UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

		February 11, 2020
	Date of Report (Date of earliest event reported)
		Investors Title Company
	(Exact name of registrant as specified in its charter)
North Carolina			0-11774		56-1110199
(State or Other Jurisdiction of			(Commission		(I.R.S. Employer
Incorporation or Organization)			File Number)		Identification No.)
121 North Columbia Street
Chapel Hill,	North Carolina				27514
(Address of Principal Executive Offices)					(Zip Code)
		(919)		968-2200
	(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

Attached as Exhibit 99.1 and incorporated herein by reference is a copy of the press release of Investors Title Company, dated February 11, 2020, reporting Investors Title Company's financial results for the fiscal quarter ended December 31, 2019.

The information in this Current Report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits. The following exhibit accompanies this Report:

Exhibit 99.1 - Press Release of Investors Title Company dated February 11, 2020.

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		INVESTORS TITLE COMPANY
Date:	February 11, 2020	By:	/s/ James A. Fine, Jr.
			James A. Fine, Jr.
			President, Principal Financial Officer and
			Principal Accounting Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release issued by Investors Title Company on February 11, 2020

Exhibit 99.1

Investors Title Company Announces Record Fourth Quarter and Fiscal Year 2019 Results

CHAPEL HILL, N.C.--(BUSINESS WIRE)--February 11, 2020--Investors Title Company today announced results for the fourth quarter and year ended December 31, 2019.

For the year, net income attributable to the Company increased 43.7% to a record $31.5 million, or $16.59 per diluted share, versus $21.9 million, or $11.54 per diluted share, in the prior year. For the quarter, net income attributable to the Company increased to a record $11.4 million, or $6.00 per diluted share, versus $135,000, or $0.07 per diluted share, in the prior year period.

Revenues for the year increased 17.4% to a record $183.5 million, compared with $156.3 million in the prior year. Revenues benefitted from a $10.3 million increase in the fair value of equity security investments, compared to a $4.1 million decrease in the fair value of equity security investments in the prior year. In addition, net premiums written increased 5.6% to $145.8 million, a new record. The increase in premiums stemmed from a favorable interest rate environment, continued increases in home prices and a high level of home sales activity. Finally, revenues from non-title services increased $2.8 million due mainly to growth in our like-kind property exchange business.

Operating expenses increased 11.2% to $143.7 million, compared with $129.2 million in the prior year. Higher premium levels drove an increase in agent commissions. Personnel expenses increased due to normal inflationary increases in salaries and benefits, growth in staffing levels associated with higher activity levels and targeted investments in key areas of our business, and continued support of multi-year technology initiatives. The claims provision was higher due to less favorable loss development and higher incurred claims in the current period.

Income before income taxes increased to $14.6 million and $39.8 million for the quarter and year ended December 31, 2019, versus $470,000 and $27.1 million in the prior year periods, respectively. Excluding the impact of changes in the fair value of equity security investments, income before income taxes (non-GAAP) increased $3.3 million in the current quarter and decreased $1.7 million in the current year compared with the same periods in the prior year (see Appendix A for a reconciliation of GAAP to non-GAAP measures used in this press release.)

Chairman J. Allen Fine commented, “We are pleased to report another year of strong performance for the Company. For both the quarter and the year, the Company set new records for revenues, premiums, and earnings. A strong economy led to another year of increases in the level of home sales and average real estate values, while historically low interest rates drove a sharp increase in the level of refinance activity.

Even though claims expense increased, we continued to experience a low level of overall claims activity. We believe this is the result of market factors driving foreclosure rates to pre-recession levels, as well as our own efforts to improve the risk profile of our Company and our business partners.

As we head into the new year, we are optimistic that the strength in the economy will result in conditions favorable for continued strength in the real estate market. Regardless of market conditions, however, we remain focused on enhancing our competitive strengths, profitably expanding our market presence, and strengthening our financial position.”

Investors Title Company’s subsidiaries issue and underwrite title insurance policies. The Company also provides investment management services and services in connection with tax-deferred exchanges of like-kind property.

Certain statements contained herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, among others, any statements regarding the Company’s expected performance for this year, future home price fluctuations, changes in home purchase or refinance activity and the mix thereof, interest rate changes, expansion of the Company’s market presence, enhancing competitive strengths, positive development in housing affordability, wages, unemployment or overall economic conditions or statements regarding our actuarial assumptions and the application of recent historical claims experience to future periods. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from anticipated and historical results. Such risks and uncertainties include, without limitation: the cyclical demand for title insurance due to changes in the residential and commercial real estate markets; the occurrence of fraud, defalcation or misconduct; variances between actual claims experience and underwriting and reserving assumptions, including the limited predictive power of historical claims experience; declines in the performance of the Company’s investments; government regulation; changes in the economy; loss of agency relationships, or significant reductions in agent-originated business; difficulties managing growth, whether organic or through acquisitions and other considerations set forth under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission, and in subsequent filings.

Investors Title Company and Subsidiaries<br><br> <br>Consolidated Statements of Income<br><br> <br>For the Three and Twelve Months Ended December 31, 2019 and 2018<br><br> <br>(in thousands, except per share amounts)<br><br> <br>(unaudited)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2019			2018			2019		2018
Revenues:
Net premiums written	$	41,900		$	34,002		$	145,842	$	138,125
Escrow and other title-related fees	1,858			1,631			7,474		7,096
Non-title services	2,478			1,999			9,922		7,082
Interest and dividends	1,147			1,238			4,752		4,619
Other investment income	1,147			828			3,191		3,107
Net realized investment gains (losses)	141			(739		)	1,340		(110		)
Changes in the estimated fair value of equity security investments	4,085			(6,756		)	10,303		(4,130		)
Other	128			83			678		470
Total Revenues	52,884			32,286			183,502		156,259
Operating Expenses:
Commissions to agents	21,519			16,833			72,780		65,775
(Benefit) Provision for claims	(78		)	(487		)	3,532		(332		)
Personnel expenses	11,187			10,318			46,058		43,552
Office and technology expenses	2,451			2,210			9,254		8,813
Other expenses	3,234			2,942			12,055		11,382
Total Operating Expenses	38,313			31,816			143,679		129,190
Income before Income Taxes	14,571			470			39,823		27,069
Provision for Income Taxes	3,191			337			8,365		5,210
Net Income	11,380			133			31,458		21,859
Net Loss Attributable to Noncontrolling Interests	—			2			—		33
Net Income Attributable to the Company	$	11,380		$	135		$	31,458	$	21,892
Basic Earnings per Common Share	$	6.03		$	0.07		$	16.66	$	11.60
Weighted Average Shares Outstanding – Basic	1,889			1,887			1,888		1,887
Diluted Earnings per Common Share	$	6.00		$	0.07		$	16.59	$	11.54
Weighted Average Shares Outstanding – Diluted	1,896			1,896			1,896		1,897

Investors Title Company and Subsidiaries<br><br> <br>Consolidated Balance Sheets<br><br> <br>As of December 31, 2019 and 2018<br><br> <br>(in thousands)<br><br> <br>(unaudited)
	December 31, 2019		December 31, <br><br> 2018
Assets
Cash and cash equivalents	$	25,949	$	18,694
Investments:
Fixed maturity securities, available-for-sale, at fair value	104,638		88,957
Equity securities, at fair value	61,108		48,489
Short-term investments	13,134		32,787
Other investments	13,982		12,436
Total investments	192,862		182,669
Premiums and fees receivable	12,523		12,128
Accrued interest and dividends	1,033		946
Prepaid expenses and other receivables	5,519		7,288
Property, net	9,776		10,304
Goodwill and other intangible assets, net	10,275		10,780
Operating lease right-of-use assets	4,469		—
Other assets	1,487		1,459
Total Assets	$	263,893	$	244,268
Liabilities and Stockholders’ Equity
Liabilities:
Reserve for claims	$	31,333	$	31,729
Accounts payable and accrued liabilities	28,318		27,735
Operating lease liabilities	4,502		—
Current income taxes payable	1,340		4,981
Deferred income taxes, net	7,038		4,184
Total liabilities	72,531		68,629
Stockholders’ Equity:
Common stock – no par value (10,000 authorized shares; 1,889 and 1,887 shares issued and outstanding as of December 31, 2019 and 2018, respectively, excluding in each period<br> 292 shares of common stock held by the Company's subsidiary)	—		—
Retained earnings	188,262		174,690
Accumulated other comprehensive income	3,100		949
Total stockholders’ equity	191,362		175,639
Total Liabilities and Stockholders’ Equity	$	263,893	$	244,268

Investors Title Company and Subsidiaries<br><br> <br>Net Premiums Written By Branch and Agency<br><br> <br>For the Three and Twelve Months Ended December 31, 2019 and 2018<br><br> <br>(in thousands)<br><br> <br>(unaudited)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2019		%	2018		%	2019		%	2018		%
Branch	$	11,527	27.5	$	10,047	29.5	$	40,638	27.9	$	41,305	29.9
Agency	30,373		72.5	23,955		70.5	105,204		72.1	96,820		70.1
Total	$	41,900	100.0	$	34,002	100.0	$	145,842	100.0	$	138,125	100.0

Investors Title Company and Subsidiaries Appendix A Non-GAAP Measures Reconciliation For the Three and Twelve Months Ended December 31, 2019 and 2018 (in thousands) (unaudited)

Management uses various financial and operational measurements, including financial information not prepared in accordance with generally accepted accounting principles ("GAAP"), to analyze Company performance. This includes adjusting revenues to remove the impact of changes in the estimated fair value of equity security investments, which are recognized in net income under GAAP. Management believes that these measures are useful to evaluate the Company's internal operational performance from period to period because they eliminate the effects of external market fluctuations. The Company also believes users of the financial results would benefit from having access to such information, and that certain of the Company’s peers make available similar information. This information should not be used as a substitute for, or considered superior to, measures of financial performance prepared in accordance with GAAP, and may be different from similarly titled non-GAAP financial measures used by other companies.

The following tables reconcile non-GAAP financial measurements used by Company management to the comparable measurements using GAAP:

	Three Months Ended December 31,					Twelve Months Ended December 31,
	2019			2018		2019			2018
Revenues
Total revenues (GAAP)	$	52,884		$	32,286	$	183,502		$	156,259
Subtract: Changes in the estimated fair value of equity security investments	(4,085		)	6,756		(10,303		)	4,130
Adjusted revenues (non-GAAP)	$	48,799		$	39,042	$	173,199		$	160,389
Income before Income Taxes
Income before income taxes (GAAP)	$	14,571		$	470	$	39,823		$	27,069
Subtract: Changes in the estimated fair value of equity security investments	(4,085		)	6,756		(10,303		)	4,130
Adjusted income before income taxes (non-GAAP)	$	10,486		$	7,226	$	29,520		$	31,199

Contacts

Elizabeth B. Lewter

              \(919\) 968-2200