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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 | |
---|---|---|---|---|---|---|---|---|---|---|
2.93 | 1.57% | 188.98 | 188.36 | 189.00 | 188.98 | 187.20 | 187.20 | 6,622 | 16:07:24 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
North Carolina
|
|
56-1110199
|
|
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, no par value
|
|
ITIC
|
|
The NASDAQ Stock Market LLC
|
Rights to Purchase Series A Junior Participating Preferred Stock
|
|
|
|
The NASDAQ Stock Market LLC
|
|
Large accelerated filer
|
|
☐
|
|
Accelerated filer
|
|
☒
|
|
|
|
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
|
☐
|
|
PART I.
|
FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
Financial Statements:
|
|
|
|
|
|
Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018
|
|
|
|
|
|
Consolidated Statements of Income For the Three and Nine Months Ended September 30, 2019 and 2018
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income For the Three and Nine Months Ended September 30, 2019 and 2018
|
|
|
|
|
|
Consolidated Statements of Stockholders’ Equity For the Three and Nine Months Ended September 30, 2019 and 2018
|
|
|
|
|
|
Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2019 and 2018
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
PART II.
|
OTHER INFORMATION
|
|
|
|
|
Legal Proceedings
|
||
|
|
|
Risk Factors
|
||
|
|
|
|
|
|
Item 3.
|
Defaults Upon Senior Securities
|
|
|
|
|
Item 4.
|
Mine Safety Disclosures
|
|
|
|
|
Item 5.
|
Other Information
|
|
|
|
|
|
|
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
43,992
|
|
|
$
|
18,694
|
|
Investments:
|
|
|
|
||||
Fixed maturity securities, available-for-sale, at fair value (amortized cost: September 30, 2019: $80,947; December 31, 2018: $87,714)
|
85,037
|
|
|
88,957
|
|
||
Equity securities, at fair value (cost: September 30, 2019: $32,332; December 31, 2018: $31,255)
|
55,785
|
|
|
48,489
|
|
||
Short-term investments
|
21,714
|
|
|
32,787
|
|
||
Other investments
|
12,689
|
|
|
12,436
|
|
||
Total investments
|
175,225
|
|
|
182,669
|
|
||
|
|
|
|
||||
Premium and fees receivable
|
12,630
|
|
|
12,128
|
|
||
Accrued interest and dividends
|
1,161
|
|
|
946
|
|
||
Prepaid expenses and other receivables
|
6,676
|
|
|
7,288
|
|
||
Property, net
|
9,914
|
|
|
10,304
|
|
||
Goodwill and other intangible assets, net
|
10,401
|
|
|
10,780
|
|
||
Operating lease right-of-use assets
|
4,619
|
|
|
—
|
|
||
Other assets
|
1,496
|
|
|
1,459
|
|
||
Total Assets
|
$
|
266,114
|
|
|
$
|
244,268
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
||
Reserve for claims
|
$
|
31,805
|
|
|
$
|
31,729
|
|
Accounts payable and accrued liabilities
|
27,530
|
|
|
27,735
|
|
||
Operating lease liabilities
|
4,622
|
|
|
—
|
|
||
Current income taxes payable
|
142
|
|
|
4,981
|
|
||
Deferred income taxes, net
|
6,125
|
|
|
4,184
|
|
||
Total liabilities
|
70,224
|
|
|
68,629
|
|
||
|
|
|
|
||||
Commitments and Contingencies
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Stockholders’ Equity:
|
|
|
|
|
|
||
Preferred stock (1,000 authorized shares; no shares issued)
|
—
|
|
|
—
|
|
||
Common stock – no par value (10,000 authorized shares; 1,889 and 1,887 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively, excluding in each period 292 shares of common stock held by the Company)
|
—
|
|
|
—
|
|
||
Retained earnings
|
192,695
|
|
|
174,690
|
|
||
Accumulated other comprehensive income
|
3,195
|
|
|
949
|
|
||
Total stockholders' equity
|
195,890
|
|
|
175,639
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
266,114
|
|
|
$
|
244,268
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums written
|
|
$
|
40,169
|
|
|
$
|
39,422
|
|
|
$
|
103,942
|
|
|
$
|
104,123
|
|
Escrow and other title-related fees
|
|
2,393
|
|
|
1,812
|
|
|
5,616
|
|
|
5,465
|
|
||||
Non-title services
|
|
2,539
|
|
|
1,795
|
|
|
7,444
|
|
|
5,083
|
|
||||
Interest and dividends
|
|
1,156
|
|
|
1,138
|
|
|
3,605
|
|
|
3,381
|
|
||||
Other investment income
|
|
708
|
|
|
829
|
|
|
2,044
|
|
|
2,279
|
|
||||
Net realized investment gains
|
|
423
|
|
|
188
|
|
|
1,199
|
|
|
629
|
|
||||
Changes in the estimated fair value of equity security investments
|
|
406
|
|
|
2,920
|
|
|
6,218
|
|
|
2,626
|
|
||||
Other
|
|
145
|
|
|
157
|
|
|
550
|
|
|
387
|
|
||||
Total Revenues
|
|
47,939
|
|
|
48,261
|
|
|
130,618
|
|
|
123,973
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Commissions to agents
|
|
19,928
|
|
|
18,490
|
|
|
51,261
|
|
|
48,942
|
|
||||
Provision for claims
|
|
987
|
|
|
997
|
|
|
3,610
|
|
|
155
|
|
||||
Personnel expenses
|
|
11,576
|
|
|
11,096
|
|
|
34,871
|
|
|
33,234
|
|
||||
Office and technology expenses
|
|
2,350
|
|
|
2,208
|
|
|
6,803
|
|
|
6,603
|
|
||||
Other expenses
|
|
3,079
|
|
|
2,910
|
|
|
8,821
|
|
|
8,440
|
|
||||
Total Operating Expenses
|
|
37,920
|
|
|
35,701
|
|
|
105,366
|
|
|
97,374
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before Income Taxes
|
|
10,019
|
|
|
12,560
|
|
|
25,252
|
|
|
26,599
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Provision for Income Taxes
|
|
2,067
|
|
|
1,927
|
|
|
5,174
|
|
|
4,873
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net Income
|
|
7,952
|
|
|
10,633
|
|
|
20,078
|
|
|
21,726
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net Loss Attributable to Noncontrolling Interests
|
|
—
|
|
|
1
|
|
|
—
|
|
|
31
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net Income Attributable to the Company
|
|
$
|
7,952
|
|
|
$
|
10,634
|
|
|
$
|
20,078
|
|
|
$
|
21,757
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic Earnings per Common Share
|
|
$
|
4.21
|
|
|
$
|
5.64
|
|
|
$
|
10.63
|
|
|
$
|
11.53
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Shares Outstanding – Basic
|
|
1,889
|
|
|
1,887
|
|
|
1,888
|
|
|
1,886
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted Earnings per Common Share
|
|
$
|
4.20
|
|
|
$
|
5.61
|
|
|
$
|
10.59
|
|
|
$
|
11.47
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Shares Outstanding – Diluted
|
|
1,895
|
|
|
1,897
|
|
|
1,896
|
|
|
1,896
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
|
$
|
7,952
|
|
|
$
|
10,633
|
|
|
$
|
20,078
|
|
|
$
|
21,726
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized gain (loss) on investments arising during the period
|
|
431
|
|
|
(618
|
)
|
|
2,847
|
|
|
(2,536
|
)
|
||||
Other comprehensive income (loss), before tax
|
|
431
|
|
|
(618
|
)
|
|
2,847
|
|
|
(2,536
|
)
|
||||
Income tax expense (benefit) related to net unrealized gain (loss) on investments arising during the period
|
|
90
|
|
|
(131
|
)
|
|
601
|
|
|
(537
|
)
|
||||
Net income tax expense (benefit) on other comprehensive income (loss)
|
|
90
|
|
|
(131
|
)
|
|
601
|
|
|
(537
|
)
|
||||
Other comprehensive income (loss)
|
|
341
|
|
|
(487
|
)
|
|
2,246
|
|
|
(1,999
|
)
|
||||
Comprehensive Income
|
|
$
|
8,293
|
|
|
$
|
10,146
|
|
|
$
|
22,324
|
|
|
$
|
19,727
|
|
Comprehensive loss attributable to noncontrolling interests
|
|
—
|
|
|
1
|
|
|
—
|
|
|
31
|
|
||||
Comprehensive Income Attributable to the Company
|
|
$
|
8,293
|
|
|
$
|
10,147
|
|
|
$
|
22,324
|
|
|
$
|
19,758
|
|
|
Common Stock
|
|
Retained Earnings
|
|
|
Accumulated
Other
Comprehensive
Income
|
|
|
Noncontrolling
Interests
|
|
|
Total
Stockholders’
Equity
|
|
|||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, July 1, 2018
|
1,887
|
|
|
$
|
—
|
|
|
$
|
185,252
|
|
|
$
|
806
|
|
|
$
|
55
|
|
|
$
|
186,113
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
10,634
|
|
|
|
|
|
|
|
10,634
|
|
||||||
Dividends paid ($0.40 per share)
|
|
|
|
|
|
|
(755
|
)
|
|
|
|
|
|
|
(755
|
)
|
||||||
Repurchases of common stock
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
||||||
Exercise of stock appreciation rights
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
||||||
Share-based compensation expense related to stock appreciation rights
|
|
|
|
|
|
|
89
|
|
|
|
|
|
|
|
89
|
|
||||||
Cumulative effect adjustment for adoption of new accounting standards
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(487
|
)
|
|
|
|
(487
|
)
|
||||||
Distribution of equity to noncontrolling interests
|
|
|
|
|
|
|
|
|
(52
|
)
|
|
(52
|
)
|
|||||||||
Net loss attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||||||
Balance, September 30, 2018
|
1,887
|
|
|
$
|
—
|
|
|
$
|
195,220
|
|
|
$
|
319
|
|
|
$
|
2
|
|
|
$
|
195,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, July 1, 2019
|
1,889
|
|
|
$
|
—
|
|
|
$
|
185,441
|
|
|
$
|
2,854
|
|
|
$
|
—
|
|
|
$
|
188,295
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
7,952
|
|
|
|
|
|
|
|
7,952
|
|
||||||
Dividends paid ($0.40 per share)
|
|
|
|
|
|
|
(755
|
)
|
|
|
|
|
|
|
(755
|
)
|
||||||
Repurchases of common stock
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
||||||
Exercise of stock appreciation rights
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
||||||
Share-based compensation expense related to stock appreciation rights
|
|
|
|
|
|
|
57
|
|
|
|
|
|
|
|
57
|
|
||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
341
|
|
|
|
|
341
|
|
||||||
Balance, September 30, 2019
|
1,889
|
|
|
$
|
—
|
|
|
$
|
192,695
|
|
|
$
|
3,195
|
|
|
$
|
—
|
|
|
$
|
195,890
|
|
|
Common Stock
|
|
Retained Earnings
|
|
|
Accumulated
Other
Comprehensive
Income
|
|
|
Noncontrolling
Interests
|
|
|
Total
Stockholders’
Equity
|
|
|||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, January 1, 2018
|
1,886
|
|
|
$
|
—
|
|
|
$
|
161,891
|
|
|
$
|
15,945
|
|
|
$
|
85
|
|
|
$
|
177,921
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
21,757
|
|
|
|
|
|
|
|
21,757
|
|
||||||
Dividends paid ($1.20 per share)
|
|
|
|
|
|
|
(2,264
|
)
|
|
|
|
|
|
|
(2,264
|
)
|
||||||
Repurchases of common stock
|
—
|
|
|
|
|
|
(29
|
)
|
|
|
|
|
|
|
(29
|
)
|
||||||
Exercise of stock appreciation rights
|
1
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
(1
|
)
|
||||||
Share-based compensation expense related to stock appreciation rights
|
|
|
|
|
|
|
239
|
|
|
|
|
|
|
|
239
|
|
||||||
Cumulative effect adjustment for adoption of new accounting standards
|
|
|
|
|
13,627
|
|
|
(13,627
|
)
|
|
|
|
—
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(1,999
|
)
|
|
|
|
(1,999
|
)
|
||||||
Distribution of equity to noncontrolling interests
|
|
|
|
|
|
|
|
|
(52
|
)
|
|
(52
|
)
|
|||||||||
Net loss attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(31
|
)
|
|
(31
|
)
|
|||||||||
Balance, September 30, 2018
|
1,887
|
|
|
$
|
—
|
|
|
$
|
195,220
|
|
|
$
|
319
|
|
|
$
|
2
|
|
|
$
|
195,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, January 1, 2019
|
1,887
|
|
|
$
|
—
|
|
|
$
|
174,690
|
|
|
$
|
949
|
|
|
$
|
—
|
|
|
$
|
175,639
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
20,078
|
|
|
|
|
|
|
|
20,078
|
|
||||||
Dividends paid ($1.20 per share)
|
|
|
|
|
|
|
(2,266
|
)
|
|
|
|
|
|
|
(2,266
|
)
|
||||||
Repurchases of common stock
|
—
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
(11
|
)
|
||||||
Exercise of stock appreciation rights
|
2
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
||||||
Share-based compensation expense related to stock appreciation rights
|
|
|
|
|
|
|
204
|
|
|
|
|
|
|
|
204
|
|
||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
2,246
|
|
|
|
|
2,246
|
|
|||||||
Balance, September 30, 2019
|
1,889
|
|
|
$
|
—
|
|
|
$
|
192,695
|
|
|
$
|
3,195
|
|
|
$
|
—
|
|
|
$
|
195,890
|
|
|
|
Nine Months Ended
September 30, |
||||||
|
|
2019
|
|
2018
|
||||
Operating Activities
|
|
|
|
|
||||
Net income
|
|
$
|
20,078
|
|
|
$
|
21,726
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation
|
|
1,298
|
|
|
1,234
|
|
||
Amortization of investments, net
|
|
492
|
|
|
617
|
|
||
Amortization of other intangible assets, net
|
|
379
|
|
|
451
|
|
||
Share-based compensation expense related to stock appreciation rights
|
|
204
|
|
|
239
|
|
||
Net (gain) loss on disposals of property
|
|
(28
|
)
|
|
12
|
|
||
Net realized investment gains
|
|
(1,199
|
)
|
|
(629
|
)
|
||
Net change in estimated fair value of equity security investments
|
|
(6,218
|
)
|
|
(2,626
|
)
|
||
Net earnings from other investments
|
|
(1,286
|
)
|
|
(1,471
|
)
|
||
Provision for claims
|
|
3,610
|
|
|
155
|
|
||
Provision for deferred income taxes
|
|
1,340
|
|
|
3,134
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||
Increase in premium and fees receivables
|
|
(502
|
)
|
|
(2,557
|
)
|
||
Decrease (increase) in other assets
|
|
360
|
|
|
(69
|
)
|
||
Increase in operating lease right-of-use assets
|
|
(4,619
|
)
|
|
—
|
|
||
Increase in current income taxes receivable
|
|
—
|
|
|
(2,190
|
)
|
||
Decrease in accounts payable and accrued liabilities
|
|
(205
|
)
|
|
(128
|
)
|
||
Increase in operating lease liabilities
|
|
4,622
|
|
|
—
|
|
||
Decrease in current income taxes payable
|
|
(4,839
|
)
|
|
—
|
|
||
Payments of claims, net of recoveries
|
|
(3,534
|
)
|
|
(2,581
|
)
|
||
Net cash provided by operating activities
|
|
9,953
|
|
|
15,317
|
|
||
|
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
|
||
Purchases of fixed maturities
|
|
(1,235
|
)
|
|
—
|
|
||
Purchases of equity securities
|
|
(3,921
|
)
|
|
(2,484
|
)
|
||
Purchases of short-term investments
|
|
(89,519
|
)
|
|
(44,403
|
)
|
||
Purchases of other investments
|
|
(1,456
|
)
|
|
(730
|
)
|
||
Proceeds from sales and maturities of fixed maturity securities
|
|
7,280
|
|
|
8,155
|
|
||
Proceeds from sales of equity securities
|
|
4,040
|
|
|
1,728
|
|
||
Proceeds from sales and maturities of short-term investments
|
|
100,821
|
|
|
40,697
|
|
||
Proceeds from sales and distributions of other investments
|
|
2,490
|
|
|
2,238
|
|
||
Proceeds from sales of other assets
|
|
2
|
|
|
3
|
|
||
Purchases of property
|
|
(1,020
|
)
|
|
(1,580
|
)
|
||
Proceeds from the sale of property
|
|
140
|
|
|
53
|
|
||
Net cash provided by investing activities
|
|
17,622
|
|
|
3,677
|
|
||
|
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
|
||
Repurchases of common stock
|
|
(11
|
)
|
|
(29
|
)
|
||
Exercise of stock appreciation rights
|
|
—
|
|
|
(1
|
)
|
||
Distribution of equity for noncontrolling interest
|
|
—
|
|
|
(52
|
)
|
||
Dividends paid
|
|
(2,266
|
)
|
|
(2,264
|
)
|
||
Net cash used in financing activities
|
|
(2,277
|
)
|
|
(2,346
|
)
|
||
|
|
|
|
|
||||
Net Increase in Cash and Cash Equivalents
|
|
25,298
|
|
|
16,648
|
|
||
Cash and Cash Equivalents, Beginning of Period
|
|
18,694
|
|
|
20,214
|
|
||
Cash and Cash Equivalents, End of Period
|
|
$
|
43,992
|
|
|
$
|
36,862
|
|
Consolidated Statements of Cash Flows, continued
|
|
|
||||||
|
|
Nine Months Ended
September 30, |
||||||
|
|
2019
|
|
2018
|
||||
Supplemental Disclosures:
|
|
|
|
|
||||
Cash Paid During the Year for:
|
|
|
|
|
||||
Income tax payments, net
|
|
$
|
9,150
|
|
|
$
|
5,477
|
|
Non Cash Investing and Financing Activities:
|
|
|
|
|
||||
Non cash net unrealized (gain) loss on investments, net of deferred tax (provision) benefit
of $(601) and $537 for September 30, 2019 and 2018, respectively |
|
$
|
(2,246
|
)
|
|
$
|
1,999
|
|
(in thousands)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Balance, beginning of period
|
$
|
31,729
|
|
|
$
|
34,801
|
|
Provision (benefit), charged to operations
|
3,610
|
|
|
(332
|
)
|
||
Payments of claims, net of recoveries
|
(3,534
|
)
|
|
(2,740
|
)
|
||
Balance, end of period
|
$
|
31,805
|
|
|
$
|
31,729
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands, except per share amounts)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income attributable to the Company
|
|
$
|
7,952
|
|
|
$
|
10,634
|
|
|
$
|
20,078
|
|
|
$
|
21,757
|
|
Weighted average common shares outstanding – Basic
|
|
1,889
|
|
|
1,887
|
|
|
1,888
|
|
|
1,886
|
|
||||
Incremental shares outstanding assuming the exercise of dilutive SARs (share-settled)
|
|
6
|
|
|
10
|
|
|
8
|
|
|
10
|
|
||||
Weighted average common shares outstanding – Diluted
|
|
1,895
|
|
|
1,897
|
|
|
1,896
|
|
|
1,896
|
|
||||
Basic earnings per common share
|
|
$
|
4.21
|
|
|
$
|
5.64
|
|
|
$
|
10.63
|
|
|
$
|
11.53
|
|
Diluted earnings per common share
|
|
$
|
4.20
|
|
|
$
|
5.61
|
|
|
$
|
10.59
|
|
|
$
|
11.47
|
|
(in thousands, except weighted average exercise price and average remaining contractual term)
|
Number
Of Shares
|
|
Weighted
Average
Exercise Price
|
|
Average Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
|
||||
Outstanding as of January 1, 2018
|
25
|
|
|
$
|
93.40
|
|
|
3.98
|
|
2,624
|
|
SARs granted
|
4
|
|
|
188.71
|
|
|
|
|
|
|
|
SARs exercised
|
(1
|
)
|
|
41.50
|
|
|
|
|
|
|
|
Outstanding as of December 31, 2018
|
28
|
|
|
$
|
110.27
|
|
|
3.64
|
|
2,019
|
|
SARs granted
|
4
|
|
|
162.81
|
|
|
|
|
|
|
|
SARs exercised
|
(2
|
)
|
|
50.50
|
|
|
|
|
|
|
|
Outstanding as of September 30, 2019
|
30
|
|
|
$
|
124.13
|
|
|
3.78
|
|
1,367
|
|
|
|
|
|
|
|
|
|
||||
Exercisable as of September 30, 2019
|
28
|
|
|
$
|
120.99
|
|
|
3.55
|
|
1,367
|
|
|
|
|
|
|
|
|
|
||||
Unvested as of September 30, 2019
|
2
|
|
|
$
|
162.81
|
|
|
6.63
|
|
—
|
|
|
2019
|
|
2018
|
Expected Life in Years
|
7.0
|
|
7.0
|
Volatility
|
30.2%
|
|
39.0%
|
Interest Rate
|
2.3%
|
|
3.1%
|
Yield Rate
|
1.0%
|
|
0.8%
|
Three Months Ended September 30, 2019 (in thousands)
|
Title
Insurance
|
|
All
Other
|
|
Intersegment
Eliminations
|
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
44,079
|
|
|
$
|
2,851
|
|
|
$
|
(1,684
|
)
|
|
$
|
45,246
|
|
Investment income
|
1,879
|
|
|
391
|
|
|
—
|
|
|
2,270
|
|
||||
Net realized gain on investments
|
346
|
|
|
77
|
|
|
—
|
|
|
423
|
|
||||
Total revenues
|
$
|
46,304
|
|
|
$
|
3,319
|
|
|
$
|
(1,684
|
)
|
|
$
|
47,939
|
|
Operating expenses
|
37,201
|
|
|
2,269
|
|
|
(1,550
|
)
|
|
37,920
|
|
||||
Income before income taxes
|
$
|
9,103
|
|
|
$
|
1,050
|
|
|
$
|
(134
|
)
|
|
$
|
10,019
|
|
Total assets
|
$
|
191,436
|
|
|
$
|
74,678
|
|
|
$
|
—
|
|
|
$
|
266,114
|
|
Three Months Ended September 30, 2018 (in thousands)
|
Title
Insurance |
|
All
Other |
|
Intersegment
Eliminations |
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
42,891
|
|
|
$
|
2,120
|
|
|
$
|
(1,825
|
)
|
|
$
|
43,186
|
|
Investment income
|
4,247
|
|
|
640
|
|
|
—
|
|
|
4,887
|
|
||||
Net realized gain on investments
|
141
|
|
|
47
|
|
|
—
|
|
|
188
|
|
||||
Total revenues
|
$
|
47,279
|
|
|
$
|
2,807
|
|
|
$
|
(1,825
|
)
|
|
$
|
48,261
|
|
Operating expenses
|
35,359
|
|
|
2,033
|
|
|
(1,691
|
)
|
|
35,701
|
|
||||
Income before income taxes
|
$
|
11,920
|
|
|
$
|
774
|
|
|
$
|
(134
|
)
|
|
$
|
12,560
|
|
Total assets
|
$
|
212,181
|
|
|
$
|
54,395
|
|
|
$
|
—
|
|
|
$
|
266,576
|
|
Nine Months Ended September 30, 2019 (in thousands)
|
Title
Insurance |
|
All
Other |
|
Intersegment
Eliminations |
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
113,999
|
|
|
$
|
8,373
|
|
|
$
|
(4,820
|
)
|
|
$
|
117,552
|
|
Investment income
|
9,780
|
|
|
2,087
|
|
|
—
|
|
|
11,867
|
|
||||
Net realized gain on investments
|
1,102
|
|
|
97
|
|
|
—
|
|
|
1,199
|
|
||||
Total revenues
|
$
|
124,881
|
|
|
$
|
10,557
|
|
|
$
|
(4,820
|
)
|
|
$
|
130,618
|
|
Operating expenses
|
102,792
|
|
|
6,991
|
|
|
(4,417
|
)
|
|
105,366
|
|
||||
Income before income taxes
|
$
|
22,089
|
|
|
$
|
3,566
|
|
|
$
|
(403
|
)
|
|
$
|
25,252
|
|
Total assets
|
$
|
191,436
|
|
|
$
|
74,678
|
|
|
$
|
—
|
|
|
$
|
266,114
|
|
Nine Months Ended September 30, 2018 (in thousands)
|
Title
Insurance |
|
All
Other |
|
Intersegment
Eliminations |
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
113,992
|
|
|
$
|
6,006
|
|
|
$
|
(4,940
|
)
|
|
$
|
115,058
|
|
Investment income
|
6,986
|
|
|
1,300
|
|
|
—
|
|
|
8,286
|
|
||||
Net realized gain on investments
|
548
|
|
|
81
|
|
|
—
|
|
|
629
|
|
||||
Total revenues
|
$
|
121,526
|
|
|
$
|
7,387
|
|
|
$
|
(4,940
|
)
|
|
$
|
123,973
|
|
Operating expenses
|
95,575
|
|
|
6,337
|
|
|
(4,538
|
)
|
|
97,374
|
|
||||
Income before income taxes
|
$
|
25,951
|
|
|
$
|
1,050
|
|
|
$
|
(402
|
)
|
|
$
|
26,599
|
|
Total assets
|
$
|
212,181
|
|
|
$
|
54,395
|
|
|
$
|
—
|
|
|
$
|
266,576
|
|
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||
Service cost – benefits earned during the year
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost on the projected benefit obligation
|
|
8
|
|
|
8
|
|
25
|
|
|
24
|
|
||||
Amortization of unrecognized losses
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
|
$
|
8
|
|
|
$
|
8
|
|
$
|
25
|
|
|
$
|
24
|
|
As of September 30, 2019 (in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value |
||||||||
Fixed maturity securities, available-for-sale, at fair value:
|
|
|
|
|
|
|
|
||||||||
Government obligations
|
$
|
1,008
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1,006
|
|
General obligations of U.S. states, territories and political subdivisions
|
19,946
|
|
|
859
|
|
|
—
|
|
|
20,805
|
|
||||
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
53,240
|
|
|
2,626
|
|
|
13
|
|
|
55,853
|
|
||||
Corporate debt securities
|
6,753
|
|
|
620
|
|
|
—
|
|
|
7,373
|
|
||||
Total
|
$
|
80,947
|
|
|
$
|
4,105
|
|
|
$
|
15
|
|
|
$
|
85,037
|
|
As of December 31, 2018 (in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
Fixed maturity securities, available-for-sale, at fair value:
|
|
|
|
|
|
|
|
||||||||
Government obligations
|
$
|
1,023
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
1,016
|
|
General obligations of U.S. states, territories and political subdivisions
|
19,518
|
|
|
229
|
|
|
143
|
|
|
19,604
|
|
||||
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
56,675
|
|
|
1,237
|
|
|
329
|
|
|
57,583
|
|
||||
Corporate debt securities
|
10,498
|
|
|
303
|
|
|
47
|
|
|
10,754
|
|
||||
Total
|
$
|
87,714
|
|
|
$
|
1,769
|
|
|
$
|
526
|
|
|
$
|
88,957
|
|
|
Available-for-Sale
|
||||||
(in thousands)
|
Amortized
Cost
|
|
Estimated Fair
Value |
||||
Due in one year or less
|
$
|
12,677
|
|
|
$
|
12,728
|
|
Due one year through five years
|
34,842
|
|
|
36,646
|
|
||
Due five years through ten years
|
32,505
|
|
|
34,274
|
|
||
Due after ten years
|
923
|
|
|
1,389
|
|
||
Total
|
$
|
80,947
|
|
|
$
|
85,037
|
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
As of September 30, 2019 (in thousands)
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value |
|
Unrealized
Losses
|
|
Estimated
Fair
Value |
|
Unrealized
Losses
|
||||||||||||
Government obligations
|
$
|
1,006
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,006
|
|
|
$
|
(2
|
)
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
2,160
|
|
|
(12
|
)
|
|
1,126
|
|
|
(1
|
)
|
|
3,286
|
|
|
(13
|
)
|
||||||
Total temporarily impaired securities
|
$
|
3,166
|
|
|
$
|
(14
|
)
|
|
$
|
1,126
|
|
|
$
|
(1
|
)
|
|
$
|
4,292
|
|
|
$
|
(15
|
)
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
As of December 31, 2018 (in thousands)
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value |
|
Unrealized
Losses
|
|
Estimated
Fair
Value |
|
Unrealized
Losses
|
||||||||||||
Government obligations
|
$
|
1,016
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,016
|
|
|
$
|
(7
|
)
|
General obligations of U.S. states, territories and political subdivisions
|
4,888
|
|
|
(32
|
)
|
|
6,469
|
|
|
(111
|
)
|
|
11,357
|
|
|
(143
|
)
|
||||||
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
12,326
|
|
|
(100
|
)
|
|
9,720
|
|
|
(229
|
)
|
|
22,046
|
|
|
(329
|
)
|
||||||
Corporate debt securities
|
4,490
|
|
|
(28
|
)
|
|
3,733
|
|
|
(19
|
)
|
|
8,223
|
|
|
(47
|
)
|
||||||
Total temporarily impaired securities
|
$
|
22,720
|
|
|
$
|
(167
|
)
|
|
$
|
19,922
|
|
|
$
|
(359
|
)
|
|
$
|
42,642
|
|
|
$
|
(526
|
)
|
As of September 30, 2019 (in thousands)
|
Cost
|
|
Estimated Fair
Value |
||||
Equity securities, at fair value:
|
|
|
|
|
|
||
Common stocks
|
$
|
32,332
|
|
|
$
|
55,785
|
|
Total
|
$
|
32,332
|
|
|
$
|
55,785
|
|
As of December 31, 2018 (in thousands)
|
Cost
|
|
Estimated Fair
Value |
||||
Equity securities, at fair value:
|
|
|
|
|
|
||
Common stocks
|
$
|
31,255
|
|
|
$
|
48,489
|
|
Total
|
$
|
31,255
|
|
|
$
|
48,489
|
|
(in thousands)
|
2019
|
|
2018
|
||||
Gross realized gains from securities:
|
|
|
|
|
|
||
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt securities
|
—
|
|
|
—
|
|
||
Common stocks
|
1,385
|
|
|
688
|
|
||
Total
|
$
|
1,385
|
|
|
$
|
688
|
|
Gross realized losses from securities:
|
|
|
|
|
|
||
General obligations of U.S. states, territories and political subdivisions
|
$
|
—
|
|
|
$
|
—
|
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
—
|
|
|
—
|
|
||
Common stocks
|
(188
|
)
|
|
(63
|
)
|
||
Other-than-temporary impairment of securities
|
—
|
|
|
—
|
|
||
Total
|
$
|
(188
|
)
|
|
$
|
(63
|
)
|
Net realized gains from securities
|
$
|
1,197
|
|
|
$
|
625
|
|
Net realized gains on other investments:
|
|
|
|
||||
Gains on other investments
|
$
|
2
|
|
|
$
|
4
|
|
Total
|
$
|
2
|
|
|
$
|
4
|
|
Net realized investment gains
|
$
|
1,199
|
|
|
$
|
629
|
|
(in thousands)
|
|
Balance Sheet Classification
|
|
Carrying Value
|
|
Estimated Fair Value
|
|
Maximum Potential Loss (a)
|
||||||
Tax credit LPs
|
|
Other investments
|
|
$
|
228
|
|
|
$
|
228
|
|
|
$
|
1,325
|
|
Real estate LLCs or LPs
|
|
Other investments
|
|
5,048
|
|
|
5,766
|
|
|
7,075
|
|
|||
Small business investment LPs
|
|
Other investments
|
|
5,296
|
|
|
5,090
|
|
|
8,955
|
|
|||
Total
|
|
|
|
$
|
10,572
|
|
|
$
|
11,084
|
|
|
$
|
17,355
|
|
(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, 2019 (in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligations of U.S. states, territories and political subdivisions*
|
$
|
—
|
|
|
$
|
77,664
|
|
|
$
|
—
|
|
|
$
|
77,664
|
|
Corporate debt securities*
|
—
|
|
|
7,373
|
|
|
—
|
|
|
7,373
|
|
||||
Total
|
$
|
—
|
|
|
$
|
85,037
|
|
|
$
|
—
|
|
|
$
|
85,037
|
|
As of December 31, 2018 (in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Obligations of U.S. states, territories and political subdivisions*
|
$
|
—
|
|
|
$
|
78,203
|
|
|
$
|
—
|
|
|
$
|
78,203
|
|
Corporate debt securities*
|
—
|
|
|
10,754
|
|
|
—
|
|
|
10,754
|
|
||||
Total
|
$
|
—
|
|
|
$
|
88,957
|
|
|
$
|
—
|
|
|
$
|
88,957
|
|
As of September 30, 2019 (in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
43,992
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,992
|
|
Accrued interest and dividends
|
1,161
|
|
|
—
|
|
|
—
|
|
|
1,161
|
|
||||
Equity securities, at fair value:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
55,785
|
|
|
—
|
|
|
—
|
|
|
55,785
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|||||||
Commercial paper and money market funds
|
21,714
|
|
|
—
|
|
|
—
|
|
|
21,714
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
||||||||
Equity investments in unconsolidated affiliates, equity method
|
—
|
|
|
—
|
|
|
5,629
|
|
|
5,629
|
|
||||
Equity investments in unconsolidated affiliates, measurement alternative
|
—
|
|
|
—
|
|
|
7,060
|
|
|
7,060
|
|
||||
Total
|
$
|
122,652
|
|
|
$
|
—
|
|
|
$
|
12,689
|
|
|
$
|
135,341
|
|
As of December 31, 2018 (in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
18,694
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,694
|
|
Accrued interest and dividends
|
946
|
|
|
—
|
|
|
—
|
|
|
946
|
|
||||
Equity securities, at fair value:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
48,489
|
|
|
—
|
|
|
—
|
|
|
48,489
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Commercial paper and money market funds
|
32,787
|
|
|
—
|
|
|
—
|
|
|
32,787
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
||||||||
Equity investments in unconsolidated affiliates, equity method
|
—
|
|
|
—
|
|
|
5,847
|
|
|
5,847
|
|
||||
Equity investments in unconsolidated affiliates, measurement alternative
|
—
|
|
|
—
|
|
|
6,589
|
|
|
6,589
|
|
||||
Total
|
$
|
100,916
|
|
|
$
|
—
|
|
|
$
|
12,436
|
|
|
$
|
113,352
|
|
(in thousands)
|
Balance,
January 1, 2019
|
|
Amounts Impaired
|
|
Observable Changes
|
|
Purchases and
Additional
Commitments
Paid
|
|
Sales, Returns of Capital and Other Reductions
|
|
Balance,
September 30, 2019
|
||||||||||||
Other investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity investments in unconsolidated affiliates, measurement alternative
|
$
|
6,589
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,306
|
|
|
$
|
(835
|
)
|
|
$
|
7,060
|
|
Total
|
$
|
6,589
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,306
|
|
|
$
|
(835
|
)
|
|
$
|
7,060
|
|
(in thousands)
|
Balance,
January 1, 2018
|
|
Amounts Impaired
|
|
Observable Changes
|
|
Purchases and
Additional
Commitments
Paid
|
|
Sales, Returns of Capital and Other Reductions
|
|
Balance,
December 31, 2018
|
||||||||||||
Other investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity investments in unconsolidated affiliates, measurement alternative
|
$
|
5,439
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,486
|
|
|
$
|
(336
|
)
|
|
$
|
6,589
|
|
Total
|
$
|
5,439
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,486
|
|
|
$
|
(336
|
)
|
|
$
|
6,589
|
|
Financial Statement Classification,
Consolidated Balance Sheets
(in thousands)
|
As of
September 30, 2019 |
As of
December 31, 2018 |
||||
Other investments
|
$
|
5,630
|
|
$
|
5,847
|
|
Premium and fees receivable
|
$
|
614
|
|
$
|
409
|
|
Financial Statement Classification,
Consolidated Statements of Income
(in thousands)
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||
2019
|
2018
|
2019
|
2018
|
||||||||||
Net premiums written
|
$
|
4,626
|
|
$
|
4,148
|
|
$
|
11,674
|
|
$
|
10,967
|
|
|
Non-title services and other investment income
|
$
|
779
|
|
$
|
724
|
|
$
|
1,866
|
|
$
|
1,859
|
|
|
Commissions to agents
|
$
|
3,056
|
|
$
|
2,662
|
|
$
|
7,702
|
|
$
|
7,192
|
|
(in thousands)
|
As of
September 30, 2019 |
As of
December 31, 2018 |
||||
Referral relationships
|
$
|
6,416
|
|
$
|
6,416
|
|
Non-compete agreements
|
1,406
|
|
1,406
|
|
||
Tradename
|
560
|
|
560
|
|
||
Total
|
8,382
|
|
8,382
|
|
||
Accumulated amortization
|
(2,330
|
)
|
(1,952
|
)
|
||
Identifiable intangible assets, net
|
$
|
6,052
|
|
$
|
6,430
|
|
Three Months Ended
September 30, 2019 (in thousands) |
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at July 1
|
$
|
2,886
|
|
|
$
|
(32
|
)
|
|
$
|
2,854
|
|
Other comprehensive income before reclassifications
|
341
|
|
|
—
|
|
|
341
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net current-period other comprehensive income
|
341
|
|
|
—
|
|
|
341
|
|
|||
Ending balance
|
$
|
3,227
|
|
|
$
|
(32
|
)
|
|
$
|
3,195
|
|
Three Months Ended
September 30, 2018 (in thousands) |
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at July 1
|
$
|
875
|
|
|
$
|
(69
|
)
|
|
$
|
806
|
|
Other comprehensive loss before reclassifications
|
(487
|
)
|
|
—
|
|
|
(487
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net current-period other comprehensive loss
|
(487
|
)
|
|
—
|
|
|
(487
|
)
|
|||
Ending balance
|
$
|
388
|
|
|
$
|
(69
|
)
|
|
$
|
319
|
|
Nine Months Ended
September 30, 2019 (in thousands) |
Unrealized Gains and Losses
On Available-for-Sale Securities |
|
Postretirement
Benefits Plans |
|
Total
|
||||||
Beginning balance at January 1
|
$
|
981
|
|
|
$
|
(32
|
)
|
|
$
|
949
|
|
Other comprehensive income before reclassifications
|
2,246
|
|
|
—
|
|
|
2,246
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net current-period other comprehensive income
|
2,246
|
|
|
—
|
|
|
2,246
|
|
|||
Ending balance
|
$
|
3,227
|
|
|
$
|
(32
|
)
|
|
$
|
3,195
|
|
Nine Months Ended
September 30, 2018 (in thousands) |
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at January 1
|
$
|
16,003
|
|
|
$
|
(58
|
)
|
|
$
|
15,945
|
|
Cumulative effect adjustment for adoption of new accounting standards
|
(13,616
|
)
|
|
(11
|
)
|
|
(13,627
|
)
|
|||
Other comprehensive loss before reclassifications
|
(1,999
|
)
|
|
—
|
|
|
(1,999
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net current-period other comprehensive loss
|
(1,999
|
)
|
|
—
|
|
|
(1,999
|
)
|
|||
Ending balance
|
$
|
388
|
|
|
$
|
(69
|
)
|
|
$
|
319
|
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||
(in thousands)
|
2019
|
2018
|
2019
|
2018
|
||||||||
Revenue from contracts with customers:
|
|
|
|
|
||||||||
Escrow and other title-related fees
|
$
|
2,393
|
|
$
|
1,812
|
|
$
|
5,616
|
|
$
|
5,465
|
|
Non-title services
|
2,539
|
|
1,795
|
|
7,444
|
|
5,083
|
|
||||
Total revenue from contracts with customers
|
4,932
|
|
3,607
|
|
13,060
|
|
10,548
|
|
||||
Other sources of revenue:
|
|
|
|
|
||||||||
Net premiums written
|
40,169
|
|
39,422
|
|
103,942
|
|
104,123
|
|
||||
Investment-related revenue
|
2,693
|
|
5,075
|
|
13,066
|
|
8,915
|
|
||||
Other
|
145
|
|
157
|
|
550
|
|
387
|
|
||||
Total revenues
|
$
|
47,939
|
|
$
|
48,261
|
|
$
|
130,618
|
|
$
|
123,973
|
|
(in thousands)
|
Three Months Ended
September 30, 2019 |
Nine Months Ended
September 30, 2019 |
||||
Operating leases
|
$
|
312
|
|
$
|
944
|
|
Short-term leases (b)
|
30
|
|
103
|
|
||
Lease expense
|
$
|
342
|
|
$
|
1,047
|
|
Sub-lease income
|
—
|
|
—
|
|
||
Lease cost
|
$
|
342
|
|
$
|
1,047
|
|
(b)
|
|
Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheets.
|
(in thousands)
|
As of
September 30, 2019 |
||
Current:
|
|
||
Operating lease liabilities
|
$
|
1,045
|
|
Non-current:
|
|
||
Operating lease liabilities
|
3,577
|
|
|
Total operating lease liabilities
|
$
|
4,622
|
|
Year Ended (in thousands)
|
|
||
2019
|
$
|
308
|
|
2020
|
1,208
|
|
|
2021
|
1,122
|
|
|
2022
|
893
|
|
|
2023
|
585
|
|
|
Thereafter
|
1,029
|
|
|
Total undiscounted payments
|
$
|
5,145
|
|
Less: present value adjustment
|
(523
|
)
|
|
Operating lease liabilities
|
$
|
4,622
|
|
As of September 30, 2019
|
|
|
Weighted average remaining lease term (years)
|
5.09
|
|
Weighted average discount rate
|
4.2
|
%
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums written
|
|
$
|
40,169
|
|
|
$
|
39,422
|
|
|
$
|
103,942
|
|
|
$
|
104,123
|
|
Escrow and other title-related fees
|
|
2,393
|
|
|
1,812
|
|
|
5,616
|
|
|
5,465
|
|
||||
Non-title services
|
|
2,539
|
|
|
1,795
|
|
|
7,444
|
|
|
5,083
|
|
||||
Interest and dividends
|
|
1,156
|
|
|
1,138
|
|
|
3,605
|
|
|
3,381
|
|
||||
Other investment income
|
|
708
|
|
|
829
|
|
|
2,044
|
|
|
2,279
|
|
||||
Net realized investment gains
|
|
423
|
|
|
188
|
|
|
1,199
|
|
|
629
|
|
||||
Changes in the estimated fair value of equity security investments
|
|
406
|
|
|
2,920
|
|
|
6,218
|
|
|
2,626
|
|
||||
Other
|
|
145
|
|
|
157
|
|
|
550
|
|
|
387
|
|
||||
Total Revenues
|
|
47,939
|
|
|
48,261
|
|
|
130,618
|
|
|
123,973
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Commissions to agents
|
|
19,928
|
|
|
18,490
|
|
|
51,261
|
|
|
48,942
|
|
||||
Provision for claims
|
|
987
|
|
|
997
|
|
|
3,610
|
|
|
155
|
|
||||
Personnel expenses
|
|
11,576
|
|
|
11,096
|
|
|
34,871
|
|
|
33,234
|
|
||||
Office and technology expenses
|
|
2,350
|
|
|
2,208
|
|
|
6,803
|
|
|
6,603
|
|
||||
Other expenses
|
|
3,079
|
|
|
2,910
|
|
|
8,821
|
|
|
8,440
|
|
||||
Total Operating Expenses
|
|
37,920
|
|
|
35,701
|
|
|
105,366
|
|
|
97,374
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before Income Taxes
|
|
10,019
|
|
|
12,560
|
|
|
25,252
|
|
|
26,599
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Provision for Income Taxes
|
|
2,067
|
|
|
1,927
|
|
|
5,174
|
|
|
4,873
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net Income Attributable to the Company
|
|
$
|
7,952
|
|
|
$
|
10,634
|
|
|
$
|
20,078
|
|
|
$
|
21,757
|
|
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||||
(in thousands, except percentages)
|
|
2019
|
|
%
|
|
2018
|
|
%
|
2019
|
|
%
|
|
2018
|
|
%
|
||||||||
Home and Branch
|
|
$
|
11,557
|
|
|
28.8
|
|
$
|
11,905
|
|
|
30.2
|
$
|
29,111
|
|
|
28.0
|
|
$
|
31,258
|
|
|
30.0
|
Agency
|
|
28,612
|
|
|
71.2
|
|
27,517
|
|
|
69.8
|
74,831
|
|
|
72.0
|
|
72,865
|
|
|
70.0
|
||||
Total
|
|
$
|
40,169
|
|
|
100.0
|
|
$
|
39,422
|
|
|
100.0
|
$
|
103,942
|
|
|
100.0
|
|
$
|
104,123
|
|
|
100.0
|
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||
State (in thousands)
|
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||
North Carolina
|
|
$
|
16,129
|
|
|
$
|
16,335
|
|
$
|
40,790
|
|
|
$
|
42,533
|
|
Texas
|
|
7,579
|
|
|
7,048
|
|
19,929
|
|
|
18,762
|
|
||||
Georgia
|
|
4,535
|
|
|
4,286
|
|
11,306
|
|
|
10,326
|
|
||||
South Carolina
|
|
3,212
|
|
|
3,785
|
|
9,551
|
|
|
10,770
|
|
||||
Virginia
|
|
1,686
|
|
|
1,457
|
|
4,316
|
|
|
4,347
|
|
||||
All Others
|
|
7,113
|
|
|
6,589
|
|
18,385
|
|
|
17,633
|
|
||||
Premiums Written
|
|
40,254
|
|
|
39,500
|
|
104,277
|
|
|
104,371
|
|
||||
Reinsurance Assumed
|
|
—
|
|
|
2
|
|
—
|
|
|
4
|
|
||||
Reinsurance Ceded
|
|
(85
|
)
|
|
(80
|
)
|
(335
|
)
|
|
(252
|
)
|
||||
Net Premiums Written
|
|
$
|
40,169
|
|
|
$
|
39,422
|
|
$
|
103,942
|
|
|
$
|
104,123
|
|
•
|
changes in interest rates and real estate values;
|
•
|
changes in general economic, business, and political conditions, including the performance of the financial and real estate markets;
|
•
|
potential reform of government sponsored entities;
|
•
|
the level of real estate transaction volumes, the level of mortgage origination volumes (including refinancing), the mix of title insurance between markets with varying real estate values, 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;
|
•
|
the possible inadequacy of the provision for claims to cover actual claim losses;
|
•
|
the incidence of fraud-related losses;
|
•
|
unanticipated adverse changes in securities markets 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 the North Carolina, Texas and Georgia 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 compliance of the Company's service providers, including the application of financial regulation designed to protect consumers;
|
•
|
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 desire 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;
|
•
|
unfavorable economic or other conditions could cause the Company to record impairment charges for all or a portion of its goodwill and other intangible assets;
|
•
|
policies and procedures for the mitigation of risks 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.
|
(a)
|
None
|
(b)
|
None
|
(c)
|
The following table provides information about purchases by the Company (and all affiliated purchasers), during the quarter ended September 30, 2019, of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act:
|
|
Issuer Purchases of Equity Securities (unrounded)
|
|
|
|||||||||
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
|
|
|
|
|
|
|
428,229
|
|
||||
July 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
428,229
|
|
August 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
428,229
|
|
|
September 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
428,229
|
|
|
Total
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
428,229
|
|
31(i)
|
|
|
|
31(ii)
|
|
|
|
32
|
|
|
|
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, Treasurer, Chief
|
|
|
Financial Officer, Chief Accounting Officer and
|
|
|
Director (Principal Financial Officer and
|
|
|
Principal Accounting Officer)
|
1 Year Investors Title Chart |
1 Month Investors Title Chart |
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