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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 | |
---|---|---|---|---|---|---|---|---|---|---|
1.29 | 0.69% | 187.34 | 187.05 | 190.00 | 188.00 | 187.20 | 187.20 | 1,280 | 15:00:02 |
[ 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
September 30, 2016 and December 31, 2015
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Consolidated Statements of Income For the Three
and Nine Months Ended September 30, 2016 and 2015
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Consolidated Statements of Comprehensive Income For the Three
and Nine Months Ended September 30, 2016 and 2015
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Consolidated Statements of Stockholders’ Equity For the
Nine Months Ended September 30, 2016 and 2015
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Consolidated Statements of Cash Flows For the
Nine Months Ended September 30, 2016 and 2015
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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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September 30,
2016 |
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December 31,
2015 |
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Assets:
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Investments in securities:
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Fixed maturities, available-for-sale, at fair value (amortized cost: 2016: $105,240,488; 2015: $102,015,826)
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$
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111,038,924
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$
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106,066,384
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Equity securities, available-for-sale, at fair value (cost: 2016: $24,958,456; 2015: $23,855,873)
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39,834,879
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37,513,464
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Short-term investments
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3,925,296
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6,865,406
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Other investments
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10,626,505
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10,106,828
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Total investments
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165,425,604
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160,552,082
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Cash and cash equivalents
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26,898,991
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21,790,068
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Premium and fees receivable
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9,358,570
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8,392,697
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Accrued interest and dividends
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1,389,526
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1,004,126
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Prepaid expenses and other assets
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10,931,270
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12,634,105
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Property, net
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7,843,079
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7,148,951
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Current income taxes recoverable
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1,261,289
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—
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Total Assets
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$
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223,108,329
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$
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211,522,029
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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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35,536,000
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$
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37,788,000
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Accounts payable and accrued liabilities
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24,705,653
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25,043,588
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Current income taxes payable
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—
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210,355
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Deferred income taxes, net
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10,749,877
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5,703,006
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Total liabilities
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70,991,530
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68,744,949
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Commitments and Contingencies
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—
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—
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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; 1,884,283 and 1,949,797 shares issued and outstanding 2016 and 2015, respectively, excluding 291,676 shares for 2016 and 2015 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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138,575,372
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131,186,866
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Accumulated other comprehensive income
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13,449,558
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11,483,015
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Total stockholders’ equity attributable to the Company
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152,024,931
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142,669,882
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Noncontrolling interests
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91,868
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107,198
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Total stockholders' equity
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152,116,799
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142,777,080
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Total Liabilities and Stockholders’ Equity
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$
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223,108,329
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$
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211,522,029
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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2016
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2015
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2016
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2015
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Revenues:
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Net premiums written
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$
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36,511,373
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$
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30,945,532
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$
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87,810,602
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$
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86,372,154
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Investment income – interest and dividends
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1,160,983
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1,117,529
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3,478,999
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3,427,055
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Net realized gain (loss) on investments
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439,326
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(338,631
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)
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574,328
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601,336
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Other
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2,890,023
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2,816,828
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7,827,509
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7,924,329
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Total Revenues
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41,001,705
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34,541,258
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99,691,438
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98,324,874
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Operating Expenses:
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Commissions to agents
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18,739,151
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16,898,323
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45,946,379
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48,393,553
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(Benefit) provision for claims
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(1,067,853
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)
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703,979
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(403,982
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)
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3,621,401
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Salaries, employee benefits and payroll taxes
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8,300,823
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6,957,874
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22,945,972
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21,101,955
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Office occupancy and operations
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1,496,948
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1,342,288
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4,526,710
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4,089,806
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Business development
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608,532
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568,189
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1,695,180
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1,633,358
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Filing fees, franchise and local taxes
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191,574
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134,880
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688,731
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572,621
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Premium and retaliatory taxes
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673,551
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573,336
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1,559,631
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1,684,674
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Professional and contract labor fees
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523,504
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661,879
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1,599,603
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1,926,469
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Other
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157,308
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264,012
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629,539
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708,918
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Total Operating Expenses
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29,623,538
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28,104,760
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79,187,763
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83,732,755
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Income before Income Taxes
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11,378,167
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6,436,498
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20,503,675
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14,592,119
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Provision for Income Taxes
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3,249,000
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1,941,000
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6,040,000
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4,250,000
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||||||||
Net Income
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8,129,167
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4,495,498
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14,463,675
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10,342,119
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Net (Gain) Loss Attributable to Noncontrolling Interests
|
(2,228
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)
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(4,536
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)
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6,684
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(4,536
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)
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Net Income Attributable to the Company
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$
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8,126,939
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$
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4,490,962
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$
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14,470,359
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$
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10,337,583
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Basic Earnings per Common Share
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$
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4.30
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$
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2.28
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$
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7.55
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$
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5.18
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||||||||
Weighted Average Shares Outstanding – Basic
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1,888,870
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1,967,923
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1,915,468
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1,995,120
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Diluted Earnings per Common Share
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$
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4.29
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$
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2.28
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$
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7.53
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$
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5.17
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||||||||
Weighted Average Shares Outstanding – Diluted
|
1,895,592
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1,972,233
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1,921,999
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2,000,043
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Cash Dividends Paid per Common Share
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$
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0.20
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$
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0.08
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$
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0.52
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$
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0.24
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
|
||||||||||||
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2016
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2015
|
2016
|
|
2015
|
||||||||
Net income
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$
|
8,129,167
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$
|
4,495,498
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$
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14,463,675
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|
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$
|
10,342,119
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Other comprehensive (loss) income, before tax:
|
|
|
|
|
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||||||
Amortization related to prior year service cost
|
—
|
|
|
1,098
|
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—
|
|
|
3,293
|
|
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Amortization of unrecognized loss
|
2,235
|
|
|
878
|
|
6,705
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|
|
2,635
|
|
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Unrealized (losses) gains on investments arising during the period
|
(769,328
|
)
|
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(2,359,495
|
)
|
3,518,286
|
|
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(4,223,992
|
)
|
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Reclassification adjustment for sales of securities included in net income
|
(545,925
|
)
|
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(458,058
|
)
|
(785,517
|
)
|
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(1,390,070
|
)
|
||||
Reclassification adjustment for write-downs of securities included in net income
|
118,703
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|
657,755
|
|
233,941
|
|
|
668,904
|
|
||||
Other comprehensive (loss) income, before tax
|
(1,194,315
|
)
|
|
(2,157,822
|
)
|
2,973,415
|
|
|
(4,939,230
|
)
|
||||
Income tax expense related to postretirement health benefits
|
759
|
|
|
672
|
|
2,279
|
|
|
2,016
|
|
||||
Income tax (benefit) expense related to unrealized (losses) gains on investments arising during the period
|
(280,327
|
)
|
|
(809,994
|
)
|
1,193,241
|
|
|
(1,446,083
|
)
|
||||
Income tax benefit related to reclassification adjustment for sales of securities included in net income
|
(185,316
|
)
|
|
(156,447
|
)
|
(268,548
|
)
|
|
(474,198
|
)
|
||||
Income tax expense related to reclassification adjustment for write-downs of securities included in net income
|
40,555
|
|
|
225,293
|
|
79,900
|
|
|
229,093
|
|
||||
Net income tax (benefit) expense on other comprehensive (loss) income
|
(424,329
|
)
|
|
(740,476
|
)
|
1,006,872
|
|
|
(1,689,172
|
)
|
||||
Other comprehensive (loss) income
|
(769,986
|
)
|
|
(1,417,346
|
)
|
1,966,543
|
|
|
(3,250,058
|
)
|
||||
Comprehensive Income
|
$
|
7,359,181
|
|
|
$
|
3,078,152
|
|
$
|
16,430,218
|
|
|
$
|
7,092,061
|
|
Comprehensive (income) loss attributable to noncontrolling interests
|
(2,228
|
)
|
|
(4,536
|
)
|
6,684
|
|
|
(4,536
|
)
|
||||
Comprehensive Income Attributable to the Company
|
$
|
7,356,953
|
|
|
$
|
3,073,616
|
|
$
|
16,436,902
|
|
|
$
|
7,087,525
|
|
|
Common Stock
|
|
Retained Earnings
|
|
|
Accumulated
Other
Comprehensive
Income
|
|
|
Noncontrolling
Interests
|
|
|
Total
Stockholders’
Equity
|
|
|||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, January 1, 2015
|
2,023,270
|
|
|
$
|
1
|
|
|
$
|
124,707,196
|
|
|
$
|
12,856,509
|
|
|
$
|
—
|
|
|
$
|
137,563,706
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
10,337,583
|
|
|
|
|
|
|
|
10,337,583
|
|
||||||
Dividends ($0.24 per share)
|
|
|
|
|
|
|
(477,392
|
)
|
|
|
|
|
|
|
(477,392
|
)
|
||||||
Shares of common stock repurchased and retired
|
(72,044
|
)
|
|
|
|
|
(5,166,846
|
)
|
|
|
|
|
|
|
(5,166,846
|
)
|
||||||
Stock options and stock appreciation rights exercised
|
2,192
|
|
|
|
|
|
54,988
|
|
|
|
|
|
|
|
54,988
|
|
||||||
Share-based compensation expense
|
|
|
|
|
|
|
102,707
|
|
|
|
|
|
|
|
102,707
|
|
||||||
Amortization related to postretirement health benefits
|
|
|
|
|
|
|
|
|
|
3,912
|
|
|
|
|
3,912
|
|
||||||
Net unrealized loss on investments
|
|
|
|
|
|
|
|
|
|
(3,253,970
|
)
|
|
|
|
(3,253,970
|
)
|
||||||
Net effect of changes in ownership
|
|
|
|
|
|
|
|
|
127,050
|
|
|
127,050
|
|
|||||||||
Net gain attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
4,536
|
|
|
4,536
|
|
|||||||||
Income tax benefit from share-based compensation
|
|
|
|
|
26,875
|
|
|
|
|
|
|
26,875
|
|
|||||||||
Balance, September 30, 2015
|
1,953,418
|
|
|
$
|
1
|
|
|
$
|
129,585,111
|
|
|
$
|
9,606,451
|
|
|
$
|
131,586
|
|
|
$
|
139,323,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, January 1, 2016
|
1,949,797
|
|
|
$
|
1
|
|
|
$
|
131,186,866
|
|
|
$
|
11,483,015
|
|
|
$
|
107,198
|
|
|
$
|
142,777,080
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
14,470,359
|
|
|
|
|
|
|
|
14,470,359
|
|
||||||
Dividends ($0.52 per share)
|
|
|
|
|
|
|
(993,534
|
)
|
|
|
|
|
|
|
(993,534
|
)
|
||||||
Shares of common stock repurchased and retired
|
(66,803
|
)
|
|
|
|
|
(6,219,670
|
)
|
|
|
|
|
|
|
(6,219,670
|
)
|
||||||
Stock options and stock appreciation rights exercised
|
1,289
|
|
|
|
|
|
(200
|
)
|
|
|
|
|
|
|
(200
|
)
|
||||||
Share-based compensation expense
|
|
|
|
|
|
|
99,755
|
|
|
|
|
|
|
|
99,755
|
|
||||||
Amortization related to postretirement health benefits
|
|
|
|
|
|
|
|
|
|
4,426
|
|
|
|
|
4,426
|
|
||||||
Net unrealized gain on investments
|
|
|
|
|
|
|
|
|
|
1,962,117
|
|
|
|
|
1,962,117
|
|
||||||
Purchase of noncontrolling interest of subsidiary
|
|
|
|
|
|
|
|
|
(8,646
|
)
|
|
(8,646
|
)
|
|||||||||
Additional paid-in capital from purchase of noncontrolling interest of subsidiary
|
|
|
|
|
(496
|
)
|
|
|
|
|
|
(496
|
)
|
|||||||||
Net loss attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(6,684
|
)
|
|
(6,684
|
)
|
|||||||||
Income tax benefit from share-based compensation
|
|
|
|
|
|
|
32,292
|
|
|
|
|
|
|
|
32,292
|
|
||||||
Balance, September 30, 2016
|
1,884,283
|
|
|
$
|
1
|
|
|
$
|
138,575,372
|
|
|
$
|
13,449,558
|
|
|
$
|
91,868
|
|
|
$
|
152,116,799
|
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
14,463,675
|
|
|
$
|
10,342,119
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation
|
994,619
|
|
|
654,838
|
|
||
Amortization, net
|
624,882
|
|
|
542,841
|
|
||
Amortization related to postretirement benefits obligation
|
6,705
|
|
|
5,928
|
|
||
Share-based compensation expense related to stock options
|
99,755
|
|
|
102,707
|
|
||
Net gain on disposals of property
|
(10,677
|
)
|
|
(30,374
|
)
|
||
Net realized gain on investments
|
(574,328
|
)
|
|
(601,336
|
)
|
||
Net earnings from other investments
|
(1,120,640
|
)
|
|
(1,774,927
|
)
|
||
(Benefit) provision for claims
|
(403,982
|
)
|
|
3,621,401
|
|
||
Provision for deferred income taxes
|
4,040,000
|
|
|
1,909,000
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
||
Increase in receivables
|
(965,873
|
)
|
|
(457,484
|
)
|
||
Decrease (increase) in other assets
|
1,265,172
|
|
|
(1,110,322
|
)
|
||
Increase in current income taxes recoverable
|
(1,261,289
|
)
|
|
—
|
|
||
(Decrease) increase in accounts payable and accrued liabilities
|
(337,935
|
)
|
|
1,150,634
|
|
||
(Decrease) increase in current income taxes payable
|
(210,355
|
)
|
|
156,487
|
|
||
Payments of claims, net of recoveries
|
(1,848,018
|
)
|
|
(2,401,401
|
)
|
||
Net cash provided by operating activities
|
14,761,711
|
|
|
12,110,111
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
||
Purchases of available-for-sale securities
|
(15,066,182
|
)
|
|
(5,794,149
|
)
|
||
Purchases of short-term investments
|
(1,890,826
|
)
|
|
(11,642,357
|
)
|
||
Purchases of other investments
|
(1,974,275
|
)
|
|
(3,164,415
|
)
|
||
Purchase of noncontrolling interest of subsidiary
|
(9,142
|
)
|
|
—
|
|
||
Proceeds from sales and maturities of available-for-sale securities
|
10,711,195
|
|
|
16,212,924
|
|
||
Proceeds from sales and maturities of short-term investments
|
4,830,935
|
|
|
335,084
|
|
||
Proceeds from sales and distributions of other investments
|
2,594,042
|
|
|
3,167,494
|
|
||
Purchase of subsidiary
|
—
|
|
|
(72,600
|
)
|
||
Proceeds from sales of other assets
|
10,647
|
|
|
113,238
|
|
||
Purchases of property
|
(1,742,225
|
)
|
|
(2,313,052
|
)
|
||
Proceeds from the sale of property
|
64,155
|
|
|
74,395
|
|
||
Net cash used in investing activities
|
(2,471,676
|
)
|
|
(3,083,438
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||
Repurchases of common stock
|
(6,219,670
|
)
|
|
(5,166,846
|
)
|
||
Exercises of stock options and SARs
|
(200
|
)
|
|
54,988
|
|
||
Excess tax benefits related to exercise of stock options and SARs
|
32,292
|
|
|
26,875
|
|
||
Dividends paid
|
(993,534
|
)
|
|
(477,392
|
)
|
||
Net cash used in financing activities
|
(7,181,112
|
)
|
|
(5,562,375
|
)
|
||
|
|
|
|
||||
Net Increase in Cash and Cash Equivalents
|
5,108,923
|
|
|
3,464,298
|
|
||
Cash and Cash Equivalents, Beginning of Period
|
21,790,068
|
|
|
15,826,515
|
|
||
Cash and Cash Equivalents, End of Period
|
$
|
26,898,991
|
|
|
$
|
19,290,813
|
|
Consolidated Statements of Cash Flows, continued
|
|
||||||
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Supplemental Disclosures:
|
|
|
|
||||
Cash Paid During the Year for:
|
|
|
|
||||
Income tax payments, net
|
$
|
3,736,100
|
|
|
$
|
2,727,700
|
|
Non Cash Investing and Financing Activities:
|
|
|
|
||||
Non cash net unrealized (gain) loss on investments, net of deferred tax (provision) benefit of $(1,004,593) and $1,691,188 for 2016 and 2015, respectively
|
$
|
(1,962,117
|
)
|
|
$
|
3,253,970
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Balance, beginning of period
|
$
|
37,788,000
|
|
|
$
|
36,677,000
|
|
(Benefit) provision, charged to operations
|
(403,982
|
)
|
|
4,478,494
|
|
||
Payments of claims, net of recoveries
|
(1,848,018
|
)
|
|
(3,367,494
|
)
|
||
Ending balance
|
$
|
35,536,000
|
|
|
$
|
37,788,000
|
|
|
September 30, 2016
|
|
%
|
|
December 31, 2015
|
|
%
|
||||
Known title claims
|
$
|
4,694,784
|
|
|
13.2
|
|
$
|
5,066,469
|
|
|
13.4
|
IBNR
|
30,841,216
|
|
|
86.8
|
|
32,721,531
|
|
|
86.6
|
||
Total loss reserves
|
$
|
35,536,000
|
|
|
100.0
|
|
$
|
37,788,000
|
|
|
100.0
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
2016
|
|
2015
|
||||||||
Net income attributable to the Company
|
$
|
8,126,939
|
|
|
$
|
4,490,962
|
|
$
|
14,470,359
|
|
|
$
|
10,337,583
|
|
Weighted average common shares outstanding – Basic
|
1,888,870
|
|
|
1,967,923
|
|
1,915,468
|
|
|
1,995,120
|
|
||||
Incremental shares outstanding assuming the exercise of dilutive stock options and SARs (share-settled)
|
6,722
|
|
|
4,310
|
|
6,531
|
|
|
4,923
|
|
||||
Weighted average common shares outstanding – Diluted
|
1,895,592
|
|
|
1,972,233
|
|
1,921,999
|
|
|
2,000,043
|
|
||||
Basic earnings per common share
|
$
|
4.30
|
|
|
$
|
2.28
|
|
$
|
7.55
|
|
|
$
|
5.18
|
|
Diluted earnings per common share
|
$
|
4.29
|
|
|
$
|
2.28
|
|
$
|
7.53
|
|
|
$
|
5.17
|
|
|
Number
Of Shares
|
|
Weighted
Average
Exercise Price
|
|
Average Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding as of January 1, 2015
|
21,000
|
|
|
$
|
51.30
|
|
|
3.64
|
|
$
|
453,510
|
|
SARs granted
|
4,500
|
|
|
73.00
|
|
|
|
|
|
|
||
SARs exercised
|
(2,000
|
)
|
|
47.88
|
|
|
|
|
|
|
||
Options exercised
|
(1,500
|
)
|
|
36.79
|
|
|
|
|
|
|
||
Outstanding as of December 31, 2015
|
22,000
|
|
|
$
|
57.04
|
|
|
3.93
|
|
$
|
945,055
|
|
SARs granted
|
4,500
|
|
|
93.87
|
|
|
|
|
|
|
||
SARs exercised
|
(2,000
|
)
|
|
32.00
|
|
|
|
|
|
|
||
Outstanding as of September 30, 2016
|
24,500
|
|
|
$
|
65.85
|
|
|
4.10
|
|
$
|
824,390
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable as of September 30, 2016
|
22,250
|
|
|
$
|
63.02
|
|
|
3.85
|
|
$
|
811,723
|
|
|
|
|
|
|
|
|
|
|||||
Unvested as of September 30, 2016
|
2,250
|
|
|
$
|
93.87
|
|
|
6.63
|
|
$
|
12,667
|
|
|
2016
|
|
2015
|
||
Expected life in years
|
7.0
|
|
|
7.0
|
|
Volatility
|
28.9
|
%
|
|
40.7
|
%
|
Interest rate
|
1.7
|
%
|
|
2.0
|
%
|
Yield rate
|
0.7
|
%
|
|
0.4
|
%
|
Three Months Ended September 30, 2016
|
Title
Insurance
|
|
All
Other
|
|
Intersegment
Eliminations
|
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
38,285,551
|
|
|
$
|
1,666,214
|
|
|
$
|
(550,369
|
)
|
|
$
|
39,401,396
|
|
Investment income
|
1,079,118
|
|
|
140,201
|
|
|
(58,336
|
)
|
|
1,160,983
|
|
||||
Net realized gain (loss) on investments
|
439,501
|
|
|
(175
|
)
|
|
—
|
|
|
439,326
|
|
||||
Total revenues
|
$
|
39,804,170
|
|
|
$
|
1,806,240
|
|
|
$
|
(608,705
|
)
|
|
$
|
41,001,705
|
|
Operating expenses
|
28,487,268
|
|
|
1,669,217
|
|
|
(532,947
|
)
|
|
29,623,538
|
|
||||
Income before income taxes
|
$
|
11,316,902
|
|
|
$
|
137,023
|
|
|
$
|
(75,758
|
)
|
|
$
|
11,378,167
|
|
Total assets
|
$
|
180,436,004
|
|
|
$
|
42,672,325
|
|
|
$
|
—
|
|
|
$
|
223,108,329
|
|
Three Months Ended September 30, 2015
|
Title
Insurance |
|
All
Other |
|
Intersegment
Eliminations |
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
32,583,093
|
|
|
$
|
1,684,088
|
|
|
$
|
(504,821
|
)
|
|
$
|
33,762,360
|
|
Investment income
|
1,000,839
|
|
|
140,024
|
|
|
(23,334
|
)
|
|
1,117,529
|
|
||||
Net realized loss on investments
|
(309,874
|
)
|
|
(28,757
|
)
|
|
—
|
|
|
(338,631
|
)
|
||||
Total revenues
|
$
|
33,274,058
|
|
|
$
|
1,795,355
|
|
|
$
|
(528,155
|
)
|
|
$
|
34,541,258
|
|
Operating expenses
|
27,001,636
|
|
|
1,590,524
|
|
|
(487,400
|
)
|
|
28,104,760
|
|
||||
Income before income taxes
|
$
|
6,272,422
|
|
|
$
|
204,831
|
|
|
$
|
(40,755
|
)
|
|
$
|
6,436,498
|
|
Total assets
|
$
|
160,754,846
|
|
|
$
|
41,790,756
|
|
|
$
|
—
|
|
|
$
|
202,545,602
|
|
Nine Months Ended September 30, 2016
|
Title
Insurance
|
|
All
Other
|
|
Intersegment
Eliminations
|
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
92,055,531
|
|
|
$
|
5,137,268
|
|
|
$
|
(1,554,688
|
)
|
|
$
|
95,638,111
|
|
Investment income
|
3,206,093
|
|
|
424,578
|
|
|
(151,672
|
)
|
|
3,478,999
|
|
||||
Net realized gain on investments
|
513,624
|
|
|
60,704
|
|
|
—
|
|
|
574,328
|
|
||||
Total revenues
|
$
|
95,775,248
|
|
|
$
|
5,622,550
|
|
|
$
|
(1,706,360
|
)
|
|
$
|
99,691,438
|
|
Operating expenses
|
75,766,983
|
|
|
4,923,205
|
|
|
(1,502,425
|
)
|
|
79,187,763
|
|
||||
Income before income taxes
|
$
|
20,008,265
|
|
|
$
|
699,345
|
|
|
$
|
(203,935
|
)
|
|
$
|
20,503,675
|
|
Total assets
|
$
|
180,436,004
|
|
|
$
|
42,672,325
|
|
|
$
|
—
|
|
|
$
|
223,108,329
|
|
Nine Months Ended September 30, 2015
|
Title
Insurance
|
|
All
Other
|
|
Intersegment
Eliminations
|
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
90,824,523
|
|
|
$
|
4,803,604
|
|
|
$
|
(1,331,644
|
)
|
|
$
|
94,296,483
|
|
Investment income
|
3,061,857
|
|
|
435,200
|
|
|
(70,002
|
)
|
|
3,427,055
|
|
||||
Net realized gain (loss) on investments
|
604,093
|
|
|
(2,757
|
)
|
|
—
|
|
|
601,336
|
|
||||
Total revenues
|
$
|
94,490,473
|
|
|
$
|
5,236,047
|
|
|
$
|
(1,401,646
|
)
|
|
$
|
98,324,874
|
|
Operating expenses
|
80,214,039
|
|
|
4,798,097
|
|
|
(1,279,381
|
)
|
|
83,732,755
|
|
||||
Income before income taxes
|
$
|
14,276,434
|
|
|
$
|
437,950
|
|
|
$
|
(122,265
|
)
|
|
$
|
14,592,119
|
|
Total assets
|
$
|
160,754,846
|
|
|
$
|
41,790,756
|
|
|
$
|
—
|
|
|
$
|
202,545,602
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
2016
|
|
2015
|
||||||||
Service cost – benefits earned during the year
|
$
|
2,545
|
|
|
$
|
4,187
|
|
$
|
7,635
|
|
|
$
|
12,561
|
|
Interest cost on the projected benefit obligation
|
8,781
|
|
|
7,693
|
|
26,343
|
|
|
23,079
|
|
||||
Amortization of unrecognized prior service cost
|
—
|
|
|
1,098
|
|
—
|
|
|
3,293
|
|
||||
Amortization of unrecognized losses
|
2,235
|
|
|
878
|
|
6,705
|
|
|
2,635
|
|
||||
Net periodic benefits costs
|
$
|
13,561
|
|
|
$
|
13,856
|
|
$
|
40,683
|
|
|
$
|
41,568
|
|
As of September 30, 2016
|
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
|
$
|
31,751,299
|
|
|
$
|
1,114,177
|
|
|
$
|
2,072
|
|
|
$
|
32,863,404
|
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
56,651,943
|
|
|
3,751,576
|
|
|
15,241
|
|
|
60,388,278
|
|
||||
Corporate debt securities
|
16,837,246
|
|
|
950,115
|
|
|
119
|
|
|
17,787,242
|
|
||||
Total
|
$
|
105,240,488
|
|
|
$
|
5,815,868
|
|
|
$
|
17,432
|
|
|
$
|
111,038,924
|
|
Equity securities, available-for-sale, at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stocks
|
$
|
24,958,456
|
|
|
$
|
14,974,237
|
|
|
$
|
97,814
|
|
|
$
|
39,834,879
|
|
Total
|
$
|
24,958,456
|
|
|
$
|
14,974,237
|
|
|
$
|
97,814
|
|
|
$
|
39,834,879
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds and certificates of deposit
|
$
|
3,925,296
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,925,296
|
|
Total
|
$
|
3,925,296
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,925,296
|
|
As of December 31, 2015
|
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
|
$
|
31,883,439
|
|
|
$
|
987,595
|
|
|
$
|
11,734
|
|
|
$
|
32,859,300
|
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
52,202,815
|
|
|
2,604,152
|
|
|
26,127
|
|
|
54,780,840
|
|
||||
Corporate debt securities
|
17,004,985
|
|
|
539,832
|
|
|
58,473
|
|
|
17,486,344
|
|
||||
Auction rate securities
|
924,587
|
|
|
15,313
|
|
|
—
|
|
|
939,900
|
|
||||
Total
|
$
|
102,015,826
|
|
|
$
|
4,146,892
|
|
|
$
|
96,334
|
|
|
$
|
106,066,384
|
|
Equity securities, available-for-sale, at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stocks and nonredeemable preferred stocks
|
$
|
23,855,873
|
|
|
$
|
13,785,968
|
|
|
$
|
128,377
|
|
|
$
|
37,513,464
|
|
Total
|
$
|
23,855,873
|
|
|
$
|
13,785,968
|
|
|
$
|
128,377
|
|
|
$
|
37,513,464
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds and certificates of deposit
|
$
|
6,865,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,865,406
|
|
Total
|
$
|
6,865,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,865,406
|
|
|
Available-for-Sale
|
||||||
|
Amortized
Cost
|
|
Fair
Value
|
||||
Due in one year or less
|
$
|
20,245,762
|
|
|
$
|
20,383,264
|
|
Due after one year through five years
|
34,757,122
|
|
|
36,493,362
|
|
||
Due five years through ten years
|
48,247,411
|
|
|
51,501,388
|
|
||
Due after ten years
|
1,990,193
|
|
|
2,660,910
|
|
||
Total
|
$
|
105,240,488
|
|
|
$
|
111,038,924
|
|
|
2016
|
|
2015
|
||||
Gross realized gains from securities:
|
|
|
|
|
|
||
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
$
|
161
|
|
|
$
|
—
|
|
Corporate debt securities
|
20
|
|
|
5,417
|
|
||
Common stocks and nonredeemable preferred stocks
|
880,647
|
|
|
1,436,386
|
|
||
Auction rate securities
|
74,996
|
|
|
—
|
|
||
Total
|
$
|
955,824
|
|
|
$
|
1,441,803
|
|
Gross realized losses from securities:
|
|
|
|
|
|
||
General obligations of U.S. states, territories and political subdivisions
|
$
|
(533
|
)
|
|
$
|
(12,319
|
)
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
(1,085
|
)
|
|
(397
|
)
|
||
Common stocks and nonredeemable preferred stocks
|
(168,688
|
)
|
|
(39,017
|
)
|
||
Other-than-temporary impairment of securities
|
(233,941
|
)
|
|
(668,904
|
)
|
||
Total
|
$
|
(404,247
|
)
|
|
$
|
(720,637
|
)
|
Net realized gain from securities
|
$
|
551,577
|
|
|
$
|
721,166
|
|
Net realized gain (loss) on other investments:
|
|
|
|
||||
Impairments of other investments
|
$
|
—
|
|
|
$
|
(233,069
|
)
|
Gains on other investments
|
22,751
|
|
|
113,239
|
|
||
Total
|
$
|
22,751
|
|
|
$
|
(119,830
|
)
|
Net realized gain on investments
|
$
|
574,328
|
|
|
$
|
601,336
|
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
As of September 30, 2016
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
3,594,415
|
|
|
$
|
(2,072
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,594,415
|
|
|
$
|
(2,072
|
)
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
1,737,905
|
|
|
(15,241
|
)
|
|
—
|
|
|
—
|
|
|
1,737,905
|
|
|
(15,241
|
)
|
||||||
Corporate debt securities
|
999,820
|
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
999,820
|
|
|
(119
|
)
|
||||||
Total fixed income securities
|
$
|
6,332,140
|
|
|
$
|
(17,432
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,332,140
|
|
|
$
|
(17,432
|
)
|
Equity securities
|
$
|
806,984
|
|
|
$
|
(97,814
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
806,984
|
|
|
$
|
(97,814
|
)
|
Total temporarily impaired securities
|
$
|
7,139,124
|
|
|
$
|
(115,246
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,139,124
|
|
|
$
|
(115,246
|
)
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
As of December 31, 2015
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
1,758,345
|
|
|
$
|
(11,734
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,758,345
|
|
|
$
|
(11,734
|
)
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
1,672,217
|
|
|
(5,138
|
)
|
|
1,183,963
|
|
|
(20,989
|
)
|
|
2,856,180
|
|
|
(26,127
|
)
|
||||||
Corporate debt securities
|
6,981,275
|
|
|
(58,473
|
)
|
|
—
|
|
|
—
|
|
|
6,981,275
|
|
|
(58,473
|
)
|
||||||
Total fixed income securities
|
$
|
10,411,837
|
|
|
$
|
(75,345
|
)
|
|
$
|
1,183,963
|
|
|
$
|
(20,989
|
)
|
|
$
|
11,595,800
|
|
|
$
|
(96,334
|
)
|
Equity securities
|
$
|
5,533,667
|
|
|
$
|
(128,377
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,533,667
|
|
|
$
|
(128,377
|
)
|
Total temporarily impaired securities
|
$
|
15,945,504
|
|
|
$
|
(203,722
|
)
|
|
$
|
1,183,963
|
|
|
$
|
(20,989
|
)
|
|
$
|
17,129,467
|
|
|
$
|
(224,711
|
)
|
Type of Investment
|
|
Balance Sheet Classification
|
|
Carrying Value
|
|
Estimated Fair Value
|
|
Maximum Potential Loss (a)
|
||||||
Tax credit LPs
|
|
Other investments
|
|
$
|
1,137,346
|
|
|
$
|
1,137,346
|
|
|
$
|
1,325,000
|
|
Real estate LLCs or LPs
|
|
Other investments
|
|
3,838,897
|
|
|
4,323,037
|
|
|
6,350,000
|
|
|||
Small business investment LPs
|
|
Other investments
|
|
3,082,723
|
|
|
2,072,658
|
|
|
9,100,000
|
|
|||
Total
|
|
|
|
$
|
8,058,966
|
|
|
$
|
7,533,041
|
|
|
$
|
16,775,000
|
|
(a)
|
|
Maximum potential loss is calculated as the total investment in the LLC or LP including any capital commitments that may have not yet been called. The Company is not exposed to any loss beyond the total commitment of its investment.
|
As of September 30, 2016
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Short-term investments
|
$
|
3,925,296
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,925,296
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock
|
39,834,879
|
|
|
—
|
|
|
—
|
|
|
39,834,879
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligations of U.S. states, territories and political subdivisions*
|
—
|
|
|
93,251,682
|
|
|
—
|
|
|
93,251,682
|
|
||||
Corporate debt securities*
|
—
|
|
|
17,787,242
|
|
|
—
|
|
|
17,787,242
|
|
||||
Total
|
$
|
43,760,175
|
|
|
$
|
111,038,924
|
|
|
$
|
—
|
|
|
$
|
154,799,099
|
|
As of December 31, 2015
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Short-term investments
|
$
|
6,865,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,865,406
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stock
|
37,513,464
|
|
|
—
|
|
|
—
|
|
|
37,513,464
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Obligations of U.S. states, territories and political subdivisions*
|
—
|
|
|
87,640,140
|
|
|
—
|
|
|
87,640,140
|
|
||||
Corporate debt securities*
|
—
|
|
|
17,486,344
|
|
|
939,900
|
|
|
18,426,244
|
|
||||
Total
|
$
|
44,378,870
|
|
|
$
|
105,126,484
|
|
|
$
|
939,900
|
|
|
$
|
150,445,254
|
|
As of September 30, 2016
|
Carrying Value
|
|
Estimated Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
$
|
26,898,991
|
|
|
$
|
26,898,991
|
|
|
$
|
26,898,991
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost-basis investments
|
4,119,328
|
|
|
4,367,372
|
|
|
—
|
|
|
—
|
|
|
4,367,372
|
|
|||||
Accrued dividends and interest
|
1,389,526
|
|
|
1,389,526
|
|
|
1,389,526
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
32,407,845
|
|
|
$
|
32,655,889
|
|
|
$
|
28,288,517
|
|
|
$
|
—
|
|
|
$
|
4,367,372
|
|
As of December 31, 2015
|
Carrying Value
|
|
Estimated Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
$
|
21,790,068
|
|
|
$
|
21,790,068
|
|
|
$
|
21,790,068
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost-basis investments
|
3,588,314
|
|
|
3,684,020
|
|
|
—
|
|
|
—
|
|
|
3,684,020
|
|
|||||
Accrued dividends and interest
|
1,004,126
|
|
|
1,004,126
|
|
|
1,004,126
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
26,382,508
|
|
|
$
|
26,478,214
|
|
|
$
|
22,794,194
|
|
|
$
|
—
|
|
|
$
|
3,684,020
|
|
Changes in fair value during the period ended:
|
2016
|
|
2015
|
||||
Beginning balance at January 1
|
$
|
939,900
|
|
|
$
|
939,100
|
|
Redemptions and sales
|
(1,000,000
|
)
|
|
—
|
|
||
Realized gain – included in net realized gain on investments
|
74,996
|
|
|
—
|
|
||
Unrealized (loss) gain – included in other comprehensive income (loss)
|
(14,896
|
)
|
|
800
|
|
||
Ending balance, net
|
$
|
—
|
|
|
$
|
939,900
|
|
As of September 30, 2016
|
Valuation
Method
|
|
Impaired
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total at
Estimated
Fair
Value
|
|
Impairment
Losses
|
||||||||||
Cost-basis investments
|
Fair Value
|
|
No
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total cost-basis investments
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
As of December 31, 2015
|
Valuation
Method
|
|
Impaired
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total at
Estimated
Fair
Value
|
|
Impairment
Losses
|
||||||||||
Cost-basis investments
|
Fair Value
|
|
Yes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
163,350
|
|
|
$
|
163,350
|
|
|
$
|
(233,069
|
)
|
Total cost-basis investments
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
163,350
|
|
|
$
|
163,350
|
|
|
$
|
(233,069
|
)
|
Financial Statement Classification,
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||
Consolidated Balance Sheets
|
|
||||||
Other investments
|
$
|
6,507,000
|
|
|
$
|
6,519,000
|
|
Premiums and fees receivable
|
$
|
78,000
|
|
|
$
|
719,000
|
|
Financial Statement Classification, |
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
Consolidated Statements of Income
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net premiums written
|
$
|
4,513,000
|
|
|
$
|
3,451,000
|
|
|
$
|
10,993,000
|
|
|
$
|
10,436,000
|
|
Other income
|
$
|
809,000
|
|
|
$
|
716,000
|
|
|
$
|
1,541,000
|
|
|
$
|
2,230,000
|
|
Commissions to agents
|
$
|
3,062,000
|
|
|
$
|
2,326,000
|
|
|
$
|
7,465,000
|
|
|
$
|
7,176,000
|
|
Three Months Ended September 30, 2016
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at July 1
|
$
|
14,331,320
|
|
|
$
|
(111,776
|
)
|
|
$
|
14,219,544
|
|
Other comprehensive loss before reclassifications
|
(489,001
|
)
|
|
—
|
|
|
(489,001
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(282,461
|
)
|
|
1,476
|
|
|
(280,985
|
)
|
|||
Net current-period other comprehensive (loss) income
|
(771,462
|
)
|
|
1,476
|
|
|
(769,986
|
)
|
|||
Ending balance
|
$
|
13,559,858
|
|
|
$
|
(110,300
|
)
|
|
$
|
13,449,558
|
|
Three Months Ended September 30, 2015
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at July 1
|
$
|
11,099,177
|
|
|
$
|
(75,380
|
)
|
|
$
|
11,023,797
|
|
Other comprehensive loss before reclassifications
|
(1,549,501
|
)
|
|
—
|
|
|
(1,549,501
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
130,851
|
|
|
1,304
|
|
|
132,155
|
|
|||
Net current-period other comprehensive (loss) income
|
(1,418,650
|
)
|
|
1,304
|
|
|
(1,417,346
|
)
|
|||
Ending balance
|
$
|
9,680,527
|
|
|
$
|
(74,076
|
)
|
|
$
|
9,606,451
|
|
Nine Months Ended September 30, 2016
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at January 1
|
$
|
11,597,741
|
|
|
$
|
(114,726
|
)
|
|
$
|
11,483,015
|
|
Other comprehensive income before reclassifications
|
2,325,045
|
|
|
—
|
|
|
2,325,045
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(362,928
|
)
|
|
4,426
|
|
|
(358,502
|
)
|
|||
Net current-period other comprehensive income
|
1,962,117
|
|
|
4,426
|
|
|
1,966,543
|
|
|||
Ending balance
|
$
|
13,559,858
|
|
|
$
|
(110,300
|
)
|
|
$
|
13,449,558
|
|
Nine Months Ended September 30, 2015
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at January 1
|
$
|
12,934,497
|
|
|
$
|
(77,988
|
)
|
|
$
|
12,856,509
|
|
Other comprehensive loss before reclassifications
|
(2,777,909
|
)
|
|
—
|
|
|
(2,777,909
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(476,061
|
)
|
|
3,912
|
|
|
(472,149
|
)
|
|||
Net current-period other comprehensive (loss) income
|
(3,253,970
|
)
|
|
3,912
|
|
|
(3,250,058
|
)
|
|||
Ending balance
|
$
|
9,680,527
|
|
|
$
|
(74,076
|
)
|
|
$
|
9,606,451
|
|
Three Months Ended September 30, 2016
|
|
|
|
||
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 investments
|
$
|
545,925
|
|
|
|
Other-than-temporary impairments
|
(118,703
|
)
|
|
|
|
Total
|
$
|
427,222
|
|
|
Net realized gain (loss) on investments
|
Tax
|
(144,761
|
)
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
282,461
|
|
|
|
Amortization related to postretirement benefit plans:
|
|
|
|
|
|
Prior year service cost
|
$
|
—
|
|
|
|
Unrecognized loss
|
(2,235
|
)
|
|
|
|
Total
|
$
|
(2,235
|
)
|
|
(a)
|
Tax
|
759
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(1,476
|
)
|
|
|
Reclassifications for the period
|
$
|
280,985
|
|
|
|
Three Months Ended September 30, 2015
|
|
|
|
||
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 investments
|
$
|
458,058
|
|
|
|
Other-than-temporary impairments
|
(657,755
|
)
|
|
|
|
Total
|
$
|
(199,697
|
)
|
|
Net realized gain (loss) on investments
|
Tax
|
68,846
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(130,851
|
)
|
|
|
Amortization related to postretirement benefit plans:
|
|
|
|
|
|
Prior year service cost
|
$
|
(1,098
|
)
|
|
|
Unrecognized loss
|
(878
|
)
|
|
|
|
Total
|
$
|
(1,976
|
)
|
|
(a)
|
Tax
|
672
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(1,304
|
)
|
|
|
Reclassifications for the period
|
$
|
(132,155
|
)
|
|
|
Nine Months Ended September 30, 2016
|
|
|
|
||
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 investments
|
$
|
785,517
|
|
|
|
Other-than-temporary impairments
|
(233,941
|
)
|
|
|
|
Total
|
$
|
551,576
|
|
|
Net realized gain (loss) on investments
|
Tax
|
(188,648
|
)
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
362,928
|
|
|
|
Amortization related to postretirement benefit plans:
|
|
|
|
|
|
Prior year service cost
|
—
|
|
|
|
|
Unrecognized loss
|
(6,705
|
)
|
|
|
|
Total
|
$
|
(6,705
|
)
|
|
(a)
|
Tax
|
2,279
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(4,426
|
)
|
|
|
Reclassifications for the period
|
$
|
358,502
|
|
|
|
Nine Months Ended September 30, 2015
|
|
|
|
||
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 investments
|
$
|
1,390,070
|
|
|
|
Other-than-temporary impairments
|
(668,904
|
)
|
|
|
|
Total
|
$
|
721,166
|
|
|
Net realized gain (loss) on investments
|
Tax
|
(245,105
|
)
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
476,061
|
|
|
|
Amortization related to postretirement benefit plans:
|
|
|
|
||
Prior year service cost
|
(3,293
|
)
|
|
|
|
Unrecognized loss
|
(2,635
|
)
|
|
|
|
Total
|
$
|
(5,928
|
)
|
|
(a)
|
Tax
|
2,016
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(3,912
|
)
|
|
|
Reclassifications for the period
|
$
|
472,149
|
|
|
|
(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.
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2016
|
|
2015
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Net premiums written
|
|
$
|
36,511,373
|
|
|
$
|
30,945,532
|
|
$
|
87,810,602
|
|
|
$
|
86,372,154
|
|
Investment income – interest and dividends
|
|
1,160,983
|
|
|
1,117,529
|
|
3,478,999
|
|
|
3,427,055
|
|
||||
Net realized gain (loss) on investments
|
|
439,326
|
|
|
(338,631
|
)
|
574,328
|
|
|
601,336
|
|
||||
Other
|
|
2,890,023
|
|
|
2,816,828
|
|
7,827,509
|
|
|
7,924,329
|
|
||||
Total Revenues
|
|
41,001,705
|
|
|
34,541,258
|
|
99,691,438
|
|
|
98,324,874
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Commissions to agents
|
|
18,739,151
|
|
|
16,898,323
|
|
45,946,379
|
|
|
48,393,553
|
|
||||
(Benefit) provision for claims
|
|
(1,067,853
|
)
|
|
703,979
|
|
(403,982
|
)
|
|
3,621,401
|
|
||||
Salaries, employee benefits and payroll taxes
|
|
8,300,823
|
|
|
6,957,874
|
|
22,945,972
|
|
|
21,101,955
|
|
||||
Office occupancy and operations
|
|
1,496,948
|
|
|
1,342,288
|
|
4,526,710
|
|
|
4,089,806
|
|
||||
Business development
|
|
608,532
|
|
|
568,189
|
|
1,695,180
|
|
|
1,633,358
|
|
||||
Filing fees, franchise and local taxes
|
|
191,574
|
|
|
134,880
|
|
688,731
|
|
|
572,621
|
|
||||
Premium and retaliatory taxes
|
|
673,551
|
|
|
573,336
|
|
1,559,631
|
|
|
1,684,674
|
|
||||
Professional and contract labor fees
|
|
523,504
|
|
|
661,879
|
|
1,599,603
|
|
|
1,926,469
|
|
||||
Other
|
|
157,308
|
|
|
264,012
|
|
629,539
|
|
|
708,918
|
|
||||
Total Operating Expenses
|
|
29,623,538
|
|
|
28,104,760
|
|
79,187,763
|
|
|
83,732,755
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before Income Taxes
|
|
11,378,167
|
|
|
6,436,498
|
|
20,503,675
|
|
|
14,592,119
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Provision for Income Taxes
|
|
3,249,000
|
|
|
1,941,000
|
|
6,040,000
|
|
|
4,250,000
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net Income Attributable to the Company
|
|
$
|
8,126,939
|
|
|
$
|
4,490,962
|
|
$
|
14,470,359
|
|
|
$
|
10,337,583
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2016
|
|
%
|
|
2015
|
|
%
|
2016
|
|
%
|
|
2015
|
|
%
|
||||||||||||
Home and Branch
|
$
|
10,860,361
|
|
|
29.7
|
%
|
|
$
|
7,967,826
|
|
|
25.7
|
%
|
$
|
24,751,134
|
|
|
28.2
|
%
|
|
$
|
21,281,363
|
|
|
24.6
|
%
|
Agency
|
25,651,012
|
|
|
70.3
|
%
|
|
22,977,706
|
|
|
74.3
|
%
|
63,059,468
|
|
|
71.8
|
%
|
|
65,090,791
|
|
|
75.4
|
%
|
||||
Total
|
$
|
36,511,373
|
|
|
100.0
|
%
|
|
$
|
30,945,532
|
|
|
100.0
|
%
|
$
|
87,810,602
|
|
|
100.0
|
%
|
|
$
|
86,372,154
|
|
|
100.0
|
%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
State
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
North Carolina
|
|
$
|
13,959,573
|
|
|
$
|
10,320,737
|
|
|
$
|
31,978,564
|
|
|
$
|
27,618,674
|
|
Texas
|
|
7,069,431
|
|
|
6,460,351
|
|
|
17,367,044
|
|
|
21,047,559
|
|
||||
South Carolina
|
|
3,552,259
|
|
|
3,280,208
|
|
|
8,322,931
|
|
|
8,344,775
|
|
||||
Georgia
|
|
3,498,742
|
|
|
2,479,942
|
|
|
8,013,787
|
|
|
5,551,143
|
|
||||
Virginia
|
|
1,756,468
|
|
|
1,558,932
|
|
|
4,745,121
|
|
|
4,235,041
|
|
||||
All Others
|
|
6,703,648
|
|
|
6,898,880
|
|
|
17,442,568
|
|
|
19,698,481
|
|
||||
Premiums
|
|
36,540,121
|
|
|
30,999,050
|
|
|
87,870,015
|
|
|
86,495,673
|
|
||||
Reinsurance Assumed
|
|
—
|
|
|
—
|
|
|
10,946
|
|
|
23,195
|
|
||||
Reinsurance Ceded
|
|
(28,748
|
)
|
|
(53,518
|
)
|
|
(70,359
|
)
|
|
(146,714
|
)
|
||||
Net Premiums Written
|
|
$
|
36,511,373
|
|
|
$
|
30,945,532
|
|
|
$
|
87,810,602
|
|
|
$
|
86,372,154
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2016
|
|
%
|
|
2015
|
|
%
|
|
2016
|
|
%
|
|
2015
|
|
%
|
||||||||||||
Title Insurance
|
$
|
27,967,210
|
|
|
94.4
|
%
|
|
$
|
26,529,660
|
|
|
94.4
|
%
|
|
$
|
74,302,399
|
|
|
93.8
|
%
|
|
$
|
78,992,688
|
|
|
94.3
|
%
|
All Other
|
1,656,328
|
|
|
5.6
|
%
|
|
1,575,100
|
|
|
5.6
|
%
|
|
4,885,364
|
|
|
6.2
|
%
|
|
4,740,067
|
|
|
5.7
|
%
|
||||
Total
|
$
|
29,623,538
|
|
|
100.0
|
%
|
|
$
|
28,104,760
|
|
|
100.0
|
%
|
|
$
|
79,187,763
|
|
|
100.0
|
%
|
|
$
|
83,732,755
|
|
|
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, could result in material losses to the Company’s investments;
|
•
|
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’s reliance upon North Carolina 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 compliance by service providers, including title insurance agents, with federal consumer financial laws;
|
•
|
possible downgrades from a rating agency, which could result in a loss of underwriting business;
|
•
|
the inability of the Company to manage, develop and implement technological advancements and prevent system interruptions or unauthorized system intrusions;
|
•
|
statutory requirements applicable to the Company’s insurance subsidiaries that require them to maintain minimum levels of capital, surplus and reserves and that restrict the amount of dividends they may pay to the Company without prior regulatory approval;
|
•
|
the desirability to maintain capital above statutory minimum requirements for competitive, marketing and other reasons;
|
•
|
heightened regulatory scrutiny and investigations of the title insurance industry;
|
•
|
the Company’s dependence on key management and marketing personnel, the loss of whom could have a material adverse effect on the Company’s business;
|
•
|
difficulty managing growth, whether organic or through acquisitions;
|
•
|
reform of government-sponsored entities that could adversely impact the Company;
|
•
|
policies and procedures for the mitigation of risks that may be insufficient to prevent losses;
|
•
|
the shareholder rights plan could discourage transactions involving actual or potential changes of control; 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
|
|
|
|
|
|
|
461,710
|
|
||||
July 2016
|
18,170
|
|
|
$
|
96.10
|
|
|
18,170
|
|
|
443,540
|
|
August 2016
|
13,763
|
|
|
$
|
97.32
|
|
|
13,763
|
|
|
429,777
|
|
September 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
429,777
|
|
Total:
|
31,933
|
|
|
$
|
96.63
|
|
|
31,933
|
|
|
429,777
|
|
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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