UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| |X| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2004
OR
| |_| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______________ to _______________
Commission File Number: 0-11774
INVESTORS TITLE COMPANY
(Exact name of registrant as specified in its charter)
| North Carolina | 56-1110199 | |
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| (State of Incorporation) | (I.R.S. Employer Identification No.) | |
| 121 North Columbia Street, Chapel Hill, North Carolina 27514 | ||
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| (Address of Principal Executive Offices) (Zip Code) | ||
| (919) 968-2200 | ||
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| (Registrant’s Telephone Number Including Area Code) | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|
As of September 30, 2004, there were 2,855,744 outstanding shares of common stock of Investors Title Company, including 367,014 shares held by Investors Title Insurance Company, a wholly owned subsidiary of Investors Title Company.
| September 30, 2004 | December 31, 2003 | |||||
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| (Unaudited) | (Audited) | |||||
| Assets | ||||||
| Cash and cash equivalents | $ | 4,498,084 | $ | 5,125,356 | ||
| Investments in securities: | ||||||
| Fixed maturities: | ||||||
| Held-to-maturity, at amortized cost | 2,207,241 | 2,481,353 | ||||
| Available-for-sale, at fair value | 60,057,395 | 45,100,520 | ||||
| Equity securities, at fair value | 6,820,648 | 14,556,785 | ||||
| Short-term investments | 18,050,084 | 16,747,964 | ||||
| Other investments | 1,290,798 | 955,561 | ||||
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| Total investments | 88,426,166 | 79,842,183 | ||||
| Premiums receivable, less allowance for doubtful accounts of | ||||||
| $2,360,000 and $2,474,000 for 2004 and 2003, respectively | 7,146,604 | 8,031,803 | ||||
| Accrued interest and dividends | 651,848 | 667,147 | ||||
| Prepaid expenses and other assets | 1,257,476 | 934,345 | ||||
| Property acquired in settlement of claims | 286,517 | 286,517 | ||||
| Property, net | 4,501,458 | 4,099,243 | ||||
| Deferred income taxes, net | 927,828 | 1,485,217 | ||||
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| Total Assets | $ | 107,695,981 | $ | 100,471,811 | ||
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| Liabilities and Stockholders’ Equity | ||||||
| Liabilities: | ||||||
| Reserves for claims (Note 2) | $ | 31,541,000 | $ | 30,031,000 | ||
| Accounts payable and accrued liabilities | 5,141,775 | 6,243,906 | ||||
| Commissions and reinsurance payables | 484,508 | 726,191 | ||||
| Current income taxes payable | 518,323 | 281,968 | ||||
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| Total liabilities | 37,685,606 | 37,283,065 | ||||
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| Commitments and Contingencies (Note 6) | ||||||
| Stockholders’ Equity: | ||||||
| Class
A Junior Participating preferred stock (shares authorized 100,000; no shares issued) |
— | — | ||||
| Common stock-no par value (shares authorized 10,000,000; | ||||||
| 2,488,730 and 2,503,923 shares issued and outstanding 2004 and 2003, | ||||||
| respectively, excluding 367,014 and 351,821 shares 2004 and 2003, | ||||||
| respectively, of common stock held by the Company’s subsidiary) | 1 | 1 | ||||
| Retained earnings | 66,895,192 | 59,756,927 | ||||
| Accumulated other comprehensive income, net of deferred taxes of | ||||||
| $1,602,866 and $1,768,477 for 2004 and 2003, respectively (Note 3) | 3,115,182 | 3,431,818 | ||||
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| Total stockholders’ equity | 70,010,375 | 63,188,746 | ||||
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| Total Liabilities and Stockholders’ Equity | $ | 107,695,981 | $ | 100,471,811 | ||
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See notes to consolidated financial statements.
1
| For
the Three Months Ended September 30 |
For
the Nine Months Ended September 30 |
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| 2004 | 2003 | 2004 | 2003 | |||||||||
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| Revenues: | ||||||||||||
| Underwriting income: | ||||||||||||
| Premiums written | $ | 18,372,069 | $ | 23,583,938 | $ | 55,166,785 | $ | 66,764,869 | ||||
| Less - premiums for reinsurance ceded | 37,510 | 114,348 | 200,818 | 304,665 | ||||||||
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| Net premiums written | 18,334,559 | 23,469,590 | 54,965,967 | 66,460,204 | ||||||||
| Investment income - interest and dividends | 597,708 | 666,399 | 1,963,030 | 2,020,834 | ||||||||
| Net realized gain on sales of investments | 19,280 | 1,130 | 39,667 | 66,044 | ||||||||
| Exchange services revenue (Note 5) | 931,446 | 383,094 | 1,953,644 | 873,995 | ||||||||
| Other | 620,331 | 803,026 | 1,679,072 | 2,110,248 | ||||||||
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| Total | 20,503,324 | 25,323,239 | 60,601,380 | 71,531,325 | ||||||||
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| Operating Expenses: | ||||||||||||
| Commissions to agents | 7,372,112 | 11,029,831 | 22,283,907 | 31,885,609 | ||||||||
| Provision for claims (Note 2) | 2,110,152 | 2,699,432 | 6,139,555 | 7,470,163 | ||||||||
| Salaries, employee benefits and payroll taxes (Note 6) | 4,042,857 | 4,139,980 | 12,219,022 | 11,395,979 | ||||||||
| Office occupancy and operations | 1,294,766 | 1,321,753 | 3,821,520 | 3,784,546 | ||||||||
| Business development | 447,159 | 692,124 | 1,324,096 | 1,475,280 | ||||||||
| Taxes, other than payroll and income | 42,823 | 101,178 | 341,877 | 276,460 | ||||||||
| Premium and retaliatory taxes | 357,244 | 463,437 | 1,079,639 | 1,347,542 | ||||||||
| Professional fees | 336,919 | 324,925 | 1,144,906 | 783,064 | ||||||||
| Other | 84,428 | 87,780 | 138,995 | 287,625 | ||||||||
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| Total | 16,088,460 | 20,860,440 | 48,493,517 | 58,706,268 | ||||||||
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| Income Before Income Taxes | 4,414,864 | 4,462,799 | 12,107,863 | 12,825,057 | ||||||||
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| Provision For Income Taxes | 1,487,000 | 1,499,000 | 4,078,000 | 4,165,245 | ||||||||
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| Net Income | $ | 2,927,864 | $ | 2,963,799 | $ | 8,029,863 | $ | 8,659,812 | ||||
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| Basic Earnings Per Common Share (Note 4) | $ | 1.17 | $ | 1.18 | $ | 3.21 | $ | 3.46 | ||||
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| Weighted Average Shares Outstanding - Basic (Note 4) | 2,493,786 | 2,503,405 | 2,500,654 | 2,503,650 | ||||||||
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| Diluted Earnings Per Common Share (Note 4) | $ | 1.12 | $ | 1.13 | $ | 3.06 | $ | 3.30 | ||||
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| Weighted Average Shares Outstanding - Diluted (Note 4) | 2,608,160 | 2,629,026 | 2,621,922 | 2,621,504 | ||||||||
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| Dividends Paid | $ | 85,719 | $ | 75,098 | $ | 274,894 | $ | 225,277 | ||||
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| Dividends Per Share | $ | 0.04 | $ | 0.03 | $ | 0.11 | $ | 0.09 | ||||
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See notes to consolidated financial statements.
2
| Common Stock | Retained Earnings |
Accumulated
Other Comprehensive Income (Net Unrealized Gain (Loss) on Investments) |
Total Stockholders’ Equity |
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| Shares | Amount | |||||||||||||||
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| Balance, December 31, 2002 | 2,515,804 | $ | 1 | $ | 49,613,044 | $ | 3,055,139 | |||||||||