Investors Title Co 8-K, filed Feb 14, 2022
Investors Title Co (ITIC)
8-K
2022-02-14
For: 2022-02-14
View Original
Added on
April 07, 2026
About this 8-K
Investors Title Co filed this 8-K on February 14, 2022.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
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
Date of report (Date of earliest event reported): February 14, 2022
(Exact Name of Registrant as Specified in Charter)
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(State or Other Jurisdiction
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(Commission File Number)
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(IRS Employer Identification No.)
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of Incorporation)
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(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code: (919 ) 968-2200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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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 14, 2022, reporting Investors Title Company's financial results for the fiscal quarter ended December 31, 2021.
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 14, 2022
Exhibit 104 - Cover Page Interactive Data File (embedded within the Inline XBRL document)
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.
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INVESTORS TITLE COMPANY
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Date: February 14, 2022
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By:
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/s/ James A. Fine, Jr.
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James A. Fine, Jr.
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President, Principal Financial Officer and
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Principal Accounting Officer
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EXHIBIT INDEX
Exhibit No. Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
Exhibit 99.1
INVESTORS TITLE COMPANY ANNOUNCES
FOURTH QUARTER AND FISCAL YEAR 2021 RESULTS
Contact: Elizabeth B. Lewter
February 14, 2022
Telephone: (919) 968-2200
Nasdaq Symbol: ITIC
FOR IMMEDIATE RELEASE:
Chapel Hill, NC – Investors Title Company today announced results for the fourth quarter and year ended December 31, 2021. The Company set
all-time quarterly and annual records for total revenues and net premiums written, in addition to setting an all-time annual record for net income.
For the quarter, net income increased 13.7% to $18.9 million, or $9.94 per diluted share, versus $16.6 million, or $8.77 per diluted share,
in the prior year period. For the year, net income increased 70.0% to $67.0 million, or $35.28 per diluted share, versus $39.4 million, or $20.80 per diluted share, in the prior year.
Revenues for the quarter increased 18.0% to $91.0 million, compared to $77.1 million in the prior year period. Net premiums written
increased 16.8% to $72.5 million, driven mainly by higher average home prices and continued low mortgage interest rates. Escrow and other title-related fees increased 53.0%, primarily due to increases in commission income and title ancillary
services. Revenues from non-title services increased 23.4%, mainly due to increases in income from like-kind exchanges, trust management fees and agency income. Other investment income increased $823,000 due to earnings from partnership
investments. Changes in the estimated fair value of equity security investments resulted in a benefit to revenues of $7.7 million, a slight decrease compared with the prior year quarter, as market values continued to increase.
Operating expenses increased 20.5%, mainly due to a 20.6% increase in commissions to agents commensurate with the increase in agent premium
volume. Personnel expenses were 9.0% higher than the prior year due primarily to staffing additions in support of strategic growth initiatives and volume increases. Higher premium volumes, increases in travel-related expenses and ongoing
technology initiatives drove the increases in office and technology expenses and other operating expenses. Slightly offsetting these increases was a relatively low level of claims activity experienced on policies written in recent years.
Income before income taxes increased 11.6% to $23.9 million for the current quarter versus $21.4 million in the prior year period.
Excluding the impact of changes in the estimated fair value of equity security investments, adjusted income before income taxes (non-GAAP) increased 18.9% to $16.2 million versus $13.6 million for the prior year period (see Appendix A for a
reconciliation of this non-GAAP measure to the most directly comparable GAAP measure).
For the year, revenues increased 39.4% to $329.5 million compared with $236.4 million for the prior year. Aside from changes in the
estimated fair value of equity security investments and other income, overall results for the year were shaped predominantly by the same factors that affected the fourth quarter. Changes in the estimated fair value of equity security investments
increased $10.0 million compared with the prior year, as U.S. stock markets recorded a third straight year of growth in 2021. Other income increased $4.1 million mainly due to a gain on the sale of property. Income before income taxes increased
71.0% to $84.9 million compared with $49.7 million in the prior year. Excluding the impact of changes in the estimated fair value of investments in equity securities, adjusted income before income taxes (non-GAAP) increased 56.4% to $70.0 million
versus $44.8 million for the prior year (see Appendix A for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure).
Chairman J. Allen Fine commented, “We are pleased to report another year of exceptionally strong performance. For both the quarter and the
year, the Company set all-time records for revenues and premiums, in addition to an annual record for earnings. As the country grapples with the ongoing pandemic for the second year, we continued to see strong demand for housing as well as record
growth in real estate values in our operating markets during 2021. Although refinance activity has slowed recently in light of an uptick in mortgage interest rates relative to most of 2021, the level of refinance activity actually surpassed 2020’s
record activity levels. As we turn our focus to 2022, we will remain focused on enhancing our competitive strengths and profitably expanding our market presence.”
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.
Cautionary Statements Regarding Forward-Looking Statements
Certain statements contained herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
statements may be identified by the use of words such as “plan,” expect,” “aim,” “believe,” “project,” “anticipate,” “intend,” “estimate,” “should,” “could,” “would,” and other expressions that indicate future events and trends. Such statements
include, among others, any statements regarding the Company’s expected performance for this year, projections regarding U.S. recovery from the COVID-19 pandemic, future home price fluctuations, changes in home purchase or refinance demand 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 severity and duration of the COVID-19 pandemic (including any of its variants) and its effects (and the effects of measures undertaken to combat it) on the economy and the
Company’s business; 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 regulations; changes in the economy; changes resulting from President Biden’s
administration and Congress; 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, 2020 as filed with the Securities and Exchange Commission, and in subsequent filings.
# # # #
Investors Title Company and Subsidiaries
Consolidated Statements of Operations
For the Three and Twelve Months Ended December 31, 2021 and 2020
(in thousands, except per share amounts)
(unaudited)
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Three Months Ended
December 31,
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Twelve Months Ended
December 31,
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2021
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2020
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2021
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2020
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Revenues:
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Net premiums written
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$
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72,536
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$
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62,107
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$
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273,885
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$
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205,418
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Escrow and other title-related fees
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3,530
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2,307
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13,678
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8,321
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Non-title services
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2,735
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2,217
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9,667
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8,693
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Interest and dividends
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966
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1,051
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3,773
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4,393
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Other investment income
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2,310
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1,487
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6,920
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3,723
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Net realized investment gains
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1,098
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6
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1,869
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333
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Changes in the estimated fair value of equity security investments
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7,668
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7,771
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14,934
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4,904
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Other
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200
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180
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4,772
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623
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Total Revenues
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91,043
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77,126
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329,498
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236,408
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Operating Expenses:
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Commissions to agents
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40,357
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33,463
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142,815
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106,807
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Provision for claims
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666
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752
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5,686
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5,204
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Personnel expenses
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16,669
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15,297
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64,193
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51,929
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Office and technology expenses
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3,931
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2,623
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13,059
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9,951
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Other expenses
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5,528
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3,580
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18,813
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12,856
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Total Operating Expenses
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67,151
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55,715
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244,566
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186,747
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Income before Income Taxes
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23,892
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21,411
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84,932
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49,661
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Provision for Income Taxes
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4,980
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4,776
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17,912
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10,241
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Net Income
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$
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18,912
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$
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16,635
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$
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67,020
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$
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39,420
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Basic Earnings per Common Share
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$
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9.98
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$
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8.79
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$
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35.38
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$
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20.84
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Weighted Average Shares Outstanding – Basic
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1,895
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1,892
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1,894
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1,892
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Diluted Earnings per Common Share
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$
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9.94
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$
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8.77
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$
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35.28
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$
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20.80
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Weighted Average Shares Outstanding – Diluted
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1,903
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1,897
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1,900
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1,896
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Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2021 and 2020
(in thousands)
(unaudited)
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December 31,
2021 |
December 31,
2020 |
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Assets
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Cash and cash equivalents
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$
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37,168
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$
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13,723
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Investments:
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Fixed maturity securities, available-for-sale, at fair value
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79,791
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117,713
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Equity securities, at fair value
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76,853
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64,919
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Short-term investments
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45,930
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15,170
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Other investments
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20,298
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15,493
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Total investments
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222,872
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213,295
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Premiums and fees receivable
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22,953
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19,427
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Accrued interest and dividends
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817
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1,038
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Prepaid expenses and other receivables
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11,721
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9,418
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Property, net
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13,033
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11,160
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Goodwill and other intangible assets, net
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15,951
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9,771
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Operating lease right-of-use assets
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5,202
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3,533
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Other assets
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1,771
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1,560
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Total Assets
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$
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331,488
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$
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282,925
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Liabilities and Stockholders’ Equity
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Liabilities:
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Reserve for claims
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$
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36,754
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$
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33,584
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Accounts payable and accrued liabilities
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43,868
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36,020
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Operating lease liabilities
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5,329
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3,669
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Current income taxes payable
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3,329
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638
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Deferred income taxes, net
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13,121
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8,592
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Total liabilities
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102,401
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82,503
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Stockholders’ Equity:
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Common stock – no par value (10,000
authorized shares; 1,895 and 1,892 shares issued and outstanding as of December 31, 2021 and 2020, respectively, excluding in each period 292 shares of common stock held by the Company's subsidiary)
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—
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—
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Retained earnings
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225,861
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196,096
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Accumulated other comprehensive income
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3,226
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4,326
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Total stockholders’ equity
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229,087
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200,422
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Total Liabilities and Stockholders’ Equity
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$
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331,488
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$
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282,925
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Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
For the Three and Twelve Months Ended December 31, 2021 and 2020
(in thousands)
(unaudited)
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Three Months Ended December 31,
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Twelve Months Ended December 31,
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2021
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%
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2020
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%
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2021
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%
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2020
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%
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Branch
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$
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15,681
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21.6
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$
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14,840
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23.9
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$
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68,585
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25.0
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$
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53,204
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25.9
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Agency
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56,855
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78.4
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47,267
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76.1
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205,300
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75.0
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152,214
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74.1
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Total
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$
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72,536
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100.0
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$
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62,107
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100.0
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$
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273,885
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100.0
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$
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205,418
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100.0
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Investors Title Company and Subsidiaries
Appendix A
Non-GAAP Measures Reconciliation
For the Three and Twelve Months Ended December 31, 2021 and 2020
(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:
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Three Months Ended
December 31, |
Twelve Months Ended
December 31, |
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2021
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2020
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2021
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2020
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Revenues
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Total revenues (GAAP)
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$
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91,043
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$
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77,126
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$
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329,498
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$
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236,408
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Subtract: Changes in the estimated fair value of equity security investments
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(7,668
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)
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(7,771
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(14,934
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)
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(4,904
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)
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Adjusted revenues (non-GAAP)
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$
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83,375
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$
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69,355
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$
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314,564
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$
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231,504
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Income before Income Taxes
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Income before income taxes (GAAP)
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$
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23,892
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$
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21,411
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$
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84,932
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$
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49,661
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Subtract: Changes in the estimated fair value of equity security investments
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(7,668
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)
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(7,771
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(14,934
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)
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(4,904
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)
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Adjusted income before income taxes (non-GAAP)
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$
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16,224
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$
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13,640
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$
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69,998
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$
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44,757
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