||||
Liabilities
and Stockholders' Equity
|
||||||||
Liabilities:
|
||||||||
Reserves
for claims
|
$ | 39,426,000 | $ | 39,238,000 | ||||
Accounts
payable and accrued liabilities
|
8,551,682 | 10,762,300 | ||||||
Total
liabilities
|
47,977,682 | 50,000,300 | ||||||
Commitments
and Contingencies
|
||||||||
Stockholders'
Equity:
|
||||||||
Class
A Junior Participating preferred stock (shares authorized 100,000; no
shares issued)
|
- | - | ||||||
Common
stock-no par value (shares authorized 10,000,000;
|
||||||||
2,286,222
and 2,293,268 shares issued and outstanding 2009 and 2008,
|
||||||||
respectively,
excluding 291,676 shares for 2009 and 2008
|
||||||||
of
common stock held by the Company's subsidiary)
|
1 | 1 | ||||||
Retained
earnings
|
92,372,351 | 88,248,452 | ||||||
Accumulated
other comprehensive income
|
5,098,294 | 1,609,435 | ||||||
Total
stockholders' equity
|
97,470,646 | 89,857,888 | ||||||
Total
Liabilities and Stockholders' Equity
|
$ | 145,448,328 | $ | 139,858,188 | ||||
See
notes to Consolidated Financial Statements.
|
Investors
Title Company and Subsidiaries
|
||||||||||||||||
For
the Three and Nine Months Ended September 30, 2009 and
2008
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 |
September
30
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenues:
|
||||||||||||||||
Underwriting
income:
|
||||||||||||||||
Premiums
written
|
$ | 14,306,677 | $ | 15,410,424 | $ | 49,662,835 | $ | 51,493,078 | ||||||||
Less-premiums
for reinsurance ceded
|
24,062 | 78,604 | 58,012 | 219,916 | ||||||||||||
Net
premiums written
|
14,282,615 | 15,331,820 | 49,604,823 | 51,273,162 | ||||||||||||
Investment
income - interest and dividends
|
911,982 | 1,079,760 | 2,862,071 | 3,471,800 | ||||||||||||
Net
realized loss on investments
|
(110,818 | ) | (545,883 | ) | (400,760 | ) | (669,586 | ) | ||||||||
Exchange
services revenue
|
175,608 | 542,528 | 800,335 | 1,013,940 | ||||||||||||
Other
|
1,103,230 | 1,188,338 | 3,799,116 | 3,720,966 | ||||||||||||
Total
Revenues
|
16,362,617 | 17,596,563 | 56,665,585 | 58,810,282 | ||||||||||||
Operating
Expenses:
|
||||||||||||||||
Commissions
to agents
|
6,838,090 | 6,707,688 | 23,202,041 | 21,976,896 | ||||||||||||
Provision
for claims
|
1,934,459 | 1,982,822 | 6,733,399 | 8,329,832 | ||||||||||||
Salaries,
employee benefits and payroll taxes
|
4,195,751 | 5,253,705 | 13,862,993 | 16,063,267 | ||||||||||||
Office
occupancy and operations
|
985,769 | 1,143,219 | 3,292,491 | 3,840,407 | ||||||||||||
Business
development
|
336,481 | 569,404 | 928,309 | 1,622,736 | ||||||||||||
Filing
fees and taxes, other than payroll and income
|
204,819 | 92,608 | 547,074 | 424,112 | ||||||||||||
Premium
and retaliatory taxes
|
270,352 | 210,233 | 1,013,124 | 1,029,298 | ||||||||||||
Professional
and contract labor fees
|
330,960 | 383,156 | 982,948 | 1,431,826 | ||||||||||||
Other
|
173,893 | 248,695 | 363,727 | 762,429 | ||||||||||||
Total
Operating Expenses
|
15,270,574 | 16,591,530 | 50,926,106 | 55,480,803 | ||||||||||||
Income
Before Income Taxes
|
1,092,043 | 1,005,033 | 5,739,479 | 3,329,479 | ||||||||||||
Provision
For Income Taxes
|
123,000 | 88,000 | 1,220,000 | 562,000 | ||||||||||||
Net
Income
|
$ | 969,043 | $ | 917,033 | $ | 4,519,479 | $ | 2,767,479 | ||||||||
Basic
Earnings Per Common Share
|
$ | 0.42 | $ | 0.39 | $ | 1.97 | $ | 1.16 | ||||||||
Weighted
Average Shares Outstanding - Basic
|
2,290,666 | 2,342,643 | 2,293,754 | 2,388,115 | ||||||||||||
Diluted
Earnings Per Common Share
|
$ | 0.42 | $ | 0.39 | $ | 1.96 | $ | 1.15 | ||||||||
Weighted
Average Shares Outstanding - Diluted
|
2,295,757 | 2,360,533 | 2,300,686 | 2,409,747 | ||||||||||||
Cash
Dividends Paid Per Common Share
|
$ | 0.07 | $ | 0.07 | $ | 0.21 | $ | 0.21 | ||||||||
See
notes to Consolidated Financial Statements.
|
Investors
Title Company and Subsidiaries
|
||||||||||||||||||||
For
the Nine Months Ended September 30, 2009 and 2008
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
Accumulated
|
|
|||||||||||||||||||
Common
Stock
|
Retained
|
Other
Comprehensive |
Total
Stockholders' |
|||||||||||||||||
Shares
|
Amount
|
Earnings
|
Income
|
Equity
|
||||||||||||||||
Balance,
December 31, 2007
|
2,411,318 | $ | 1 | $ | 95,739,827 | $ | 3,536,012 | $ | 99,275,840 | |||||||||||
Net
income
|
2,767,479 | 2,767,479 | ||||||||||||||||||
Dividends
($.21 per share)
|
(501,333 | ) | (501,333 | ) | ||||||||||||||||
Shares
of common stock repurchased and retired
|
(124,092 | ) | (5,759,881 | ) | (5,759,881 | ) | ||||||||||||||
Issuance
of common stock in payment of
|
||||||||||||||||||||
bonuses
and fees
|
40 | 1,946 | 1,946 | |||||||||||||||||
Stock
options exercised
|
11,280 | 216,403 | 216,403 | |||||||||||||||||
Share-based
compensation expense
|
69,889 | 69,889 | ||||||||||||||||||
Amortization
related to postretirement health benefits, net of tax
|
10,092 | 10,092 | ||||||||||||||||||
Net
unrealized loss on investments, net of tax
|
(2,857,991 | ) | (2,857,991 | ) | ||||||||||||||||
Balance,
September 30, 2008
|
2,298,546 | $ | 1 | $ | 92,534,330 | $ | 688,113 | $ | 93,222,444 | |||||||||||
Balance,
December 31, 2008
|
2,293,268 | $ | 1 | $ | 88,248,452 | $ | 1,609,435 | $ | 89,857,888 | |||||||||||
Net
income
|
4,519,479 | 4,519,479 | ||||||||||||||||||
Dividends
($.21 per share)
|
(481,591 | ) | (481,591 | ) | ||||||||||||||||
Shares
of common stock repurchased and retired
|
(11,771 | ) | (367,014 | ) | (367,014 | ) | ||||||||||||||
Stock
options exercised
|
4,725 | 80,011 | 80,011 | |||||||||||||||||
Share-based
compensation expense
|
373,014 | 373,014 | ||||||||||||||||||
Amortization
related to postretirement health benefits, net of tax
|
11,088 | 11,088 | ||||||||||||||||||
Net
unrealized gain on investments, net of tax
|
3,477,771 | 3,477,771 | ||||||||||||||||||
Balance,
September 30, 2009
|
2,286,222 | $ | 1 | $ | 92,372,351 | $ | 5,098,294 | $ | 97,470,646 | |||||||||||
See
notes to Consolidated Financial Statements.
|
Investors
Title Company and Subsidiaries
|
||||||||
For
the Nine Months Ended September 30, 2009 and 2008
|
||||||||
(Unaudited)
|
||||||||
2009
|
2008
|
|||||||
Operating
Activities:
|
||||||||
Net
income
|
$ | 4,519,479 | $ | 2,767,479 | ||||
Adjustments
to reconcile net income to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Depreciation
|
546,423 | 770,901 | ||||||
Amortization
on investments, net
|
214,511 | 237,374 | ||||||
Amortization
of prior service cost
|
16,799 | 15,291 | ||||||
Issuance
of common stock in payment of bonuses and fees
|
- | 1,946 | ||||||
Share-based
compensation expense related to stock options
|
373,014 | 69,889 | ||||||
Allowance
(benefit) for doubtful accounts on premiums receivable
|
85,000 | (837,000 | ) | |||||
Net
loss on disposals of property
|
15,207 | 10,684 | ||||||
Net
realized loss on investments
|
400,760 | 669,586 | ||||||
Net
earnings from other investments
|
(979,528 | ) | (667,377 | ) | ||||
Provision
for claims
|
6,733,399 | 8,329,832 | ||||||
Provision
for deferred income taxes
|
1,644,000 | 962,000 | ||||||
Changes
in assets and liabilities:
|
||||||||
(Increase)
decrease in receivables and other assets
|
(1,243,443 | ) | 1,169,113 | |||||
Decrease
in current income taxes receivable
|
259,751 | - | ||||||
Decrease
in accounts payable and accrued liabilities
|
(2,210,618 | ) | (594,738 | ) | ||||
Decrease
in current income taxes payable
|
- | (1,747,877 | ) | |||||
Payments
of claims, net of recoveries
|
(6,545,399 | ) | (8,014,832 | ) | ||||
Net
cash provided by operating activities
|
3,829,355 | 3,142,271 | ||||||
Investing
Activities:
|
||||||||
Purchases
of available-for-sale securities
|
(6,953,840 | ) | (2,817,230 | ) | ||||
Purchases
of short-term securities
|
(7,747,949 | ) | (6,211,596 | ) | ||||
Purchases
of other investments
|
(315,804 | ) | (514,404 | ) | ||||
Proceeds
from sales and maturities of available-for-sale securities
|
8,595,251 | 13,433,644 | ||||||
Proceeds
from maturities of held-to-maturity securities
|
260,000 | 505,000 | ||||||
Proceeds
from sales and maturities of short-term securities
|
6,081,587 | 1,165,189 | ||||||
Proceeds
from sales and distributions of other investments
|
840,802 | 768,013 | ||||||
Purchases
of property
|
(166,729 | ) | (123,901 | ) | ||||
Proceeds
from the sale of property
|
8,816 | - | ||||||
Net
cash provided by investing activities
|
602,134 | 6,204,715 | ||||||
Financing
Activities:
|
||||||||
Repurchases
of common stock, net
|
(367,014 | ) | (5,759,881 | ) | ||||
Exercise
of options
|
80,011 | 216,403 | ||||||
Dividends
paid
|
(481,591 | ) | (501,333 | ) | ||||
Net
cash used in financing activities
|
(768,594 | ) | (6,044,811 | ) | ||||
Net
Increase in Cash and Cash Equivalents
|
3,662,895 | 3,302,175 | ||||||
Cash
and Cash Equivalents, Beginning of Period
|
5,155,046 | 3,000,762 | ||||||
Cash
and Cash Equivalents, End of Period
|
$ | 8,817,941 | $ | 6,302,937 | ||||
Supplemental
Disclosures:
|
||||||||
Cash
(Received) Paid During the Period for:
|
||||||||
Income
Taxes, (refunds) payments, net
|
$ | (683,000 | ) | $ | 2,305,000 | |||
Non
cash net unrealized (gain) loss on investments, net of deferred
tax
|
||||||||
(provision)
benefit of ($1,843,217) and $1,478,492 for 2009 and
2008,
|
||||||||
respectively
|
$ | (3,477,771 | ) | $ | 2,857,991 | |||
See
notes to Consolidated Financial Statements.
|
September
30, 2009
|
December
31, 2008
|
||||||||
Balance,
beginning of period
|
$ | 39,238,000 | $ | 36,975,000 | |||||
Provision,
charged to operations
|
6,733,399 | 15,206,637 | |||||||
Payments
of claims, net of recoveries
|
(6,545,399 | ) | (12,943,637 | ) | |||||
Ending
balance
|
$ | 39,426,000 | $ | 39,238,000 |
September
30, 2009
|
%
|
December
31, 2008
|
%
|
|||||||||||||
Known
title claims
|
$ | 6,763,212 | 17.2 | $ | 6,447,345 | 16.4 | ||||||||||
IBNR
|
32,662,788 | 82.8 | 32,790,655 | 83.6 | ||||||||||||
Total
loss reserves
|
$ | 39,426,000 | 100.0 | $ | 39,238,000 | 100.0 |
Three
months ended
September 30, |
Nine
months ended
September 30, |
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
income
|
$ | 969,043 | $ | 917,033 | $ | 4,519,479 | $ | 2,767,479 | ||||||||
Weighted
average common shares outstanding - Basic
|
2,290,666 | 2,342,643 | 2,293,754 | 2,388,115 | ||||||||||||
Incremental
shares outstanding assuming the exercise of dilutive stock options
and SARs (share settled)
|
5,091 | 17,890 | 6,932 | 21,632 | ||||||||||||
Weighted
average common shares outstanding - Diluted
|
2,295,757 | 2,360,533 | 2,300,686 | 2,409,747 | ||||||||||||
Basic
earnings per common share
|
$ | 0.42 | $ | 0.39 | $ | 1.97 | $ | 1.16 | ||||||||
Diluted
earnings per common share
|
$ | 0.42 | $ | 0.39 | $ | 1.96 | $ | 1.15 |
Number
Of
Shares
|
Weighted
Average Exercise Price |
Average
Remaining Contractual Term (years) |
Aggregate
Intrinsic Value |
|||||||||||||
Outstanding
as of January 1, 2007
|
74,051
|
$
|
21.82
|
4.34
|
$
|
2,338,246
|
||||||||||
SARs
granted
|
3,000
|
49.04
|
||||||||||||||
Options
exercised
|
(15,390
|
)
|
23.74
|
|||||||||||||
Options/SARs
cancelled/forfeited/expired
|
(1,181
|
)
|
17.38
|
|||||||||||||
Outstanding
as of December 31, 2007
|
60,480
|
$
|
22.77
|
4.11
|
$
|
1,377,390
|
||||||||||
SARs
granted
|
3,000
|
47.88
|
||||||||||||||
Options
exercised
|
(12,360
|
)
|
18.67
|
|||||||||||||
Options/SARs
cancelled/forfeited/expired
|
(4,050
|
)
|
29.96
|
|||||||||||||
Outstanding
as of December 31, 2008
|
47,070
|
$
|
24.83
|
3.67
|
$
|
666,079
|
||||||||||
SARs
granted
|
78,000
|
28.13
|
||||||||||||||
Options
exercised
|
(4,725
|
)
|
16.93
|
|||||||||||||
Options/SARs
cancelled/forfeited/expired
|
(2,050
|
)
|
20.61
|
|||||||||||||
Outstanding
as of September 30, 2009
|
118,295
|
$
|
27.39
|
5.31
|
$
|
757,589
|
||||||||||
Exercisable
as of September 30, 2009
|
73,717
|
$
|
27.36
|
4.87
|
$
|
521,018
|
||||||||||
Unvested
as of September 30, 2009
|
44,578
|
$
|
27.44
|
6.03
|
$
|
236,571
|
2009
|
2008
|
2007
|
|
Expected
Life in Years
|
5.0
|
5.0
|
5.0
|
Volatility
|
34%
|
24%
|
25%
|
Interest
Rate
|
1.9%
|
3.1%
|
4.6%
|
Yield
Rate
|
0.9%
|
0.6%
|
0.5%
|
Three
Months Ended
September 30, 2009
|
Title
Insurance
|
Exchange
Services
|
All
Other
|
Intersegment
Eliminations
|
Total
|
|||||||||||||||
Operating
revenues
|
$ | 14,612,160 | $ | 175,608 | $ | 968,935 | $ | (195,250 | ) | $ | 15,561,453 | |||||||||
Investment
income
|
768,514 | 27 | 213,858 | (70,417 | ) | 911,982 | ||||||||||||||
Net
realized loss
on
investments
|
(20,071 | ) | - | (90,747 | ) | - | (110,818 | ) | ||||||||||||
Total
revenues
|
$ | 15,360,603 | $ | 175,635 | $ | 1,092,046 | $ | (265,667 | ) | $ | 16,362,617 | |||||||||
Operating
expenses
|
14,237,335 | 213,404 | 1,065,085 | (245,250 | ) | 15,270,574 | ||||||||||||||
Income
before
income
taxes
|
$ | 1,123,268 | $ | (37,769 | ) | $ | 26,961 | $ | (20,417 | ) | $ | 1,092,043 | ||||||||
Assets,
net
|
$ | 107,882,412 | $ | 5,329,173 | $ | 32,236,743 | $ | - | $ | 145,448,328 |
Three
Months Ended
|
||||||||||||||||||||
September 30, 2008
|
||||||||||||||||||||
Operating
revenues
|
$ | 15,764,122 | $ | 542,528 | $ | 952,770 | $ | (196,734 | ) | $ | 17,062,686 | |||||||||
Investment
income
|
850,925 | 769 | 248,483 | (20,417 | ) | 1,079,760 | ||||||||||||||
Net
realized loss on
investments
|
(542,392 | ) | - | (3,491 | ) | - | (545,883 | ) | ||||||||||||
Total
revenues
|
$ | 16,072,655 | $ | 543,297 | $ | 1,197,762 | $ | (217,151 | ) | $ | 17,596,563 | |||||||||
Operating
expenses
|
15,523,544 | 310,452 | 954,268 | (196,734 | ) | 16,591,530 | ||||||||||||||
Income
before
income
taxes
|
$ | 549,111 | $ | 232,845 | $ | 243,494 | $ | (20,417 | ) | $ | 1,005,033 | |||||||||
Assets,
net
|
$ | 108,574,776 | $ | 219,132 | $ | 32,767,501 | $ | - | $ | 141,561,409 | ||||||||||
Nine
Months Ended
September 30, 2009
|
Title
Insurance
|
Exchange
Services
|
All
Other
|
Intersegment
Eliminations
|
Total
|
|||||||||||||||
Operating
revenues
|
$ | 51,360,157 | $ | 803,999 | $ | 2,620,580 | $ | (580,462 | ) | $ | 54,204,274 | |||||||||
Investment
income
|
2,377,832 | 175 | 595,316 | (111,252 | ) | 2,862,071 | ||||||||||||||
Net
realized loss on
investments
|
(110,560 | ) | - | (290,200 | ) | - | (400,760 | ) | ||||||||||||
Total
revenues
|
$ | 53,627,429 | $ | 804,174 | $ | 2,925,696 | $ | (691,714 | ) | $ | 56,665,585 | |||||||||
Operating
expenses
|
48,201,588 | 458,083 | 2,896,897 | (630,462 | ) | 50,926,106 | ||||||||||||||
Income
before
income
taxes
|
$ | 5,425,841 | $ | 346,091 | $ | 28,799 | $ | (61,252 | ) | $ | 5,739,479 | |||||||||
Assets,
net
|
$ | 107,882,412 | $ | 5,329,173 | $ | 32,236,743 | $ | - | $ | 145,448,328 |
Nine
Months Ended
|
||||||||||||||||||||
September 30, 2008
|
||||||||||||||||||||
Operating
revenues
|
$ | 52,846,663 | $ | 1,013,940 | $ | 2,734,729 | $ | (587,264 | ) | $ | 56,008,068 | |||||||||
Investment
income
|
2,703,141 | 36,147 | 793,764 | (61,252 | ) | 3,471,800 | ||||||||||||||
Net
realized loss on
investments
|
(657,628 | ) | - | (11,958 | ) | - | (669,586 | ) | ||||||||||||
Total
revenues
|
$ | 54,892,176 | $ | 1,050,087 | $ | 3,516,535 | $ | (648,516 | ) | $ | 58,810,282 | |||||||||
Operating
expenses
|
51,988,712 | 989,416 | 3,089,939 | (587,264 | ) | 55,480,803 | ||||||||||||||
Income
before
income
taxes
|
$ | 2,903,464 | $ | 60,671 | $ | 426,596 | $ | (61,252 | ) | $ | 3,329,479 | |||||||||
Assets,
net
|
$ | 108,574,776 | $ | 219,132 | $ | 32,767,501 | $ | - | $ | 141,561,409 |
For
the Three
Months
Ended
September 30,
|
For
the Nine
Months
Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Service
cost – benefits earned during the year
|
$ | 5,959 | $ | 4,334 | $ | 17,875 | $ | 13,002 | ||||||||
Interest
cost on the projected benefit obligation
|
6,743 | 4,761 | 20,229 | 14,283 | ||||||||||||
Amortization
of unrecognized prior service cost
|
5,097 | 5,097 | 15,292 | 15,291 | ||||||||||||
Amortization
of unrecognized gains
|
502 | - | 1,507 | - | ||||||||||||
Net
periodic benefits costs
|
$ | 18,301 | $ | 14,192 | $ | 54,903 | $ | 42,576 |
Available-for-sale
securities
|
Carrying Balance
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Obligations
of states and political subdivisions
|
$ | 73,387,734 | $ | - | $ | 65,830,029 | $ | 7,557,705 | ||||||||
Corporate
debt securities
|
15,946,425 | - | 13,159,875 | 2,786,550 | ||||||||||||
Equity
|
11,672,102 | 11,672,102 | - | - | ||||||||||||
Short-term
investments
|
17,333,264 | 17,333,264 | - | - | ||||||||||||
Total
|
$ | 118,339,525 | $ | 29,005,366 | $ | 78,989,904 | $ | 10,344,255 |
Changes in fair value during the period ended
September 30, 2009:
|
Level 3
|
|||
Beginning
balance at January 1, 2009
|
$ | 7,596,920 | ||
Additions
in 2009
|
3,708,280 | |||
Redemptions
in 2009
|
(1,200,000 | ) | ||
Unrealized
gains - included in other comprehensive income
|
239,055 | |||
Ending
balance at September 30, 2009
|
$ | 10,344,255 |
Gross
|
Gross
|
Estimated
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
September
30, 2009
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Fixed
Maturities-
|
||||||||||||||||
Held-to-maturity,
at amortized cost-
|
||||||||||||||||
Obligations
of states and political subdivisions
|
$ | 197,509 | $ | 5,071 | $ | - | $ | 202,580 | ||||||||
Total
|
$ | 197,509 | $ | 5,071 | $ | - | $ | 202,580 | ||||||||
Fixed
Maturities-
|
||||||||||||||||
Available-for-sale,
at fair value:
|
||||||||||||||||
Obligations
of states and political subdivisions
|
$ | 69,443,464 | $ | 4,558,295 | $ | 614,025 | $ | 73,387,734 | ||||||||
Corporate
debt securities
|
14,772,032 | 1,174,393 | - | 15,946,425 | ||||||||||||
Total
|
$ | 84,215,496 | $ | 5,732,688 | $ | 614,025 | $ | 89,334,159 | ||||||||
Equity
Securities, available-for-sale at fair value-
|
||||||||||||||||
Common
stocks and nonredeemable preferred stocks
|
$ | 8,878,349 | $ | 2,939,635 | $ | 145,882 | $ | 11,672,102 | ||||||||
Total
|
$ | 8,878,349 | $ | 2,939,635 | $ | 145,882 | $ | 11,672,102 | ||||||||
Short-term
investments-
|
||||||||||||||||
Certificates
of deposit and other
|
$ | 17,391,875 | $ | - | $ | - | $ | 17,391,875 | ||||||||
Total
|
$ | 17,391,875 | $ | - | $ | - | $ | 17,391,875 |
Gross
|
Gross
|
Estimated
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
December
31, 2008
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Fixed
Maturities-
|
||||||||||||||||
Held-to-maturity,
at amortized cost-
|
||||||||||||||||
Obligations
of states and political subdivisions
|
$ | 451,681 | $ | 10,899 | $ | - | $ | 462,580 | ||||||||
Total
|
$ | 451,681 | $ | 10,899 | $ | - | $ | 462,580 | ||||||||
Fixed
Maturities-
|
||||||||||||||||
Available-for-sale,
at fair value:
|
||||||||||||||||
Obligations
of states and political subdivisions
|
$ | 72,818,413 | $ | 2,178,686 | $ | 986,503 | $ | 74,010,596 | ||||||||
Corporate
debt securities
|
13,105,170 | 606,001 | 13,267 | 13,697,904 | ||||||||||||
Total
|
$ | 85,923,583 | $ | 2,784,687 | $ | 999,770 | $ | 87,708,500 | ||||||||
Equity
Securities, available-for-sale at fair value-
|
||||||||||||||||
Common
stocks and nonredeemable preferred stocks
|
$ | 9,158,785 | $ | 1,446,389 | $ | 639,877 | $ | 9,965,297 | ||||||||
Total
|
$ | 9,158,785 | $ | 1,446,389 | $ | 639,877 | $ | 9,965,297 | ||||||||
Short-term
investments-
|
||||||||||||||||
Certificates
of deposit and other
|
$ | 15,725,513 | $ | - | $ | - | $ | 15,725,513 | ||||||||
Total
|
$ | 15,725,513 | $ | - | $ | - | $ | 15,725,513 |
Available-for-Sale
|
Held-to-Maturity
|
|||||||||||||||
Amortized
|
Fair
|
Amortized
|
Fair
|
|||||||||||||
Cost
|
Value
|
Cost
|
Value
|
|||||||||||||
Due
in one year or less
|
$ | 7,022,271 | $ | 7,209,212 | $ | 2,000 | $ | 2,048 | ||||||||
Due
after one year through five years
|
25,914,170 | 27,726,617 | - | - | ||||||||||||
Due
five years through ten years
|
34,114,729 | 36,934,529 | 195,509 | 200,532 | ||||||||||||
Due
after ten years
|
17,164,326 | 17,463,801 | - | - | ||||||||||||
Total
|
$ | 84,215,496 | $ | 89,334,159 | $ | 197,509 | $ | 202,580 |
2009
|
2008
|
||||||||
Proceeds
|
$ | 15,777,640 | $ | 15,871,846 | |||||
Gross
realized gains:
|
|||||||||
Obligations
of states and political subdivisions
|
$ | 5,496 | $ | 24,726 | |||||
Common
stocks and nonredeemable preferred stocks
|
387,556 | 261,195 | |||||||
Total
|
393,052 | 285,921 | |||||||
Gross
realized losses:
|
|||||||||
Obligations
of states and political subdivisions
|
$ | - | $ | (352,093 | ) | ||||
Common
stocks and nonredeemable preferred stocks
|
(519,826 | ) | (609,014 | ) | |||||
Total
|
(519,826 | ) | (961,107 | ) | |||||
Net
realized loss
|
$ | (126,774 | ) | $ | (675,186 | ) |
Less
than 12 Months
|
12
Months or Longer
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
September
30, 2009
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
||||||||||||||||||
Auction
rate securities
|
$ | - | $ | - | $ | 6,635,975 | $ | (614,025 | ) | $ | 6,635,975 | $ | ( 614,025 | ) | ||||||||||
Obligations
of states and political subdivisions
|
- | - | - | - | - | - | ||||||||||||||||||
Total
Fixed Income Securities
|
- | - | 6,635,975 | (614,025 | ) | 6,635,975 | (614,025 | ) | ||||||||||||||||
Equity
Securities
|
757,608 | (52,045 | ) | 905,448 | (93,837 | ) | 1,663,056 | (145,882 | ) | |||||||||||||||
Total
temporarily impaired securities
|
$ | 757,608 | $ | (52,045 | ) | $ | 7,541,423 | $ | (707,862 | ) | $ | 8,299,031 | $ | (759,907 | ) |
Less
than 12 Months
|
12
Months or Longer
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
December
31, 2008
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
||||||||||||||||||
Auction
rate securities
|
$ | 7,596,920 | $ | (490,710 | ) | $ | - | $ | - | $ | 7,596,920 | $ | (490,710 | ) | ||||||||||
Obligations
of states and political subdivisions
|
4,948,539 | (480,203 | ) | 777,257 | (15,590 | ) | 5,725,796 | (495,793 | ) | |||||||||||||||
Corporate
debt securities
|
2,835,170 | (13,267 | ) | - | - | 2,835,170 | (13,267 | ) | ||||||||||||||||
Total
Fixed Income Securities
|
15,380,629 | (984,180 | ) | 777,257 | (15,590 | ) | 16,157,886 | (999,770 | ) | |||||||||||||||
Equity
Securities
|
3,002,004 | (559,410 | ) | 337,970 | (80,467 | ) | 3,339,974 | (639,877 | ) | |||||||||||||||
Total
temporarily impaired securities
|
$ | 18,382,633 | $ | (1,543,590 | ) | $ | 1,115,227 | $ | (96,057 | ) | $ | 19,497,860 | $ | (1,639,647 | ) |
Financial
Statement Classification
|
September
30,
|
December
31,
|
||||||
Consolidated
Balance Sheets
|
2009
|
2008
|
||||||
Other
investments
|
$ | 1,425,000 | $ | 1,146,000 | ||||
Premiums
and fees receivable
|
$ | 542,000 | $ | 432,000 |
Financial
Statement Classification
|
For
the three months ended
September
30,
|
For
the nine months ended
September 30, |
||||||||||||||
Consolidated
Statements of Income
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Other
income
|
$ | 226,000 | $ | 358,000 | $ | 1,384,000 | $ | 1,098,000 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||||||||||||||||
2009
|
%
|
2008
|
%
|
2009
|
%
|
2008
|
%
|
|||||||||||||||||||||||||
Branch
|
$ | 4,680,845 | 33 | $ | 5,685,856 | 37 | $ | 17,380,223 | 35 | $ | 19,951,977 | 39 | ||||||||||||||||||||
Agency
|
9,601,770 | 67 | 9,645,964 | 63 | 32,224,600 | 65 | 31,321,185 | 61 | ||||||||||||||||||||||||
Total
|
$ | 14,282,615 | 100 | $ | 15,331,820 | 100 | $ | 49,604,823 | 100 | $ | 51,273,162 | 100 |
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
|||||||||||||||
State
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Illinois
|
$ | 478,044 | $ | 429,954 | $ | 2,335,265 | $ | 1,584,507 | ||||||||
Kentucky
|
713,474 | 761,945 | 2,533,651 | 2,393,886 | ||||||||||||
Michigan
|
1,123,194 | 781,939 | 3,753,889 | 2,732,501 | ||||||||||||
New
York
|
523,629 | 472,152 | 2,359,472 | 1,670,039 | ||||||||||||
North
Carolina
|
6,000,363 | 7,305,962 | 21,857,728 | 25,022,108 | ||||||||||||
Pennsylvania
|
588,988 | 423,695 | 2,074,806 | 1,388,971 | ||||||||||||
South
Carolina
|
1,690,176 | 1,962,189 | 4,222,027 | 5,878,324 | ||||||||||||
Tennessee
|
610,055 | 564,210 | 1,928,614 | 1,719,884 | ||||||||||||
Virginia
|
1,226,751 | 1,492,819 | 3,927,202 | 4,701,446 | ||||||||||||
West
Virginia
|
572,892 | 504,672 | 1,730,612 | 1,617,107 | ||||||||||||
Other
States
|
771,761 | 709,837 | 2,931,419 | 2,686,711 | ||||||||||||
Direct
Premiums
|
14,299,327 | 15,409,374 | 49,654,685 | 51,395,484 | ||||||||||||
Reinsurance
Assumed
|
7,350 | 1,050 | 8,150 | 97,594 | ||||||||||||
Reinsurance
Ceded
|
(24,062 | ) | (78,604 | ) | (58,012 | ) | (219,916 | ) | ||||||||
Net
Premiums
|
$ | 14,282,615 | $ | 15,331,820 | $ | 49,604,823 | $ | 51,273,162 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||||||||||||||||
2009
|
%
|
2008
|
%
|
2009
|
%
|
2008
|
%
|
|||||||||||||||||||||||||
Title
insurance
|
$ | 14,064,863 | 92 | $ | 15,353,302 | 92 | $ | 47,690,427 | 94 | $ | 51,480,504 | 93 | ||||||||||||||||||||
Exchange
services
|
151,822 | 1 | 297,565 | 2 | 373,293 | 1 | 947,917 | 2 | ||||||||||||||||||||||||
All
other
|
1,053,889 | 7 | 940,663 | 6 | 2,862,386 | 5 | 3,052,382 | 5 | ||||||||||||||||||||||||
Total
|
$ | 15,270,574 | 100 | $ | 16,591,530 | 100 | $ | 50,926,106 | 100 | $ | 55,480,803 | 100 |
·
|
the
level of real estate transactions, the level of mortgage origination
volumes (including refinancing) and changes to the insurance requirements
of participants in the secondary mortgage market, and the effect of these
factors on the demand for title
insurance;
|
·
|
changes
in general economic conditions, including the performance of the capital,
credit and real estate markets;
|
·
|
significant
changes to applicable government
regulations;
|
·
|
the
possible inadequacy of provisions for claims to cover actual claim
losses;
|
·
|
the
incidence of fraud-related losses;
|
·
|
heightened
regulatory scrutiny;
|
·
|
unanticipated
adverse changes in securities markets including interest rates, which
could result in material losses on the Company’s
investments;
|
·
|
the
Company’s dependence on key management personnel, the loss of whom could
have a material adverse affect on the Company’s
business;
|
·
|
the
Company’s ability to develop and offer products and services that meet
changing industry standards in a timely and cost-effective
manner;
|
·
|
statutory
requirements applicable to the Company’s insurance subsidiaries which
require them to maintain minimum levels of capital, surplus and reserves
and restrict the amount of dividends that they may pay to the Company
without prior regulatory
approval; and
|
·
|
the
information set forth under the caption “Risk Factors” in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2008 and in
subsequent SEC filings.
|
(a)
|
None
|
(b)
|
None
|
(c)
|
The
following table provides information about purchases by the Company (and
all affiliated purchasers) during the quarter ended September 30, 2009 of
equity securities that are registered by the Company pursuant to Section
12 of the Exchange Act:
|
Period
|
Total
Number
of Shares Purchased |
Average
Price
Paid per Share |
Total
Number
of Shares Purchased as Part of Publicly Announced Plan |
Maximum
Number of Shares that May Yet Be Purchased Under the Plan |
||||||||||||
Beginning
of period
|
499,182 | |||||||||||||||
07/01/09–
07/31/09
|
75 | $ | 25.90 | 75 | 499,107 | |||||||||||
08/01/09–
08/31/09
|
8,990 | $ | 31.25 | 8,990 | 490,117 | |||||||||||
09/01/09–
09/30/09
|
2,420 | $ | 31.25 | 2,420 | 487,697 | |||||||||||
Total:
|
11,485 | $ | 31.21 | 11,485 | 487,697 |
(a)
|
Exhibits
|
INVESTORS
TITLE COMPANY
|
|||
|
By:
|
/s/ James A. Fine, Jr.
|
|
James
A. Fine, Jr.
|
|||
President,
Principal Financial Officer and
|
|||
Principal
Accounting Officer
|