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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Investors Title Company | NASDAQ:ITIC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
2.96 | 1.59% | 189.01 | 188.01 | 190.00 | 189.02 | 187.20 | 187.20 | 19,612 | 17:39:22 |
[ X ]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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North Carolina
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56-1110199
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(State of incorporation)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
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Accelerated filer
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X
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Non-accelerated filer
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Smaller reporting company
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(do not check if a smaller reporting company)
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PART I.
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FINANCIAL INFORMATION
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Item 1.
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Financial Statements:
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Consolidated Balance Sheets as of
June 30, 2014 and December 31, 2013
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Consolidated Statements of Income For the Three
and Six Months Ended June 30, 2014 and 2013
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Consolidated Statements of Comprehensive Income For the Three
and Six Months Ended June 30, 2014 and 2013
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Consolidated Statements of Stockholders’ Equity For the
Six Months Ended June 30, 2014 and 2013
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Consolidated Statements of Cash Flows For the
Six Months Ended June 30, 2014 and 2013
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PART II.
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OTHER INFORMATION
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Legal Proceeding
s
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Risk Factors
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June 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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|
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Fixed maturities, available-for-sale, at fair value (amortized cost: 2014: $86,162,748; 2013: $87,980,160)
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$
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90,978,622
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$
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91,445,413
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Equity securities, available-for-sale, at fair value (cost: 2014: $23,450,256; 2013: $22,200,369)
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38,193,808
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36,144,065
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Short-term investments
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9,695,708
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7,926,373
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Other investments
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7,949,171
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7,247,831
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Total investments
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146,817,309
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142,763,682
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Cash and cash equivalents
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19,501,886
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23,626,761
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Premium and fees receivable
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8,630,916
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8,750,224
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Accrued interest and dividends
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981,541
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1,006,698
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Prepaid expenses and other assets
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8,459,543
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7,466,141
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Property, net
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4,981,955
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4,325,538
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Current income taxes recoverable
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1,879,224
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366,772
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Total Assets
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$
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191,252,374
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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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35,628,000
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$
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35,360,000
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Accounts payable and accrued liabilities
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17,225,696
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20,324,190
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Deferred income taxes, net
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5,496,643
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4,013,983
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Total liabilities
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58,350,339
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59,698,173
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Commitments and Contingencies
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—
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—
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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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Preferred stock (1,000,000 authorized shares; no shares issued)
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—
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—
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Common stock - no par value (10,000,000 authorized shares; 2,029,819 and 2,037,135 shares issued and outstanding 2014 and 2013, respectively, excluding 291,676 shares for 2014 and 2013 of common 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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120,148,704
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116,714,749
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Accumulated other comprehensive income
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12,753,330
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11,347,404
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Total stockholders’ equity
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132,902,035
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128,062,154
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Total Liabilities and Stockholders’ Equity
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$
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191,252,374
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$
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188,305,816
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Three Months Ended
June 30,
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Six Months Ended
June 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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29,849,853
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$
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30,429,761
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$
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54,759,105
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$
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54,355,758
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Investment income - interest and dividends
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1,039,435
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925,047
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2,065,851
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1,845,532
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Net realized gain on investments
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92,082
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55,272
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584,219
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71,616
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Other
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2,240,183
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2,283,320
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4,266,452
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4,268,767
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Total Revenues
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33,221,553
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33,693,400
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61,675,627
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60,541,673
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Operating Expenses:
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Commissions to agents
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18,346,381
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17,608,789
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33,802,659
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31,098,220
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Provision for claims
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294,281
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996,870
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2,669,664
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607,812
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Salaries, employee benefits and payroll taxes
|
6,454,930
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6,249,723
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12,640,691
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12,400,473
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Office occupancy and operations
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1,246,644
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1,026,108
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2,426,971
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2,100,341
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|
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Business development
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511,763
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452,353
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1,029,657
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881,086
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|
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Filing fees, franchise and local taxes
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225,343
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188,950
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414,943
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369,520
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Premium and retaliatory taxes
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546,091
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530,524
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840,565
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971,047
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Professional and contract labor fees
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666,909
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535,207
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1,354,967
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1,110,544
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Other
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250,167
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234,826
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459,951
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381,162
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Total Operating Expenses
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28,542,509
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27,823,350
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55,640,068
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49,920,205
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Income before Income Taxes
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4,679,044
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5,870,050
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6,035,559
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10,621,468
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Provision for Income Taxes
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1,281,000
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1,846,000
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1,652,000
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3,211,000
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Net Income
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3,398,044
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4,024,050
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4,383,559
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7,410,468
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Net Income Attributable to Redeemable Noncontrolling Interest
|
(24,446
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)
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|
(18,375
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)
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(23,523
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)
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(28,063
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)
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Net Income Attributable to the Company
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$
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3,373,598
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$
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4,005,675
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$
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4,360,036
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$
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7,382,405
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||||||||
Basic Earnings per Common Share
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$
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1.66
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$
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1.94
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$
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2.14
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$
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3.59
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||||||||
Weighted Average Shares Outstanding – Basic
|
2,034,931
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2,063,797
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2,036,047
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2,054,300
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Diluted Earnings per Common Share
|
$
|
1.65
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$
|
1.92
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$
|
2.14
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$
|
3.54
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||||||||
Weighted Average Shares Outstanding – Diluted
|
2,039,202
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2,089,674
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2,041,268
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2,087,229
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Cash Dividends Paid per Common Share
|
$
|
0.08
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$
|
0.08
|
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$
|
0.16
|
|
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$
|
0.16
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income
|
$
|
3,398,044
|
|
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$
|
4,024,050
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|
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$
|
4,383,559
|
|
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$
|
7,410,468
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
|
|
|
|
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Amortization (accretion) related to prior year service cost
|
555
|
|
|
(379
|
)
|
|
1,109
|
|
|
(759
|
)
|
||||
Amortization of unrecognized loss
|
—
|
|
|
1,574
|
|
|
—
|
|
|
3,147
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|
||||
Unrealized gains (losses) on investments arising during the period
|
2,208,475
|
|
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(1,649,518
|
)
|
|
2,984,115
|
|
|
749,471
|
|
||||
Reclassification adjustment for sales of securities included in net income
|
(68,364
|
)
|
|
(70,857
|
)
|
|
(833,636
|
)
|
|
(105,686
|
)
|
||||
Reclassification adjustment for write-downs of securities included in net income
|
—
|
|
|
15,585
|
|
|
—
|
|
|
34,070
|
|
||||
Other comprehensive income (loss), before tax
|
2,140,666
|
|
|
(1,703,595
|
)
|
|
2,151,588
|
|
|
680,243
|
|
||||
Income tax expense related to postretirement health benefits
|
189
|
|
|
408
|
|
|
377
|
|
|
813
|
|
||||
Income tax expense (benefit) related to unrealized gains (losses) on investments arising during the year
|
761,231
|
|
|
(568,422
|
)
|
|
1,031,035
|
|
|
260,323
|
|
||||
Income tax benefit related to reclassification adjustment for sales of securities included in net income
|
(23,213
|
)
|
|
(24,609
|
)
|
|
(285,750
|
)
|
|
(36,598
|
)
|
||||
Income tax expense related to reclassification adjustment for write-downs of securities included in net income
|
—
|
|
|
6,007
|
|
|
—
|
|
|
13,134
|
|
||||
Net income tax expense (benefit) on other comprehensive income (loss)
|
738,207
|
|
|
(586,616
|
)
|
|
745,662
|
|
|
237,672
|
|
||||
Other comprehensive income (loss)
|
1,402,459
|
|
|
(1,116,979
|
)
|
|
1,405,926
|
|
|
442,571
|
|
||||
Comprehensive Income
|
$
|
4,800,503
|
|
|
$
|
2,907,071
|
|
|
$
|
5,789,485
|
|
|
$
|
7,853,039
|
|
Comprehensive income attributable to redeemable noncontrolling interest
|
(24,446
|
)
|
|
(18,375
|
)
|
|
(23,523
|
)
|
|
(28,063
|
)
|
||||
Comprehensive Income Attributable to the Company
|
$
|
4,776,057
|
|
|
$
|
2,888,696
|
|
|
$
|
5,765,962
|
|
|
$
|
7,824,976
|
|
|
Common Stock
|
|
Retained Earnings
|
|
|
Accumulated
Other
Comprehensive
Income
|
|
|
Total
Stockholders’
Equity
|
|
||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balance, January 1, 2013
|
2,043,359
|
|
|
$
|
1
|
|
|
$
|
105,820,459
|
|
|
$
|
8,818,430
|
|
|
$
|
114,638,890
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
7,382,405
|
|
|
|
|
|
7,382,405
|
|
||||
Dividends ($0.16 per share)
|
|
|
|
|
|
|
(329,569
|
)
|
|
|
|
|
(329,569
|
)
|
||||
Shares of common stock repurchased and retired
|
(19,460
|
)
|
|
|
|
|
(1,378,131
|
)
|
|
|
|
|
(1,378,131
|
)
|
||||
Stock options and stock appreciation rights exercised
|
49,749
|
|
|
|
|
|
68,032
|
|
|
|
|
|
68,032
|
|
||||
Share-based compensation expense
|
|
|
|
|
|
|
40,092
|
|
|
|
|
|
40,092
|
|
||||
Amortization related to postretirement health benefits
|
|
|
|
|
|
|
|
|
|
1,575
|
|
|
1,575
|
|
||||
Net unrealized gain on investments
|
|
|
|
|
|
|
|
|
|
440,996
|
|
|
440,996
|
|
||||
Income tax benefit from share-based compensation
|
|
|
|
|
935,563
|
|
|
|
|
935,563
|
|
|||||||
Balance, June 30, 2013
|
2,073,648
|
|
|
$
|
1
|
|
|
$
|
112,538,851
|
|
|
$
|
9,261,001
|
|
|
$
|
121,799,853
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, January 1, 2014
|
2,037,135
|
|
|
$
|
1
|
|
|
$
|
116,714,749
|
|
|
$
|
11,347,404
|
|
|
$
|
128,062,154
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
4,360,036
|
|
|
|
|
|
4,360,036
|
|
||||
Dividends ($0.16 per share)
|
|
|
|
|
|
|
(325,822
|
)
|
|
|
|
|
(325,822
|
)
|
||||
Shares of common stock repurchased and retired
|
(8,823
|
)
|
|
|
|
|
(584,121
|
)
|
|
|
|
|
(584,121
|
)
|
||||
Stock options and stock appreciation rights exercised
|
1,507
|
|
|
|
|
|
27,100
|
|
|
|
|
|
27,100
|
|
||||
Share-based compensation expense
|
|
|
|
|
|
|
55,083
|
|
|
|
|
|
55,083
|
|
||||
Amortization related to postretirement health benefits
|
|
|
|
|
|
|
|
|
|
732
|
|
|
732
|
|
||||
Net unrealized gain on investments
|
|
|
|
|
|
|
|
|
|
1,405,194
|
|
|
1,405,194
|
|
||||
Purchase of redeemable noncontrolling interest of subsidiary
|
|
|
|
|
(114,320
|
)
|
|
|
|
(114,320
|
)
|
|||||||
Income tax benefit from share-based compensation
|
|
|
|
|
|
|
15,999
|
|
|
|
|
|
15,999
|
|
||||
Balance, June 30, 2014
|
2,029,819
|
|
|
$
|
1
|
|
|
$
|
120,148,704
|
|
|
$
|
12,753,330
|
|
|
$
|
132,902,035
|
|
|
Six Months Ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
4,383,559
|
|
|
$
|
7,410,468
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation
|
406,133
|
|
|
292,732
|
|
||
Amortization, net
|
301,398
|
|
|
215,253
|
|
||
Amortization related to postretirement benefits obligation
|
1,109
|
|
|
2,388
|
|
||
Share-based compensation expense related to stock options
|
55,083
|
|
|
40,092
|
|
||
Net (gain) loss on the disposals of property
|
(1,900
|
)
|
|
1,435
|
|
||
Net realized gain on investments
|
(584,219
|
)
|
|
(71,616
|
)
|
||
Net earnings from other investments
|
(684,781
|
)
|
|
(815,714
|
)
|
||
Provision for claims
|
2,669,664
|
|
|
607,812
|
|
||
Provision for deferred income taxes
|
737,000
|
|
|
1,517,000
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
||
Decrease in receivables
|
119,308
|
|
|
230,631
|
|
||
Increase in other assets
|
(1,003,088
|
)
|
|
(3,315,234
|
)
|
||
Increase in current income taxes recoverable
|
(1,512,452
|
)
|
|
(771,419
|
)
|
||
(Decrease) increase in accounts payable and accrued liabilities
|
(3,098,494
|
)
|
|
1,698,084
|
|
||
Decrease in current income taxes payable
|
—
|
|
|
(1,336,824
|
)
|
||
Payments of claims, net of recoveries
|
(2,401,664
|
)
|
|
(918,812
|
)
|
||
Net cash (used in) provided by operating activities
|
(613,344
|
)
|
|
4,786,276
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
||
Purchases of available-for-sale securities
|
(5,184,440
|
)
|
|
(641,302
|
)
|
||
Purchases of short-term securities
|
(3,770,868
|
)
|
|
(3,835,960
|
)
|
||
Purchases of other investments
|
(786,575
|
)
|
|
(780,778
|
)
|
||
Purchase of subsidiary
|
—
|
|
|
(350,000
|
)
|
||
Proceeds from sales and maturities of available-for-sale securities
|
6,319,047
|
|
|
5,230,400
|
|
||
Proceeds from sales and maturities of short-term securities
|
2,001,533
|
|
|
1,325,143
|
|
||
Proceeds from sales and distributions of other investments
|
494,365
|
|
|
1,072,467
|
|
||
Proceeds from sales of other assets
|
26,233
|
|
|
25,308
|
|
||
Purchase of redeemable noncontrolling interest of subsidiary
|
(515,275
|
)
|
|
—
|
|
||
Purchases of property
|
(1,062,550
|
)
|
|
(538,466
|
)
|
||
Proceeds from the sale of property
|
1,900
|
|
|
3,135
|
|
||
Net cash (used in) provided by investing activities
|
(2,476,630
|
)
|
|
1,509,947
|
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||
Repurchases of common stock
|
(584,121
|
)
|
|
(1,378,131
|
)
|
||
Exercises of stock options and SARs
|
27,100
|
|
|
68,032
|
|
||
Distributions to noncontrolling interest
|
(168,057
|
)
|
|
—
|
|
||
Excess tax benefits related to exercise of stock options and SARs
|
15,999
|
|
|
935,563
|
|
||
Dividends paid
|
(325,822
|
)
|
|
(329,569
|
)
|
||
Net cash used in financing activities
|
(1,034,901
|
)
|
|
(704,105
|
)
|
||
|
|
|
|
||||
Net (Decrease) Increase in Cash and Cash Equivalents
|
(4,124,875
|
)
|
|
5,592,118
|
|
||
Cash and Cash Equivalents, Beginning of Period
|
23,626,761
|
|
|
20,810,018
|
|
||
Cash and Cash Equivalents, End of Period
|
$
|
19,501,886
|
|
|
$
|
26,402,136
|
|
Consolidated Statements of Cash Flows, continued
|
|
||||||
|
Six Months Ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
Supplemental Disclosures:
|
|
|
|
||||
Cash Paid During the Year for:
|
|
|
|
||||
Income tax payments, net
|
$
|
2,414,900
|
|
|
$
|
2,892,000
|
|
Non Cash Investing and Financing Activities
|
|
|
|
||||
Non cash net unrealized gain on investments, net of deferred tax provision of $(745,285) and $(236,859) for 2014 and 2013, respectively
|
$
|
(1,405,194
|
)
|
|
$
|
(440,996
|
)
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
Balance, beginning of period
|
$
|
35,360,000
|
|
|
$
|
39,078,000
|
|
Provision (benefit), charged to operations
|
2,669,664
|
|
|
(571,596
|
)
|
||
Payments of claims, net of recoveries
|
(2,401,664
|
)
|
|
(3,146,404
|
)
|
||
Ending balance
|
$
|
35,628,000
|
|
|
$
|
35,360,000
|
|
|
June 30, 2014
|
|
%
|
|
December 31, 2013
|
|
%
|
||||
Known title claims
|
$
|
4,965,961
|
|
|
13.9
|
|
$
|
4,670,809
|
|
|
13.2
|
IBNR
|
30,662,039
|
|
|
86.1
|
|
30,689,191
|
|
|
86.8
|
||
Total loss reserves
|
$
|
35,628,000
|
|
|
100.0
|
|
$
|
35,360,000
|
|
|
100.0
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income attributable to the Company
|
$
|
3,373,598
|
|
|
$
|
4,005,675
|
|
|
$
|
4,360,036
|
|
|
$
|
7,382,405
|
|
Weighted average common shares outstanding – Basic
|
2,034,931
|
|
|
2,063,797
|
|
|
2,036,047
|
|
|
2,054,300
|
|
||||
Incremental shares outstanding assuming the exercise of dilutive stock options and SARs (share-settled)
|
4,271
|
|
|
25,877
|
|
|
5,221
|
|
|
32,929
|
|
||||
Weighted average common shares outstanding – Diluted
|
2,039,202
|
|
|
2,089,674
|
|
|
2,041,268
|
|
|
2,087,229
|
|
||||
Basic earnings per common share
|
$
|
1.66
|
|
|
$
|
1.94
|
|
|
$
|
2.14
|
|
|
$
|
3.59
|
|
Diluted earnings per common share
|
$
|
1.65
|
|
|
$
|
1.92
|
|
|
$
|
2.14
|
|
|
$
|
3.54
|
|
|
Number
Of Shares
|
|
Weighted
Average
Exercise
Price
|
|
Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding as of January 1, 2013
|
98,150
|
|
|
$
|
30.74
|
|
|
3.17
|
|
$
|
2,871,710
|
|
SARs granted
|
3,000
|
|
|
71.59
|
|
|
|
|
|
|
||
SARs exercised
|
(79,500
|
)
|
|
28.77
|
|
|
|
|
|
|
||
Options exercised
|
(2,650
|
)
|
|
28.63
|
|
|
|
|
|
|
||
Options/SARs canceled/forfeited/expired
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Outstanding as of December 31, 2013
|
19,000
|
|
|
$
|
45.74
|
|
|
3.43
|
|
$
|
669,610
|
|
SARs granted
|
4,500
|
|
|
68.70
|
|
|
|
|
|
|
||
SARs exercised
|
(1,500
|
)
|
|
49.04
|
|
|
|
|
|
|
||
Options exercised
|
(1,000
|
)
|
|
27.21
|
|
|
|
|
|
|
||
Options/SARs canceled/forfeited/expired
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Outstanding as of June 30, 2014
|
21,000
|
|
|
$
|
51.30
|
|
|
4.15
|
|
$
|
356,160
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable as of June 30, 2014
|
17,625
|
|
|
$
|
47.97
|
|
|
3.62
|
|
$
|
356,160
|
|
|
|
|
|
|
|
|
|
|||||
Unvested as of June 30, 2014
|
3,375
|
|
|
$
|
68.70
|
|
|
6.90
|
|
$
|
—
|
|
|
2014
|
|
2013
|
||
Expected life in years
|
6.9
|
|
|
5.0
|
|
Volatility
|
39.9
|
%
|
|
44.6
|
%
|
Interest rate
|
2.1
|
%
|
|
1.3
|
%
|
Yield rate
|
0.4
|
%
|
|
0.5
|
%
|
Three Months Ended June 30, 2014
|
Title
Insurance
|
|
All
Other
|
|
Intersegment
Eliminations
|
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
31,068,218
|
|
|
$
|
1,447,431
|
|
|
$
|
(425,613
|
)
|
|
$
|
32,090,036
|
|
Investment income
|
937,692
|
|
|
125,077
|
|
|
(23,334
|
)
|
|
1,039,435
|
|
||||
Net realized gain (loss) on investments
|
92,920
|
|
|
(838
|
)
|
|
—
|
|
|
92,082
|
|
||||
Total revenues
|
$
|
32,098,830
|
|
|
$
|
1,571,670
|
|
|
$
|
(448,947
|
)
|
|
$
|
33,221,553
|
|
Operating expenses
|
27,590,537
|
|
|
1,360,164
|
|
|
(408,192
|
)
|
|
28,542,509
|
|
||||
Income before income taxes
|
$
|
4,508,293
|
|
|
$
|
211,506
|
|
|
$
|
(40,755
|
)
|
|
$
|
4,679,044
|
|
Total assets
|
$
|
148,524,746
|
|
|
$
|
42,727,628
|
|
|
$
|
—
|
|
|
$
|
191,252,374
|
|
Three Months Ended June 30, 2013
|
Title
Insurance |
|
All
Other |
|
Intersegment
Eliminations |
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
31,691,606
|
|
|
$
|
1,382,206
|
|
|
$
|
(360,731
|
)
|
|
$
|
32,713,081
|
|
Investment income
|
858,168
|
|
|
90,213
|
|
|
(23,334
|
)
|
|
925,047
|
|
||||
Net realized gain (loss) on investments
|
59,473
|
|
|
(4,201
|
)
|
|
—
|
|
|
55,272
|
|
||||
Total revenues
|
$
|
32,609,247
|
|
|
$
|
1,468,218
|
|
|
$
|
(384,065
|
)
|
|
$
|
33,693,400
|
|
Operating expenses
|
26,580,339
|
|
|
1,586,320
|
|
|
(343,309
|
)
|
|
27,823,350
|
|
||||
Income (loss) before income taxes
|
$
|
6,028,908
|
|
|
$
|
(118,102
|
)
|
|
$
|
(40,756
|
)
|
|
$
|
5,870,050
|
|
Total assets
|
$
|
144,732,176
|
|
|
$
|
35,793,158
|
|
|
$
|
—
|
|
|
$
|
180,525,334
|
|
Six Months Ended June 30, 2014
|
Title
Insurance
|
|
All
Other
|
|
Intersegment
Eliminations
|
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
56,875,668
|
|
|
$
|
2,900,732
|
|
|
$
|
(750,843
|
)
|
|
$
|
59,025,557
|
|
Investment income
|
1,866,204
|
|
|
246,315
|
|
|
(46,668
|
)
|
|
2,065,851
|
|
||||
Net realized gain on investments
|
530,528
|
|
|
53,691
|
|
|
—
|
|
|
584,219
|
|
||||
Total revenues
|
$
|
59,272,400
|
|
|
$
|
3,200,738
|
|
|
$
|
(797,511
|
)
|
|
$
|
61,675,627
|
|
Operating expenses
|
53,315,465
|
|
|
3,040,604
|
|
|
(716,001
|
)
|
|
55,640,068
|
|
||||
Income before income taxes
|
$
|
5,956,935
|
|
|
$
|
160,134
|
|
|
$
|
(81,510
|
)
|
|
$
|
6,035,559
|
|
Total assets
|
$
|
148,524,746
|
|
|
$
|
42,727,628
|
|
|
$
|
—
|
|
|
$
|
191,252,374
|
|
Six Months Ended June 30, 2013
|
Title
Insurance
|
|
All
Other
|
|
Intersegment
Eliminations
|
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
56,720,164
|
|
|
$
|
2,608,457
|
|
|
$
|
(704,096
|
)
|
|
$
|
58,624,525
|
|
Investment income
|
1,706,823
|
|
|
185,377
|
|
|
(46,668
|
)
|
|
1,845,532
|
|
||||
Net realized gain (loss) on investments
|
91,074
|
|
|
(19,458
|
)
|
|
—
|
|
|
71,616
|
|
||||
Total revenues
|
$
|
58,518,061
|
|
|
$
|
2,774,376
|
|
|
$
|
(750,764
|
)
|
|
$
|
60,541,673
|
|
Operating expenses
|
47,445,711
|
|
|
3,143,747
|
|
|
(669,253
|
)
|
|
49,920,205
|
|
||||
Income (loss) before income taxes
|
$
|
11,072,350
|
|
|
$
|
(369,371
|
)
|
|
$
|
(81,511
|
)
|
|
$
|
10,621,468
|
|
Total assets
|
$
|
144,732,176
|
|
|
$
|
35,793,158
|
|
|
$
|
—
|
|
|
$
|
180,525,334
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Service cost – benefits earned during the year
|
$
|
3,667
|
|
|
$
|
3,945
|
|
|
$
|
7,334
|
|
|
$
|
7,891
|
|
Interest cost on the projected benefit obligation
|
7,618
|
|
|
7,103
|
|
|
15,236
|
|
|
14,206
|
|
||||
Amortization (accretion) of unrecognized prior service cost
|
555
|
|
|
(379
|
)
|
|
1,109
|
|
|
(759
|
)
|
||||
Amortization of unrecognized losses
|
—
|
|
|
1,574
|
|
|
—
|
|
|
3,147
|
|
||||
Net periodic benefits costs
|
$
|
11,840
|
|
|
$
|
12,243
|
|
|
$
|
23,679
|
|
|
$
|
24,485
|
|
|
2014
|
|
2013
|
Cumulative probability of earning maximum rate until maturity
|
—%
|
|
—%
|
Cumulative probability of principal returned prior to maturity
|
95.4%
|
|
95.6%
|
Cumulative probability of default at some future point
|
4.6%
|
|
4.4%
|
As of June 30, 2014
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Short-term Investments
|
$
|
9,695,708
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,695,708
|
|
Equity Securities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock and nonredeemable preferred stock
|
38,193,808
|
|
|
—
|
|
|
—
|
|
|
38,193,808
|
|
||||
Fixed Maturities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligations of states and political subdivisions*
|
—
|
|
|
69,891,681
|
|
|
—
|
|
|
69,891,681
|
|
||||
Corporate debt securities*
|
—
|
|
|
20,154,640
|
|
|
932,301
|
|
|
21,086,941
|
|
||||
Total
|
$
|
47,889,516
|
|
|
$
|
90,046,321
|
|
|
$
|
932,301
|
|
|
$
|
138,868,138
|
|
As of December 31, 2013
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Short-term Investments
|
$
|
7,926,373
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,926,373
|
|
Equity Securities
|
|
|
|
|
|
|
|
||||||||
Common stock and nonredeemable preferred stock
|
36,144,065
|
|
|
—
|
|
|
—
|
|
|
36,144,065
|
|
||||
Fixed Maturities
|
|
|
|
|
|
|
|
||||||||
Obligations of states and political subdivisions*
|
—
|
|
|
72,091,721
|
|
|
—
|
|
|
72,091,721
|
|
||||
Corporate debt securities*
|
—
|
|
|
18,417,992
|
|
|
935,700
|
|
|
19,353,692
|
|
||||
Total
|
$
|
44,070,438
|
|
|
$
|
90,509,713
|
|
|
$
|
935,700
|
|
|
$
|
135,515,851
|
|
As of June 30, 2014
|
Carrying Value
|
|
Estimated Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
$
|
19,501,886
|
|
|
$
|
19,501,886
|
|
|
$
|
19,501,886
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost-basis investments
|
2,498,327
|
|
|
2,600,961
|
|
|
—
|
|
|
—
|
|
|
2,600,961
|
|
|||||
Accrued dividends and interest
|
981,541
|
|
|
981,541
|
|
|
981,541
|
|
|
—
|
|
|
—
|
|
|||||
Total Financial Assets
|
$
|
22,981,754
|
|
|
$
|
23,084,388
|
|
|
$
|
20,483,427
|
|
|
$
|
—
|
|
|
$
|
2,600,961
|
|
As of December 31, 2013
|
Carrying Value
|
|
Estimated Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
$
|
23,626,761
|
|
|
$
|
23,626,761
|
|
|
$
|
23,626,761
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost-basis investments
|
1,927,429
|
|
|
2,069,302
|
|
|
—
|
|
|
—
|
|
|
2,069,302
|
|
|||||
Accrued dividends and interest
|
1,006,698
|
|
|
1,006,698
|
|
|
1,006,698
|
|
|
—
|
|
|
—
|
|
|||||
Total Financial Assets
|
$
|
26,560,888
|
|
|
$
|
26,702,761
|
|
|
$
|
24,633,459
|
|
|
$
|
—
|
|
|
$
|
2,069,302
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Contingent consideration
|
$
|
341,250
|
|
|
$
|
341,250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
341,250
|
|
Total Financial Liabilities
|
$
|
341,250
|
|
|
$
|
341,250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
341,250
|
|
Changes in fair value during the period ended:
|
2014
|
|
2013
|
||||
Beginning balance at January 1
|
$
|
935,700
|
|
|
$
|
932,200
|
|
Redemptions and sales
|
—
|
|
|
—
|
|
||
Realized gain – included in net realized gain on investments
|
—
|
|
|
—
|
|
||
Unrealized (loss) gain - included in other comprehensive income
|
(3,399
|
)
|
|
3,500
|
|
||
Ending balance, net
|
$
|
932,301
|
|
|
$
|
935,700
|
|
Changes in fair value during the period ended:
|
2014
|
|
2013
|
||||
Beginning balance at January 1
|
$
|
341,250
|
|
|
$
|
691,250
|
|
Addition of contingent consideration
|
—
|
|
|
—
|
|
||
Payment for contingent consideration
|
(341,250
|
)
|
|
(350,000
|
)
|
||
Ending balance, net
|
$
|
—
|
|
|
$
|
341,250
|
|
As of June 30, 2014
|
Valuation
Method
|
|
Impaired
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total at
Estimated
Fair
Value
|
|
Impairment
Losses
|
||||||||||
Cost method investments
|
Fair Value
|
|
Yes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,682
|
|
|
$
|
22,682
|
|
|
$
|
(10,062
|
)
|
Total cost method investments
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,682
|
|
|
$
|
22,682
|
|
|
$
|
(10,062
|
)
|
As of December 31, 2013
|
Valuation
Method
|
|
Impaired
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total at
Estimated
Fair
Value
|
|
Impairment
Losses
|
||||||||||
Cost method investments
|
Fair Value
|
|
Yes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,744
|
|
|
$
|
32,744
|
|
|
$
|
(34,070
|
)
|
Total cost method investments
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,744
|
|
|
$
|
32,744
|
|
|
$
|
(34,070
|
)
|
As of June 30, 2014
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Fixed maturities, available-for-sale, at fair value –
|
|
|
|
|
|
|
|
||||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
34,103,890
|
|
|
$
|
1,896,485
|
|
|
$
|
25,554
|
|
|
$
|
35,974,821
|
|
Special revenue obligations of U.S. states, territories and political subdivisions
|
31,937,659
|
|
|
2,058,818
|
|
|
79,617
|
|
|
33,916,860
|
|
||||
Corporate debt securities
|
19,200,308
|
|
|
958,602
|
|
|
4,270
|
|
|
20,154,640
|
|
||||
Auction rate securities
|
920,891
|
|
|
11,410
|
|
|
—
|
|
|
932,301
|
|
||||
Total
|
$
|
86,162,748
|
|
|
$
|
4,925,315
|
|
|
$
|
109,441
|
|
|
$
|
90,978,622
|
|
Equity securities, available-for-sale, at fair value –
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stocks and nonredeemable preferred stocks
|
$
|
23,450,256
|
|
|
$
|
14,774,291
|
|
|
$
|
30,739
|
|
|
$
|
38,193,808
|
|
Total
|
$
|
23,450,256
|
|
|
$
|
14,774,291
|
|
|
$
|
30,739
|
|
|
$
|
38,193,808
|
|
Short-term investments –
|
|
|
|
|
|
|
|
|
|
|
|
||||
Certificates of deposit and other
|
$
|
9,695,708
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,695,708
|
|
Total
|
$
|
9,695,708
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,695,708
|
|
As of December 31, 2013
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Fixed maturities, available-for-sale, at fair value –
|
|
|
|
|
|
|
|
||||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
38,449,309
|
|
|
$
|
1,922,862
|
|
|
$
|
184,351
|
|
|
$
|
40,187,820
|
|
Special revenue obligations of U.S. states, territories and political subdivisions
|
30,874,571
|
|
|
1,234,130
|
|
|
204,800
|
|
|
31,903,901
|
|
||||
Corporate debt securities
|
17,736,608
|
|
|
789,840
|
|
|
108,456
|
|
|
18,417,992
|
|
||||
Auction rate securities
|
919,672
|
|
|
16,028
|
|
|
—
|
|
|
935,700
|
|
||||
Total
|
$
|
87,980,160
|
|
|
$
|
3,962,860
|
|
|
$
|
497,607
|
|
|
$
|
91,445,413
|
|
Equity securities, available-for-sale, at fair value –
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stocks and nonredeemable preferred stocks
|
$
|
22,200,369
|
|
|
$
|
14,052,780
|
|
|
$
|
109,084
|
|
|
$
|
36,144,065
|
|
Total
|
$
|
22,200,369
|
|
|
$
|
14,052,780
|
|
|
$
|
109,084
|
|
|
$
|
36,144,065
|
|
Short-term investments –
|
|
|
|
|
|
|
|
|
|
|
|
||||
Certificates of deposit and other
|
$
|
7,926,373
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,926,373
|
|
Total
|
$
|
7,926,373
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,926,373
|
|
|
Available-for-Sale
|
||||||
|
Amortized
Cost
|
|
Fair
Value
|
||||
Due in one year or less
|
$
|
12,813,088
|
|
|
$
|
12,991,798
|
|
Due after one year through five years
|
48,745,990
|
|
|
51,541,170
|
|
||
Due five years through ten years
|
22,608,151
|
|
|
23,908,830
|
|
||
Due after ten years
|
1,995,519
|
|
|
2,536,824
|
|
||
Total
|
$
|
86,162,748
|
|
|
$
|
90,978,622
|
|
|
2014
|
|
2013
|
||||
Gross realized gains:
|
|
|
|
|
|
||
Corporate debt securities
|
$
|
—
|
|
|
$
|
20,476
|
|
Common stocks and nonredeemable preferred stocks
|
891,955
|
|
|
119,163
|
|
||
Total
|
$
|
891,955
|
|
|
$
|
139,639
|
|
Gross realized losses:
|
|
|
|
|
|
||
Common stocks and nonredeemable preferred stocks
|
$
|
(58,319
|
)
|
|
$
|
(38,785
|
)
|
Total
|
$
|
(58,319
|
)
|
|
$
|
(38,785
|
)
|
Net realized gain from securities
|
$
|
833,636
|
|
|
$
|
100,854
|
|
Net realized gains (losses) on other investments:
|
|
|
|
||||
Impairments of other investments
|
$
|
(10,062
|
)
|
|
$
|
(34,070
|
)
|
Gains on other investments
|
26,234
|
|
|
4,832
|
|
||
Losses on other investments
|
(265,589
|
)
|
|
—
|
|
||
Total
|
$
|
(249,417
|
)
|
|
$
|
(29,238
|
)
|
Net realized gain on investments
|
$
|
584,219
|
|
|
$
|
71,616
|
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
As of June 30, 2014
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
922,668
|
|
|
$
|
(1,036
|
)
|
|
$
|
1,101,430
|
|
|
$
|
(24,518
|
)
|
|
$
|
2,024,098
|
|
|
$
|
(25,554
|
)
|
Special revenue obligations of U.S. states territories and political subdivisions
|
2,125,264
|
|
|
(16,607
|
)
|
|
1,170,323
|
|
|
(63,010
|
)
|
|
3,295,587
|
|
|
(79,617
|
)
|
||||||
Corporate debt securities
|
1,495,525
|
|
|
(4,270
|
)
|
|
—
|
|
|
—
|
|
|
1,495,525
|
|
|
(4,270
|
)
|
||||||
Total fixed income securities
|
$
|
4,543,457
|
|
|
$
|
(21,913
|
)
|
|
$
|
2,271,753
|
|
|
$
|
(87,528
|
)
|
|
$
|
6,815,210
|
|
|
$
|
(109,441
|
)
|
Equity securities
|
$
|
574,818
|
|
|
$
|
(13,737
|
)
|
|
$
|
151,840
|
|
|
$
|
(17,002
|
)
|
|
$
|
726,658
|
|
|
$
|
(30,739
|
)
|
Total temporarily impaired securities
|
$
|
5,118,275
|
|
|
$
|
(35,650
|
)
|
|
$
|
2,423,593
|
|
|
$
|
(104,530
|
)
|
|
$
|
7,541,868
|
|
|
$
|
(140,180
|
)
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
As of December 31, 2013
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
4,198,012
|
|
|
$
|
(184,351
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,198,012
|
|
|
$
|
(184,351
|
)
|
Special revenue obligations of U.S. states territories and political subdivisions
|
11,010,093
|
|
|
(204,800
|
)
|
|
—
|
|
|
—
|
|
|
11,010,093
|
|
|
(204,800
|
)
|
||||||
Corporate debt securities
|
5,942,570
|
|
|
(108,456
|
)
|
|
—
|
|
|
—
|
|
|
5,942,570
|
|
|
(108,456
|
)
|
||||||
Total fixed income securities
|
$
|
21,150,675
|
|
|
$
|
(497,607
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,150,675
|
|
|
$
|
(497,607
|
)
|
Equity securities
|
$
|
2,035,971
|
|
|
$
|
(72,998
|
)
|
|
$
|
244,929
|
|
|
$
|
(36,086
|
)
|
|
$
|
2,280,900
|
|
|
$
|
(109,084
|
)
|
Total temporarily impaired securities
|
$
|
23,186,646
|
|
|
$
|
(570,605
|
)
|
|
$
|
244,929
|
|
|
$
|
(36,086
|
)
|
|
$
|
23,431,575
|
|
|
$
|
(606,691
|
)
|
Financial Statement Classification,
|
As of June 30, 2014
|
|
As of December 31, 2013
|
||||
Consolidated Balance Sheets
|
|
||||||
Other investments
|
$
|
5,451,000
|
|
|
$
|
5,320,000
|
|
Premiums and fees receivable
|
$
|
671,000
|
|
|
$
|
657,000
|
|
Financial Statement Classification, |
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
Consolidated Statements of Income
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net premiums written
|
$
|
3,270,000
|
|
|
$
|
3,941,000
|
|
|
$
|
5,561,000
|
|
|
$
|
7,358,000
|
|
Other income
|
$
|
627,000
|
|
|
$
|
544,000
|
|
|
$
|
976,000
|
|
|
$
|
1,069,000
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
Net income attributable to the Company
|
$
|
4,360,036
|
|
|
$
|
14,708,210
|
|
Transfers from the redeemable controlling interest:
|
|
|
|
||||
Decrease in paid-in capital for purchase of redeemable noncontrolling interest
|
(114,320
|
)
|
|
—
|
|
||
Net transfers from noncontrolling interest
|
(114,320
|
)
|
|
—
|
|
||
Change from net income attributable to the Company and transfers from redeemable noncontrolling interest
|
$
|
4,245,716
|
|
|
$
|
14,708,210
|
|
Changes in carrying value during the period ended:
|
June 30, 2014
|
|
December 31, 2013
|
||||
Beginning balance at January 1
|
$
|
545,489
|
|
|
$
|
493,861
|
|
Net income attributable to redeemable noncontrolling interest
|
23,523
|
|
|
88,528
|
|
||
Distributions to noncontrolling interest
|
(168,057
|
)
|
|
(36,900
|
)
|
||
Purchase of redeemable noncontrolling interest
|
(515,275
|
)
|
|
—
|
|
||
Additional paid-in capital for purchase of noncontrolling interest
|
114,320
|
|
|
—
|
|
||
Balance, net
|
$
|
—
|
|
|
$
|
545,489
|
|
Three Months Ended June 30, 2014
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at April 1
|
$
|
11,398,858
|
|
|
$
|
(47,987
|
)
|
|
$
|
11,350,871
|
|
Other comprehensive income before reclassifications
|
1,447,244
|
|
|
—
|
|
|
1,447,244
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(45,151
|
)
|
|
366
|
|
|
(44,785
|
)
|
|||
Net current-period other comprehensive income
|
1,402,093
|
|
|
366
|
|
|
1,402,459
|
|
|||
Ending balance
|
$
|
12,800,951
|
|
|
$
|
(47,621
|
)
|
|
$
|
12,753,330
|
|
Three Months Ended June 30, 2013
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at April 1
|
$
|
10,479,645
|
|
|
$
|
(101,665
|
)
|
|
$
|
10,377,980
|
|
Other comprehensive loss before reclassifications
|
(1,081,096
|
)
|
|
—
|
|
|
(1,081,096
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
(36,670
|
)
|
|
787
|
|
|
(35,883
|
)
|
|||
Net current-period other comprehensive (loss) income
|
(1,117,766
|
)
|
|
787
|
|
|
(1,116,979
|
)
|
|||
Ending balance
|
$
|
9,361,879
|
|
|
$
|
(100,878
|
)
|
|
$
|
9,261,001
|
|
Six Months Ended June 30, 2014
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at January 1
|
$
|
11,395,757
|
|
|
$
|
(48,353
|
)
|
|
$
|
11,347,404
|
|
Other comprehensive income before reclassifications
|
1,953,080
|
|
|
—
|
|
|
1,953,080
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(547,886
|
)
|
|
732
|
|
|
(547,154
|
)
|
|||
Net current-period other comprehensive income
|
1,405,194
|
|
|
732
|
|
|
1,405,926
|
|
|||
Ending balance
|
$
|
12,800,951
|
|
|
$
|
(47,621
|
)
|
|
$
|
12,753,330
|
|
Six Months Ended June 30, 2013
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at January 1
|
$
|
8,920,883
|
|
|
$
|
(102,453
|
)
|
|
$
|
8,818,430
|
|
Other comprehensive income before reclassifications
|
489,148
|
|
|
—
|
|
|
489,148
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(48,152
|
)
|
|
1,575
|
|
|
(46,577
|
)
|
|||
Net current-period other comprehensive income
|
440,996
|
|
|
1,575
|
|
|
442,571
|
|
|||
Ending balance
|
$
|
9,361,879
|
|
|
$
|
(100,878
|
)
|
|
$
|
9,261,001
|
|
Three Months Ended June 30, 2014
|
|
|
|
||
Details about Accumulated Other
Comprehensive Income Components
|
Amount Reclassified from
Accumulated Other
Comprehensive Income
|
|
Affected Line Item in the Consolidated
Statements of Income
|
||
Unrealized gains and losses on available-for-sale securities:
|
|
|
|
||
Net realized gain on investment
|
$
|
68,364
|
|
|
|
Other-than-temporary impairments
|
—
|
|
|
|
|
Total
|
$
|
68,364
|
|
|
Net realized gain on investment
|
Tax
|
(23,213
|
)
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
45,151
|
|
|
|
Amortization related to postretirement benefit plans:
|
|
|
|
|
|
Prior year service cost
|
$
|
(555
|
)
|
|
|
Unrecognized gain (loss)
|
—
|
|
|
|
|
Total
|
$
|
(555
|
)
|
|
(a)
|
Tax
|
189
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(366
|
)
|
|
|
Reclassifications for the period
|
$
|
44,785
|
|
|
|
Three Months Ended June 30, 2013
|
|
|
|
||
Details about Accumulated Other
Comprehensive Loss Components |
Amount Reclassified from
Accumulated Other Comprehensive Income |
|
Affected Line Item in the Consolidated
Statements of Income |
||
Unrealized gains and losses on available-for-sale securities:
|
|
|
|
||
Net realized gain on investment
|
$
|
70,857
|
|
|
|
Other-than-temporary impairments
|
(15,585
|
)
|
|
|
|
Total
|
$
|
55,272
|
|
|
Net realized gain on investment
|
Tax
|
(18,602
|
)
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
36,670
|
|
|
|
Accretion (amortization) related to postretirement benefit plans:
|
|
|
|
|
|
Prior year service cost
|
$
|
379
|
|
|
|
Unrecognized loss
|
(1,574
|
)
|
|
|
|
Total
|
$
|
(1,195
|
)
|
|
(a)
|
Tax
|
408
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(787
|
)
|
|
|
Reclassifications for the period
|
$
|
35,883
|
|
|
|
Six Months Ended June 30, 2014
|
|
|
|
||
Details about Accumulated Other
Comprehensive Income Components
|
Amount Reclassified from
Accumulated Other
Comprehensive Income
|
|
Affected Line Item in the Consolidated
Statements of Income
|
||
Unrealized gains and losses on available-for-sale securities:
|
|
|
|
||
Net realized gain on investment
|
$
|
833,636
|
|
|
|
Other-than-temporary impairments
|
—
|
|
|
|
|
Total
|
$
|
833,636
|
|
|
Net realized gain on investment
|
Tax
|
(285,750
|
)
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
547,886
|
|
|
|
Amortization related to postretirement benefit plans:
|
|
|
|
|
|
Prior year service cost
|
$
|
(1,109
|
)
|
|
|
Unrecognized gain (loss)
|
—
|
|
|
|
|
Total
|
$
|
(1,109
|
)
|
|
(a)
|
Tax
|
377
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(732
|
)
|
|
|
Reclassifications for the period
|
$
|
547,154
|
|
|
|
Six Months Ended June 30, 2013
|
|
|
|
||
Details about Accumulated Other
Comprehensive Income Components |
Amount Reclassified from
Accumulated Other Comprehensive Income |
|
Affected Line Item in the Consolidated
Statements of Income |
||
Unrealized gains and losses on available-for-sale securities:
|
|
|
|
||
Net realized gain on investment
|
$
|
105,686
|
|
|
|
Other-than-temporary impairments
|
(34,070
|
)
|
|
|
|
Total
|
$
|
71,616
|
|
|
Net realized gain on investment
|
Tax
|
(23,464
|
)
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
48,152
|
|
|
|
Accretion (amortization) related to postretirement benefit plans:
|
|
|
|
|
|
Prior year service cost
|
$
|
759
|
|
|
|
Unrecognized loss
|
(3,147
|
)
|
|
|
|
Total
|
$
|
(2,388
|
)
|
|
(a)
|
Tax
|
813
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(1,575
|
)
|
|
|
Reclassifications for the period
|
$
|
46,577
|
|
|
|
(a)
|
These accumulated other comprehensive income components are not reclassified to net income in their entirety in the same reporting period. The amounts are presented within salaries, employee benefits and payroll taxes on the Consolidated Statements of Income as amortized. Amortization and accretion related to postretirement benefit plans is included in the computation of net periodic pension costs, as discussed in Note 5.
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums written
|
|
$
|
29,849,853
|
|
|
$
|
30,429,761
|
|
|
$
|
54,759,105
|
|
|
$
|
54,355,758
|
|
Investment income - interest and dividends
|
|
1,039,435
|
|
|
925,047
|
|
|
2,065,851
|
|
|
1,845,532
|
|
||||
Net realized gain on investments
|
|
92,082
|
|
|
55,272
|
|
|
584,219
|
|
|
71,616
|
|
||||
Other
|
|
2,240,183
|
|
|
2,283,320
|
|
|
4,266,452
|
|
|
4,268,767
|
|
||||
Total Revenues
|
|
33,221,553
|
|
|
33,693,400
|
|
|
61,675,627
|
|
|
60,541,673
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Commissions to agents
|
|
18,346,381
|
|
|
17,608,789
|
|
|
33,802,659
|
|
|
31,098,220
|
|
||||
Provision for claims
|
|
294,281
|
|
|
996,870
|
|
|
2,669,664
|
|
|
607,812
|
|
||||
Salaries, employee benefits and payroll taxes
|
|
6,454,930
|
|
|
6,249,723
|
|
|
12,640,691
|
|
|
12,400,473
|
|
||||
Office occupancy and operations
|
|
1,246,644
|
|
|
1,026,108
|
|
|
2,426,971
|
|
|
2,100,341
|
|
||||
Business development
|
|
511,763
|
|
|
452,353
|
|
|
1,029,657
|
|
|
881,086
|
|
||||
Filing fees, franchise and local taxes
|
|
225,343
|
|
|
188,950
|
|
|
414,943
|
|
|
369,520
|
|
||||
Premium and retaliatory taxes
|
|
546,091
|
|
|
530,524
|
|
|
840,565
|
|
|
971,047
|
|
||||
Professional and contract labor fees
|
|
666,909
|
|
|
535,207
|
|
|
1,354,967
|
|
|
1,110,544
|
|
||||
Other
|
|
250,167
|
|
|
234,826
|
|
|
459,951
|
|
|
381,162
|
|
||||
Total Operating Expenses
|
|
28,542,509
|
|
|
27,823,350
|
|
|
55,640,068
|
|
|
49,920,205
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before Income Taxes
|
|
4,679,044
|
|
|
5,870,050
|
|
|
6,035,559
|
|
|
10,621,468
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Provision for Income Taxes
|
|
1,281,000
|
|
|
1,846,000
|
|
|
1,652,000
|
|
|
3,211,000
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net Income Attributable to the Company
|
|
$
|
3,373,598
|
|
|
$
|
4,005,675
|
|
|
$
|
4,360,036
|
|
|
$
|
7,382,405
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2014
|
|
%
|
|
2013
|
|
%
|
|
2014
|
|
%
|
|
2013
|
|
%
|
||||||||||||
Home and Branch
|
$
|
6,275,362
|
|
|
21.0
|
%
|
|
$
|
7,332,764
|
|
|
24.1
|
%
|
|
$
|
11,107,041
|
|
|
20.3
|
%
|
|
$
|
13,116,393
|
|
|
24.1
|
%
|
Agency
|
23,574,491
|
|
|
79.0
|
%
|
|
23,096,997
|
|
|
75.9
|
%
|
|
43,652,064
|
|
|
79.7
|
%
|
|
41,239,365
|
|
|
75.9
|
%
|
||||
Total
|
$
|
29,849,853
|
|
|
100.0
|
%
|
|
$
|
30,429,761
|
|
|
100.0
|
%
|
|
$
|
54,759,105
|
|
|
100.0
|
%
|
|
$
|
54,355,758
|
|
|
100.0
|
%
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
State
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Texas
|
|
$
|
11,351,769
|
|
|
$
|
6,378,120
|
|
|
$
|
22,973,490
|
|
|
$
|
11,299,109
|
|
North Carolina
|
|
8,359,773
|
|
|
9,590,855
|
|
|
14,657,806
|
|
|
17,125,721
|
|
||||
South Carolina
|
|
1,651,129
|
|
|
2,354,504
|
|
|
3,154,204
|
|
|
4,675,554
|
|
||||
Virginia
|
|
1,385,055
|
|
|
1,465,820
|
|
|
2,208,660
|
|
|
2,732,715
|
|
||||
Michigan
|
|
1,129,068
|
|
|
1,727,908
|
|
|
1,946,312
|
|
|
3,047,453
|
|
||||
Georgia
|
|
730,882
|
|
|
573,038
|
|
|
1,925,038
|
|
|
1,247,658
|
|
||||
All Others
|
|
5,254,755
|
|
|
8,401,033
|
|
|
7,926,194
|
|
|
14,320,755
|
|
||||
Premiums
|
|
29,862,431
|
|
|
30,491,278
|
|
|
54,791,704
|
|
|
54,448,965
|
|
||||
Reinsurance Assumed
|
|
—
|
|
|
2,970
|
|
|
28,472
|
|
|
3,470
|
|
||||
Reinsurance Ceded
|
|
(12,578
|
)
|
|
(64,487
|
)
|
|
(61,071
|
)
|
|
(96,677
|
)
|
||||
Net Premiums Written
|
|
$
|
29,849,853
|
|
|
$
|
30,429,761
|
|
|
$
|
54,759,105
|
|
|
$
|
54,355,758
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2014
|
|
%
|
|
2013
|
|
%
|
|
2014
|
|
%
|
|
2013
|
|
%
|
||||||||||||
Title Insurance
|
$
|
27,202,614
|
|
|
95.3
|
%
|
|
$
|
26,244,237
|
|
|
94.3
|
%
|
|
$
|
52,639,736
|
|
|
94.6
|
%
|
|
$
|
46,802,408
|
|
|
93.8
|
%
|
All Other
|
1,339,895
|
|
|
4.7
|
%
|
|
1,579,113
|
|
|
5.7
|
%
|
|
3,000,332
|
|
|
5.4
|
%
|
|
3,117,797
|
|
|
6.2
|
%
|
||||
Total
|
$
|
28,542,509
|
|
|
100.0
|
%
|
|
$
|
27,823,350
|
|
|
100.0
|
%
|
|
$
|
55,640,068
|
|
|
100.0
|
%
|
|
$
|
49,920,205
|
|
|
100.0
|
%
|
•
|
the level of real estate transactions, the level of mortgage origination volumes (including refinancing) and changes to the insurance requirements of the participants in the secondary mortgage market, and the effect of these factors on the demand for title insurance;
|
•
|
changes in general economic, business, and political conditions, including the performance of the financial and real estate markets;
|
•
|
the possible inadequacy of provisions for claims to cover actual claim losses;
|
•
|
the incidence of fraud-related losses;
|
•
|
unanticipated adverse changes in securities markets, including interest rates;
|
•
|
significant competition that the Company’s operating subsidiaries face, including the Company’s ability to develop and offer products and services that meet changing industry standards in a timely and cost-effective manner and expansion into new geographic locations;
|
•
|
the Company relies upon the North Carolina and Texas markets for a significant portion of its premiums;
|
•
|
compliance with government regulation, including pricing regulation, and significant changes to applicable regulations or in their application by regulators;
|
•
|
the impact of governmental oversight of service providers' compliance with federal consumer financial laws, including title insurance agents;
|
•
|
downgrades from a rating agency;
|
•
|
the inability of the Company to manage, develop and implement technological advancements and prevent system interruptions or unauthorized systems intrusions;
|
•
|
statutory requirements applicable to the Company’s insurance subsidiaries that 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;
|
•
|
heightened regulatory scrutiny and investigations of the title insurance industry;
|
•
|
the Company’s dependence on key management and marketing personnel;
|
•
|
the possible reform of government-sponsored entities;
|
•
|
the possible inadequacy of the Company' policies and procedures for the mitigation of risks;
|
•
|
the shareholder rights plan; and
|
•
|
other risks detailed elsewhere in this document and in the Company’s other filings with the SEC.
|
|
Issuer Purchases of Equity Securities
|
|
|
|||||||||
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
|
|
|
|
|
|
|
423,782
|
|
||||
April 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
423,782
|
|
May 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
423,782
|
|
June 2014
|
8,323
|
|
|
$
|
65.40
|
|
|
8,323
|
|
|
415,459
|
|
Total:
|
8,323
|
|
|
$
|
65.40
|
|
|
8,323
|
|
|
415,459
|
|
31(i)
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
31(ii)
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
101.INS*
|
XBRL Instance Document
|
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
INVESTORS TITLE COMPANY
|
|
|
|
|
|
By:
|
/s/ James A. Fine, Jr.
|
|
|
James A. Fine, Jr.
|
|
|
President, Principal Financial Officer and
|
|
|
Principal Accounting Officer
|
1 Year Investors Title Chart |
1 Month Investors Title Chart |
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