ITIC 8-K
Investors Title Co (ITIC)
8-K
2022-05-06
For: 2022-05-06
View Original
Added on
April 07, 2026
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): May 6, 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 May 6, 2022,
reporting Investors Title Company's financial results for the fiscal quarter ended March 31, 2022.
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 May 6, 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:
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May 6, 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
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Exhibit No.
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Description
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| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Exhibit 99.1
Contact: Elizabeth B. Lewter
May 6, 2022
Telephone: (919) 968-2200
Nasdaq Symbol: ITIC
FOR IMMEDIATE RELEASE:
Chapel Hill, NC – Investors Title Company today announced results for the quarter ended March 31, 2022. The Company reported net income of
$6.2 million, or $3.25 per diluted share, compared with net income of $13.8 million, or $7.29 per diluted share, for the prior year period.
Total revenues decreased 4.3% to $69.0 million, compared to $72.1 million in the prior year period. The Company set a first quarter record
for net premiums written, however this was partially offset by the recognition of a $5.9 million loss in the estimated fair value of the equity investment portfolio. Net premiums written increased 2.7% to $63.1 million, driven by increases in
average home values and a higher level of purchase activity. Escrow and title-related fees increased 81.0% due to growth in independent agent markets and products which support title insurance. Revenues from non-title services increased 16.7%,
mainly due to higher like-kind exchange activity and trust management fee income.
Operating expenses increased 11.8% to $61.2 million compared to $54.8 million in the prior year period. Claims expense was $1.4 million
lower than the prior period mainly due to a higher level of favorable loss development in the current period. Personnel expenses were 31.6% higher primarily due to expansion of our presence in key markets, overall staff growth to support higher
transaction volumes, and increased employee benefit and contract labor costs. Other categories of operating expenses were 7.4% higher than the prior period primarily to support expansion of our geographic footprint as well as ongoing strategic
technology initiatives.
Income before income taxes decreased $9.5 million to $7.8 million. Excluding the impact of changes in the estimated fair value of
investments in equity securities, income before income taxes (non-GAAP) decreased 2.6% to $13.7 million versus $14.1 million for the prior year period (see Appendix A for a reconciliation of this non-GAAP measure to the most directly comparable
GAAP measure).
Chairman J. Allen Fine commented, “As expected, rising mortgage interest rates suppressed refinance activity for the quarter. However,
rising home prices and volume growth resulting from our expansion efforts resulted in a new quarterly record for net premiums written again this quarter.
“We remain optimistic about the prospects for solid results for the Company in 2022. Regardless of cyclical changes in the real estate
market, we will remain focused on profitably expanding our market presence and enhancing our competitive strengths.”
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, developments 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; the potential impact of inflation; 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, 2021 as filed with the Securities and Exchange Commission, and in subsequent filings.
# # # #
Investors Title Company and Subsidiaries
Consolidated Statements of Operations
For the Three Months Ended March 31, 2022 and 2021
(in thousands, except per share amounts)
(unaudited)
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Three Months Ended
March 31,
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2022
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2021
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Revenues:
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Net premiums written
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$
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63,125
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$
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61,477
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Escrow and other title-related fees
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5,064
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2,798
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Non-title services
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2,426
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2,078
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Interest and dividends
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915
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1,016
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Other investment income
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1,337
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941
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Net realized investment gains
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1,747
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321
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Changes in the estimated fair value of equity security investments
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(5,915
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3,239
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Other
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299
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208
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Total Revenues
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68,998
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72,078
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Operating Expenses:
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Commissions to agents
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29,857
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30,542
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Provision for claims
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176
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1,591
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Personnel expenses
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21,254
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16,153
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Office and technology expenses
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4,368
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2,742
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Other expenses
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5,550
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3,735
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Total Operating Expenses
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61,205
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54,763
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Income before Income Taxes
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7,793
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17,315
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Provision for Income Taxes
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1,608
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3,492
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Net Income
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$
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6,185
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$
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13,823
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Basic Earnings per Common Share
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$
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3.26
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$
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7.30
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Weighted Average Shares Outstanding – Basic
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1,896
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1,894
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Diluted Earnings per Common Share
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$
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3.25
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$
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7.29
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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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Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of March 31, 2022 and December 31, 2021
(in thousands)
(unaudited)
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March 31,
2022 |
December 31,
2021 |
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Assets
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Cash and cash equivalents
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$
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37,310
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$
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37,168
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Investments:
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Fixed maturity securities, available-for-sale, at fair value
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67,725
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79,791
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Equity securities, at fair value
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69,945
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76,853
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Short-term investments
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58,555
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45,930
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Other investments
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20,217
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20,298
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Total investments
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216,442
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222,872
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Premiums and fees receivable
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23,850
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22,953
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Accrued interest and dividends
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1,000
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817
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Prepaid expenses and other receivables
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11,618
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11,721
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Property, net
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13,413
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13,033
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Goodwill and other intangible assets, net
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15,621
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15,951
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Operating lease right-of-use assets
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7,321
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5,202
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Other assets
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1,822
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1,771
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Total Assets
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$
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328,397
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$
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331,488
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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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36,366
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$
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36,754
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Accounts payable and accrued liabilities
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34,486
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43,868
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Operating lease liabilities
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7,453
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5,329
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Current income taxes payable
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6,164
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3,329
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Deferred income taxes, net
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11,436
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13,121
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Total liabilities
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95,905
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102,401
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Stockholders’ Equity:
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Common stock – no par value (10,000
authorized shares; 1,897 and 1,895 shares issued and outstanding as of March 31, 2022 and December 31, 2021, 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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231,274
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225,861
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Accumulated other comprehensive income
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1,218
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3,226
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Total stockholders’ equity
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232,492
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229,087
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Total Liabilities and Stockholders’ Equity
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$
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328,397
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$
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331,488
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Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
For the Three Months Ended March 31, 2022 and 2021
(in thousands)
(unaudited)
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Three Months Ended March 31,
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2022
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%
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2021
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%
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Branch
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$
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17,418
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27.6
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$
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17,360
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28.2
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Agency
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45,707
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72.4
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44,117
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71.8
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Total
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$
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63,125
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100.0
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$
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61,477
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100.0
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Investors Title Company and Subsidiaries
Appendix A
Non-GAAP Measures Reconciliation
For the Three Months Ended March 31, 2022 and 2021
(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
March 31, |
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2022
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2021
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Revenues
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Total revenues (GAAP)
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$
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68,998
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$
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72,078
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Add (Subtract): Changes in the estimated fair value of equity security investments
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5,915
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(3,239
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Adjusted revenues (non-GAAP)
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$
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74,913
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$
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68,839
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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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7,793
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$
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17,315
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Add (Subtract): Changes in the estimated fair value of equity security investments
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5,915
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(3,239
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Adjusted income before income taxes (non-GAAP)
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$
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13,708
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$
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14,076
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