THE SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended December 31, 2004
OF THE SECURITIES EXCHANGE ACT OF 1934
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UNITED STATES FORM 10-K |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2004 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| Commission file number 0-11774 |
| INVESTORS TITLE COMPANY |
| (Exact name of registrant as specified in its charter) |
| North Carolina | 56-1110199 |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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121 North Columbia Street Securities registered pursuant to section 12(b) of the Act: Securities registered pursuant to section 12(g) of the Act: Common Stock, no par value Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) 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 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405
of this chapter) is not contained herein, and will not be contained, to the best of registrant’s
knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes The aggregate market value of the common shares held by non-affiliates was $59,365,278 based on the closing sales price on the NASDAQ National Market System on the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2004). As of February 28, 2005, there were 2,855,744 common shares of the registrant outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of Investors Title Company’s Annual Report to Shareholders for the fiscal year ended December 31, 2004 are incorporated by reference in Parts I, II and IV hereof and portions of Investors Title Company’s definitive proxy statement for the Annual Meeting of Shareholders to be held on May 18, 2005 are incorporated by reference in Part III hereof. |
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SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K, as well as information included in future filings by the Company with the Securities and Exchange Commission and information contained in written material, press releases and oral statements issued by or on behalf of the Company, contains, or may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect management’s current outlook for future periods. These statements may be identified by the use of words such as “plan,” “expect,” “aim,” “believe,” “project,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could” and other expressions that indicate future events and trends. All statements that address expectations or projections about the future, including statements about the Company’s strategy for growth, product and service development, market share position, claims, expenditures, financial results and cash requirements, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events that are subject to a number of risks and uncertainties. Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors, including, but not limited to, the following: (1) the demand for title insurance will vary due to factors such as interest rate fluctuations, the availability of mortgage funds, the level of real estate transactions, including mortgage refinance activity, the cost of real estate, consumer confidence, employment levels, family income levels and general economic conditions; (2) losses from claims may be greater than anticipated such that reserves for possible claims are inadequate; (3) unanticipated adverse changes in securities markets, including interest rates, could result in material losses on the Company’s investments; (4) the Company’s dependence on key management personnel, the loss of whom could have a material adverse affect on the Company’s business; (5) the Company’s ability to develop and offer products and services that meet changing industry standards in a timely and cost-effective manner and significant changes or additions to applicable government regulations; and (6) state statutes require the Company’s insurance subsidiaries to maintain minimum levels of capital, surplus and reserves and restrict the amount of dividends that the insurance subsidiaries may pay to the Company without prior regulatory approval. These and other risks and uncertainties may be described from time to time in the Company’s other reports and filings with the Securities and Exchange Commission. |
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INVESTORS TITLE COMPANY AND SUBSIDIARIES TABLE OF CONTENTS |
PART I GENERAL Investors Title Company (the “Company”) is a holding company that operates through its subsidiaries and was incorporated in the State of North Carolina in February 1973. The Company became operational on June 24, 1976, when it acquired Investors Title Insurance Company (“ITIC”) as a wholly owned subsidiary under a plan of exchange of shares of common stock. On September 30, 1983, the Company acquired Northeast Investors Title Insurance Company (“NE-ITIC”), formerly Investors Title Insurance Company of South Carolina, as a wholly owned subsidiary under a plan of exchange of shares of common stock. Investors Capital Management Company (“ICMC”), a wholly owned subsidiary of the Company, was organized on October 17, 2003. The Company’s most recent subsidiary, Investors Trust Company (“Investors Trust”), was granted a trust charter by the North Carolina Banking Commissioner on February 17, 2004. The Company engages primarily in three lines of business. The main business activity is the issuance of title insurance through ITIC and NE-ITIC. The second line of business provides tax-deferred exchange services through its subsidiaries, Investors Title Exchange Corporation (“ITEC”) and Investors Title Accommodation Corporation (“ITAC”). The Company has also recently entered into a third line of business, which it added to supplement its traditional lines of business, providing investment management and trust services to individuals, trusts and other entities. See Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 13 of Notes to Consolidated Financial Statements in the 2004 Annual Report to Shareholders incorporated by reference in this Form 10-K Annual Report for additional information related to the revenues, income and assets attributable to the Company’s operating segments. The Company’s executive offices are located at 121 North Columbia Street, Chapel Hill, North Carolina 27514. The Company’s telephone number is (919) 968-2200, its facsimile number is (919) 968-2235, and its Internet address is www.invtitle.com, the contents of which are not and shall not be deemed a part of this document or any other U.S. Securities and Exchange filing. The Company makes available free of charge on its Internet website its annual report on Form 10-K, its quarterly reports on Form 10-Q, its current reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after such materials are electronically filed with or furnished to the Securities and Exchange Commission. Title Insurance Through its two wholly owned subsidiaries, ITIC and NE-ITIC, the Company underwrites land title insurance for owners and mortgagees as a primary insurer and as a reinsurer for other title insurance companies. Title insurance protects against loss or damage resulting from defects that affect the title to real property. The commitment and policies issued are the standard American Land Title Association approved forms. |
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There are two basic types of title insurance policies - one for the mortgage lender and one for the real estate owner. A lender often requires property owners to purchase title insurance to protect its position as a holder of a mortgage loan, but the lender’s title insurance policy does not protect the property owner. The property owner needs to purchase an owner’s title insurance policy to protect his investment. When real property is conveyed from one party to another, occasionally there is a hidden defect in the title or a mistake in a prior deed, will or mortgage that may give a third party a legal claim against such property. If a claim is made against real property, title insurance provides a corporate guarantee against insured defects, pays all legal expenses to eliminate any title defects, pays any claims arising from errors in title examination and recording, and pays any losses arising from hidden defects in title and defects that are not of record. Title insurance provides an assurance that the insurance holder’s ownership and use of such property will be defended promptly against claims, at no cost, whether or not the claim is valid. A title defect is one of any number of things that could jeopardize the property owner’s interest. It could be an unsatisfied mortgage, lien, judgment or other unrecorded claim against the property. It could arise through easements, use restrictions or other existing covenants, or it could be a hidden risk. Title insurance generally protects against four kinds of hidden risks — errors in the public records such as incorrect information in deeds and mortgages regarding names, signatures and legal descriptions; judgments, liens and mortgages or any other claims against the property or the seller which become the new owner’s responsibility after closing, such as unpaid taxes, assessments and other debts to creditors; claims to ownership by the spouse of a former owner or by the “missing heir” of a deceased owner who did not receive his share of the estate; and invalid deeds or other transfers by sellers who did not actually own the property or by previous owners who were minors or not mentally competent. The Company assumes and cedes reinsurance with other insurance companies in the normal course of business. Ceded reinsurance is comprised of excess of loss treaties, which protects against losses over certain amounts. ITIC was incorporated in the State of North Carolina on January 28, 1972, and became licensed to write title insurance in the State of North Carolina on February 1, 1972. At present, ITIC mainly writes land title insurance both as a primary insurer and as a reinsurer throughout the eastern and midwestern United States. ITIC writes title insurance through issuing agents or branch offices in the District of Columbia and the States of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia and Wisconsin. In addition to the states in which ITIC currently writes title insurance, it is also licensed to write title insurance in 17 additional states. Agents issue policies for ITIC and may provide other services such as search and settlement services. NE-ITIC was incorporated in the State of South Carolina on February 23, 1973, and became licensed to write title insurance in that state on November 1, 1973. It currently writes title insurance as a primary insurer and as a reinsurer in the State of New York. NE-ITIC is also licensed to write title insurance in North Carolina and South Carolina. |
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Each state license authorizing ITIC or NE-ITIC to write title insurance must be renewed annually. These licenses are necessary for the companies to operate as a title insurer in each state in which they are held and the loss of a license in any state by either company would prevent the company from issuing title insurance in that state. In the State of North Carolina, ITIC issues title insurance commitments and policies through its home office and its 27 branch offices that are located throughout North Carolina. The Company also has a branch office in South Carolina and Michigan. Title policies are primarily issued through issuing agents in other states. In the ordinary course of business, ITIC and NE-ITIC reinsure certain risks with other title insurers for the purpose of limiting their exposure. They also assume reinsurance for certain risks of other title insurers for which they receive additional income. For the last three years, reinsurance activities accounted for less than 1% of total premium volume. As of December 31, 2004, ITIC had a risk retention limit of $2,750,000, meaning that it assumed primary risks up to $2,750,000. It then reinsured the next $250,000 of risk with NE-ITIC, and all risks above $3,000,000 were reinsured with an unrelated reinsurer. As of December 31, 2004, NE-ITIC had a risk retention limit of $250,000, meaning that it assumed primary risks up to $250,000. It then reinsured the next $2,750,000 of risk with ITIC, and all amounts above $3,000,000 were reinsured with an unrelated reinsurer. Both ITIC’s and NE-ITIC’s risk retention limits are self-imposed and are more conservative than state insurance regulations require. ITIC’s self-imposed retention of $2,750,000 is only 15% of its statutorily permitted retention of $18,371,349. NE-ITIC’s self-imposed retention of $250,000 is only 12.3% of its statutorily permitted retention of $2,025,024. ITIC has been recognized by two independent Fannie Mae-approved actuarial firms, Demotech, Inc. and LACE Financial Corporation, with rating categories of “A Double Prime” and “A.” NE-ITIC’s financial stability also has been recognized by Demotech, Inc. and LACE Financial Corporation with rating categories of “A Prime” and “A+.” According to Demotech, title insurance underwriters earning a financial stability rating of A’’ (A Double Prime) or A’ (A Prime) possess unsurpassed financial stability related to maintaining positive surplus as regards policyholders, regardless of the severity of a general economic downturn or deterioration in the title insurance cycle. A LACE rating of “A+” or “A” indicates that a title insurance company has a strong overall financial condition that will allow it to meet its future claims and that, generally, the company has good operating earnings, is well capitalized and has adequate reserves. Exchange Services In 1988, the Company established Investors Title Exchange Corporation, a wholly owned subsidiary (“ITEC”), to provide services in connection with tax-deferred exchanges of like-kind property. ITEC acts as an intermediary in tax-deferred exchanges of property held for productive use in a trade or business or for investments, and its income is derived from fees for handling exchange transactions. |
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The Company established South Carolina Document Preparation Company (“SCDPC”) as a wholly owned subsidiary in 1994. In the first quarter of 2001, SCDPC changed its name to Investors Title Accommodation Corporation (“ITAC”) and began serving as an exchange accommodation titleholder, offering a vehicle for accomplishing a reverse exchange when a taxpayer must acquire replacement property before selling the relinquished property. Investment Management and Trust Services The Company organized ICMC, a wholly owned subsidiary, as a North Carolina corporation on October 17, 2003. ICMC is currently licensed as an investment adviser in North Carolina and South Carolina. Investors Trust, also a wholly owned subsidiary of the Company, received its North Carolina trust charter on February 17, 2004. The Company anticipates that ICMC and Investors Trust will work together to provide investment management and trust services to individuals, companies, banks and trusts. These subsidiaries did not have significant activities in 2004, and are not currently a reportable segment for which financial information is presented in the financial statements and there is no assurance that this business will be successful. OPERATIONS OF SUBSIDIARIES For a description of net premiums written geographically, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations. See Note 13 of Notes to Consolidated Financial Statements in the 2004 Annual Report to Shareholders incorporated by reference in this Form 10-K Annual Report for additional information related to the Company’s operating segments. Title Insurance ITIC and NE-ITIC issues title insurance coverage through its direct operations or through partially owned or independent title insurance agents. ITIC and NE-ITIC offer primary title insurance coverage to owners and mortgagees of real estate and reinsurance of title insurance risks to other title insurance companies. Title insurance premiums written reflect a one-time premium payment, with no recurring premiums. Premiums are recorded and policies or commitments are issued upon receipt of final certificates or preliminary reports with respect to titles. Title insurance commissions earned by the Company’s agents are recognized as expense concurrently with premium recognition. Exchange Services ITEC and ITAC provide customer services in connection with tax-deferred real property exchanges pursuant to Section 1031 of the Internal Revenue Code. As a qualified intermediary, ITEC holds the proceeds from sales of relinquished properties until the acquisition of identified replacement properties occurs. ITAC facilitates tax-deferred reverse exchanges pursuant to IRS Revenue Procedure 2000-37. These exchanges require ITAC, using funds borrowed on a non-recourse basis from the customer or his lender, to acquire the designated replacement property on behalf of the customer by taking temporary title to the customer’s property until after the disposition of identified relinquished property occurs. |
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SEASONALITY Title Insurance Title insurance premiums are closely related to the level of real estate activity and the average price of real estate sales. The availability of funds to finance purchases directly affects real estate sales. Other factors include consumer confidence, economic conditions, supply and demand, mortgage interest rates and family income levels. Historically, the first quarter has the least real estate activity because fewer real estate transactions occur, while the remaining quarters are more active. Refinance activity is generally less seasonal, but it is subject to interest rate volatility. Fluctuations in mortgage interest rates can cause shifts in real estate activity outside of the normal seasonal pattern. Exchange Services Seasonal factors affecting the level of real estate activity and the volume of title premiums written will also affect the demand for exchange services. MARKETING Title Insurance ITIC delivers title insurance coverage through a home office, branch offices, and issuing agents. In North Carolina, ITIC issues policies primarily through a home office and 27 branch offices. The Company also has a branch office in South Carolina and Michigan. ITIC also writes title insurance policies through issuing agents in the District of Columbia and the States of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia and Wisconsin. Issuing agents are typically real estate attorneys or subsidiaries of community and regional mortgage lending institutions, depending on local customs and regulations and the Company’s marketing strategy in a particular territory. NE-ITIC currently operates through agency offices in the State of New York. ITIC and NE-ITIC strive to provide superior service to their customers and consider this an important factor in attracting and retaining customers. Branch and corporate personnel strive to develop new business and agency relationships to increase market share and ITIC’s Commercial Services Division provides services to commercial clients. The Company’s marketing efforts are also enhanced through advertising in various periodicals. Exchange Services Marketing of exchange services offered by ITEC and ITAC has been increasingly incorporated into the marketing of the core title products offered by ITIC and NE-ITIC. The Commercial Services Division of ITIC also markets the services offered by ITEC and ITAC to its clients. |
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CUSTOMERS The Company is not dependent upon any single customer or a few customers, and the loss of any single customer would not have a material adverse effect on the Company. INSURED RISK ON POLICIES IN FORCE Generally, the amount of the insured risk on a title insurance policy is equal to the lesser of the purchase price of the insured property or the fair market value of the property. In the event that a claim is made against the property, the insurer is also responsible for paying all legal expenses in connection with defending the insured party and eliminating any title defects affecting the property. The insurer may, however, choose to pay the policy limits to the insured, at which time the insurer’s duty to defend the claim is satisfied. At any given time, the insurer’s actual financial risk is only a portion of the aggregate insured risk of all policies in force. The reduction in risk results in part from the reissuance of title insurance policies by other underwriters when the property is conveyed or refinanced. An owner’s policy is effective only as long as the insured has an ownership interest in the property or has liability under warranties of title. Furthermore, the coverage on a lender’s title insurance policy is reduced and eventually terminated as the loan it secures is paid. Due to the variability of these factors, the aggregate contingent liability of the Company and its subsidiaries cannot be determined with any precision. ENVIRONMENTAL MATTERS The title insurance policies ITIC and NE-ITIC currently issue exclude liability for environmental risks and contamination. Although policies issued prior to 1992 may not specifically exclude such environmental risks, they generally do not provide affirmative coverage for such risks. As a result, the Company does not anticipate that it or its subsidiaries will incur any significant expenses related to environmental claims. In connection with effecting tax-deferred exchanges of like-kind property, ITEC and ITAC may temporarily hold title to property pursuant to an accommodation titleholder agreement. In such situations, the person or entity for which title is being held must execute an indemnification agreement pursuant to which it agrees to indemnify ITEC or ITAC, as appropriate, for any environmental or other claims which may arise as a result of the arrangement. REGULATIONS Title Insurance The Company is an insurance holding company and therefore it is subject to regulation in the states in which its insurance subsidiaries do business. These regulations, among other things, require insurance holding companies to register and file certain reports and require prior regulatory approval of the payment of dividends and other intercompany transfers. |
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Title insurance companies are extensively regulated under applicable state laws. All states have requirements for admission to do business as an insurance company, including minimum levels of capital and surplus. State regulatory authorities monitor the stability and service of insurance companies and possess broad powers with respect to the licensing of title insurers and agents, rates, type and amount of investments, policy forms, financial reporting, reserve requirements, and dividend restrictions, as well as examinations and audits of title insurers. The Company’s two insurance subsidiaries are subject to examination at any time by the insurance regulators in the states where they are licensed. Proposals to change the laws and regulations governing insurance holding companies and the title insurance industry are often introduced in Congress, in the state legislatures and before the various insurance regulatory agencies. The Company regularly monitors such proposals and legislation, although the likelihood and timing of them and the impact they may have on the Company and its subsidiaries cannot be determined at this time. ITIC is domiciled in North Carolina and is subject to North Carolina insurance regulations. The North Carolina Department of Insurance typically schedules financial examinations every five years. ITIC was last examined by the North Carolina Department of Insurance for the period January 1, 1995 through December 31, 1999. No material deficiencies were noted in the report. NE-ITIC is domiciled in South Carolina and subject to South Carolina insurance regulations. The South Carolina Department of Insurance periodically schedules financial examinations. NE-ITIC was examined by the South Carolina Department of Insurance for the period January 1, 1998 through December 31, 2000. No material deficiencies were noted in the report. In addition to financial examinations, ITIC and NE-ITIC are subject to market conduct examinations by the North Carolina Department of Insurance and the South Carolina Department of Insurance, respectively. These audits examine domiciled state activity. ITIC’s last market conduct examination commenced on May 3, 2004 for the period January 1, 2001 through December 31, 2003, with no material deficiencies noted. NE-ITIC’s last market conduct examination coincided with its financial examination, which commenced in November 2001 for the period January 1, 1998 through December 31, 2000. No material deficiencies were noted for NE-ITIC by the market conduct examiners. Both ITIC and NE-ITIC meet the statutory premium reserve requirements and the minimum capital and surplus requirements of the states in which they are licensed. Exchange Services Intermediary services are not federally regulated and neither ITEC nor ITAC operate in any states that regulate this industry. ITEC and ITAC both provide services to taxpayers pursuant to Internal Revenue Service (“IRS”) regulations that provide taxpayers a safe harbor by using a qualified intermediary to structure tax-deferred exchanges of property and using an exchange accommodation titleholder to hold property in reverse exchange transactions. Periodically, changes to the tax code provisions affecting like-kind exchanges are considered, which could possibly eliminate the need for the services the exchange segment provides. |
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COMPETITION Title Insurance ITIC currently operates primarily in North Carolina, Michigan, Pennsylvania, South Carolina, Tennessee and Virginia and NE-ITIC currently operates in New York. ITIC’s and NE-ITIC’s major competitors, which together comprise a majority of the title insurance market on a national level, are Chicago Title Insurance Company, Commonwealth Land Title Insurance Company, Fidelity National Title Insurance Company, First American Title Insurance Company, Lawyers Title Insurance Corporation, Old Republic National Title Insurance Company and Stewart Title Guaranty Company. Key factors that affect competition in the title insurance industry are price, expertise, timeliness and quality of service and the financial strength and size of the insurer. Title insurance underwriters also compete for agents based upon the ratio of premium splits between the underwriter and the agent. In addition, there are numerous industry-related regulations and statutes that set out conditions and requirements to conduct business. Changes to or the removal of such regulations and statutes could result in additional competition from alternative title insurance products or new entrants into the industry that could materially affect the Company’s business operations and financial condition. Exchange Services Competition for ITEC and ITAC comes from other title insurance companies as well as some major banks that offer exchange services. Key elements that affect competition are price, expertise, timeliness and quality of service and the financial strength and size of the company. Exchange services are not a regulated industry; therefore, there is no market data available regarding the Company’s market position in this industry. INVESTMENTS The Company and its subsidiaries derive a substantial portion of their income from investments in bonds (municipal and corporate) and equity securities. The investment policy is designed to maintain a high quality portfolio and maximize income. Some state laws impose restrictions upon the types and amounts of investments that can be made by the Company’s insurance subsidiaries. See Note 3 of Notes to Consolidated Financial Statements in the 2004 Annual Report to Shareholders incorporated by reference in this Form 10-K Annual Report for the major categories of investments, earnings by investment categories, scheduled maturities, amortized cost, and market values of investment securities. EMPLOYEES The Company has no paid employees. Officers of the Company are full-time paid employees of ITIC. The Company’s subsidiaries had 214 full-time employees and 13 part-time employees as of December 31, 2004. None of the employees of the Company or its subsidiaries are subject to a collective bargaining agreement. Management considers its relationship with its employees to be favorable. |
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| Name | Age | Position with Registrant | ||
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| J. Allen Fine | 70 | Chief Executive Officer and Chairman of the Board | ||
| James A. Fine, Jr. | 42 | President, Treasurer, Chief Financial Officer, Chief Accounting Officer and Director |
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| W. Morris Fine | 38 | Executive Vice President, Secretary and Director |
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J. Allen Fine has been Chief Executive Officer and Chairman of the Board of the Company since its incorporation in 1973. Mr. Fine also served as President of the Company until May 1997. Mr. Fine is the father of James A. Fine, Jr., President, Treasurer and Director of the Company, and W. Morris Fine, Executive Vice President, Secretary and Director of the Company. James A. Fine, Jr. was named Vice President of the Company in 1987. In 1997, he was named President and Treasurer and appointed as a Director of the Company. He is the son of J. Allen Fine, Chief Executive Officer and Chairman of the Board of the Company, and the brother of W. Morris Fine, Executive Vice President, Secretary and Director of the Company. W. Morris Fine was named Vice President of the Company in 1992. In 1993, he was named Treasurer of the Company and served in that capacity until 1997. In 1997, he was named Executive Vice President and Secretary of the Company. In 1999, he was appointed as a Director of the Company. W. Morris Fine is the son of J. Allen Fine, Chief Executive Officer and Chairman of the Board of the Company, and the brother of James A. Fine, Jr., President, Treasurer and Director of the Company. |
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| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
Weighted Average Price of Outstanding Options, Warrants and Rights |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans |
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| Equity compensation plans approved by shareholders |
246,781 | $ 16.45 | 196,300 | ||||||
| Equity compensation plans not approved by shareholders |
— | — | — | ||||||
| Total | 246,781 | $ 16.45 | 196,300 | ||||||
The following table provides information about purchases by the Company (and all affiliated purchasers) during the quarter ended December 31, 2004 of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act: Issuer Purchases of Equity Securities |
| 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 |
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| Beginning of period | 505,855 | |||||||||
| 10/01/04 - 10/31/04 | 2,052 | $ | 31.30 | 2,052 | 503,803 | |||||
| 11/01/04 - 11/30/04 | 236 | $ | 33.87 | 236 | 503,567 | |||||
| 12/01/04 - 12/31/04 | 8,695 | $ | 34.81 | 8,695 | 494,872 | |||||
| Total: | 10,983 | $ | 34.13 | 10,983 | 494,872 | |||||
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| (1) | For the quarter ended December 31, 2004, ITIC purchased an aggregate of 10,983 shares of the Company’s common stock pursuant to the purchase plan (the “Plan”) that was publicly announced on June 5, 2000. | |
| (2) | On June 5, 2000, the Board of Directors of ITIC approved the purchase by ITIC of up to an aggregate of 500,000 shares of the Company’s common stock pursuant to the Plan. Subsequently, the Board of Directors of ITIC approved the purchase of an additional 125,000 shares of the Company’s common stock pursuant to the Plan. Unless terminated earlier by resolution of the Board of Directors of ITIC, the Plan will expire when ITIC has purchased all shares authorized for purchase thereunder. | |
| (3) | ITIC intends to make further purchases under this Plan. |
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PART IV |
| (a)(1) | Financial Statements. |
| The following financial statements in the 2004 Annual Report to Shareholders are hereby incorporated | |
| by reference in this Form 10-K Annual Report: | |
| Consolidated Balance Sheets as of December 31, 2004 and 2003 | |
| Consolidated Statements of Income for the Years Ended December 31, 2004, 2003 and 2002 | |
| Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2004, 2003 and 2002 | |
| Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2004, 2003 and 2002 | |
| Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 2003 and 2002 | |
| Notes to Consolidated Financial Statements | |
| Report of Independent Auditors | |
| (a)(2) | Financial Statement Schedules. |
| Following is a list of financial statement schedules filed as part of this Form 10-K Annual Report: | |
| Schedule Number | Description | ||
|---|---|---|---|
| I | Summary of Investments - Other Than Investments in Related Parties | ||
| II | Condensed Financial Information of Registrant | ||
| III | Supplementary Insurance Information | ||
| IV | Reinsurance | ||
| V | Valuation and Qualifying Accounts |
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All other schedules are omitted, as the required information either is not applicable, is not required, or is presented in the consolidated financial statements or the notes thereto. (a)(3) Exhibits. The exhibits filed as a part of this report and incorporated herein by reference to other documents are listed in the Index to Exhibits to this Annual Report on Form 10-K. |
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Pursuant to the requirements of Section 13 or 15(d) of the Securities 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 | ||
| (Registrant) | ||
| By: | /s/ J. Allen Fine | |
| ——————————————————— | ||
| J. Allen Fine, Chairman and Chief Executive | ||
| Officer (Principal Executive Officer) | ||
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March 16, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on the 16th day of March, 2005. |
| /s/ J. Allen Fine | ||
| ——————————————————— | ———————————————— | |
| J. Allen Fine, Chairman of the Board and | James R. Morton, Director | |
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| /s/ James A. Fine, Jr. | /s/ A. Scott Parker III | |
| ——————————————————— | ———————————————— | |
| James A. Fine, Jr., President, Treasurer and | A. Scott Parker III, Director | |
| Director (Principal Financial Officer and | ||
| Principal Accounting Officer) | ||
| /s/ W. Morris Fine | /s/ H. Joe King, Jr. | |
| ——————————————————— | ———————————————— | |
| W. Morris Fine, Executive Vice President, | H. Joe King, Jr., Director | |
| Secretary and Director | ||
| /s/ David L. Francis | /s/ William J. Kennedy III | |
| ——————————————————— | ———————————————— | |
| David L. Francis, Director | William J. Kennedy III, Director | |
| /s/ Loren B. Harrell, Jr. | ||
| ——————————————————— | ||
| Loren B. Harrell, Jr., Director |
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| SCHEDULE I | ||||||||||
| INVESTORS TITLE COMPANY AND SUBSIDIARIES SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES As of December 31, 2004 |
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| Type of Investment | Cost(1) | Market Value | Amount at which shown in the Balance Sheet (2) |
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| Fixed Maturities: | ||||||||||
| Bonds: | ||||||||||
| States, municipalities and political subdivisions |
$ | 65,034,361 | $ | 66,617,609 | $ | 66,490,115 | ||||
| Public utilities | 199,662 | 216,346 | 216,346 | |||||||
| All other corporate bonds | 7,339,755 | 7,967,940 | 7,967,940 | |||||||
| Short term investments | 9,106,643 | 9,106,643 | 9,106,643 | |||||||
| Certificates of deposit | 1,027,678 | 1,027,678 | 1,027,678 | |||||||
| Total fixed maturities | 82,708,099 | 84,936,216 | 84,808,722 | |||||||
| Equity Securities: | ||||||||||
| Common Stocks: | ||||||||||
| Public utilities | 143,440 | 196,350 | 196,350 | |||||||
| Banks, trust and insurance companies | 70,991 | 442,590 | 442,590 | |||||||
| Industrial, miscellaneous and all other | 3,334,183 | 5,506,916 | 5,506,916 | |||||||
| Nonredeemable preferred stocks | 893,690 | 1,094,450 | 1,094,450 | |||||||
| Total equity securities | 4,442,304 | 7,240,306 | 7,240,306 | |||||||
| Other Investments | 1,211,517 | 1,211,517 | ||||||||
| Total investments per the consolidated balance sheet | $ | 88,361,920 | $ | 93,260,545 | ||||||
| (1) | Fixed maturities are shown at amortized cost and equity securities are shown at original cost. |
| (2) | Bonds of states, municipalities and political subdivisions are shown at amortized cost for held-to-maturity bonds and fair value for available-for-sale bonds. Equity securities are shown at fair value. |
| SCHEDULE II |
INVESTORS TITLE COMPANY (PARENT COMPANY) |
| 2004 | 2003 | |||||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Cash and cash equivalents | $ | 207,849 | $ | 121,587 | ||
| Investments in fixed maturities, available-for-sale | 8,956,400 | 773,483 | ||||
| Investments in equity securities | — | 2,030,000 | ||||
| Short term investments | 1,012,182 | 2,494,742 | ||||
| Investments in affiliated companies | 58,936,521 | 52,597,051 | ||||
| Other investments | 819,936 | 829,123 | ||||
| Other receivables | 237,798 | 1,756,867 | ||||
| Deferred income taxes, net | 33,189 | 62,046 | ||||
| Income taxes receivable | 2,123,917 | 1,327,456 | ||||
| Prepaid expenses and other assets | 45,713 | 16,927 | ||||
| Property, net | 2,085,822 | 2,108,948 | ||||
| Total Assets | $ | 74,459,327 | $ | 64,118,230 | ||
| Liabilities and Stockholders’ Equity Liabilities: |
||||||
| Accounts payable and accrued liabilities | $ | 1,952,056 | $ | 929,484 | ||
| Stockholders’ Equity: | ||||||
| Class A Junior Participating preferred stock - no par value (shares authorized 100,000; no shares issued) |
— | — | ||||
| Common stock-no par (shares authorized 10,000,000; 2,481,024 and 2,503,923 shares issued and outstanding 2004 and 2003, respectively, excluding 374,720 and 351,821 shares 2004 and 2003, respectively, of common stock held by the Company’s subsidiary) |
1 | 1 | ||||
| Retained earnings | 69,272,092 | 59,756,927 | ||||
| Accumulated other comprehensive income (net of deferred taxes: 2004: $1,663,447; 2003: $1,768,477) |
3,235,178 | 3,431,818 | ||||
| Total stockholders’ equity | 72,507,271 | 63,188,746 | ||||
| Total Liabilities and Stockholders’ Equity | $ | 74,459,327 | $ | 64,118,230 | ||
| See notes to condensed financial statements. | |
| SCHEDULE II |
INVESTORS TITLE COMPANY (PARENT COMPANY) |
| 2004 | 2003 | 2002 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenues: | |||||||||
| Investment income-interest and dividends | $ | 124,421 | $ | 96,952 | $ | 91,619 | |||
| Net realized loss on sales of investments | (12,500 | ) |
— |
— |
|||||
| Rental income | 519,991 | 503,031 | 516,018 | ||||||
| Miscellaneous income | 69,274 | 11,000 | 5,017 | ||||||
| Total | 701,186 | 610,983 | 612,654 | ||||||
| Operating Expenses: | |||||||||
| Office occupancy and operations | 285,903 | 242,861 | 247,244 | ||||||
| Business development | 42,953 | 31,098 | 24,077 | ||||||
| Taxes-other than payroll and income | 75,649 | 65,461 | 61,107 | ||||||
| Professional fees | 60,161 | 52,758 | 63,490 | ||||||
| Other expenses | 59,738 | 47,635 | 45,332 | ||||||
| Total | 524,404 | 439,813 | 441,250 | ||||||
| Equity in Net Income of Affiliated Cos.* | 10,583,384 | 10,850,844 | 7,991,438 | ||||||
| Income Before Income Taxes | 10,760,166 | 11,022,014 | 8,162,842 | ||||||
| Provision for Income Taxes | 41,000 | 57,000 | 54,000 | ||||||
| Net Income | $ | 10,719,166 | $ | 10,965,014 | $ | 8,108,842 | |||
| Basic Earnings per Common Share | $ | 4.29 | $ | 4.38 | $ | 3.22 | |||
| Weighted Average Shares Outstanding-Basic | 2,496,711 | 2,503,659 | 2,517,328 | ||||||
| Diluted Earnings Per Common Share | $ | 4.09 | $ | 4.18 | $ | 3.12 | |||
| Weighted Average Shares Outstanding-Diluted | 2,620,916 | 2,624,473 | 2,597,979 | ||||||
| * Eliminated in consolidation | |
| See notes to condensed financial statements. | |
| SCHEDULE II |
INVESTORS TITLE COMPANY (PARENT COMPANY) |
| 2004 | 2003 | 2002 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Operating Activities: | |||||||||
| Net income | $ | 10,719,166 | $ | 10,965,014 | $ | 8,108,842 | |||
| Adjustments
to reconcile net income to net cash provided by operating activities: |
|||||||||
| Equity in net earnings of subsidiaries | (10,583,384 | ) | (10,850,843 | ) | (7,991,439 | ) | |||
| Depreciation | 73,452 | 70,944 | 72,467 | ||||||
| Amortization, net | 5,719 | 10,601 | 11,977 | ||||||
| Net gain on disposals of property | — | — | (532 | ) | |||||
| Net realized loss on sales of investments | 12,500 | — | — | ||||||
| Provision (benefit) for deferred income taxes | 59,000 | (12,000 | ) | (6,000 | ) | ||||
| (Increase) decrease in receivables | 1,519,069 | (1,446,089 | ) | 4,567 | |||||
| Increase in income taxes receivable-current | (796,461 | ) | (1,327,456 | ) | — | ||||
| (Increase) decrease in prepaid expenses | (28,786 | ) | 2,714 | 32,884 | |||||
| Increase (decrease) in accounts payable and accrued liabilities | (5,357 | ) | 454,097 | 138,300 | |||||
| Decrease in income taxes payable-current | — | (232,325 | ) | (157,772 | ) | ||||
|
|
|
|
|||||||
| Net cash provided by (used in) operating activities | 974,918 | (2,365,343 | ) | 213,294 | |||||
|
|
|
|
|||||||
| Investing Activities: | |||||||||
| Capital contribution to subsidiaries | (1,783,000 | ) | (325,000 | ) | — | ||||
| Dividends received from subsidiaries | 5,050,819 | 3,782,400 | 3,177,772 | ||||||
| Purchases of available-for-sale securities | (19,518,900 | ) | (2,000,000 | ) | — | ||||
| Purchases of short term securities | (1,012,182 | ) | — | (3,599,095 | ) | ||||
| Purchases of and net earnings from other investments | — | (486,000 | ) | (385,195 | ) | ||||
| Proceeds from sales and maturities of available-for-sale securities | 13,267,500 | 250,000 | 597,962 | ||||||
| Proceeds from sales of short term securities | 2,494,742 | 1,486,879 | — | ||||||
| Proceeds from sales and distributions from other investments | 9,187 | 42,072 | — | ||||||
| Purchases of property | (50,326 | ) | (105,048 | ) | (8,157 | ) | |||
| Proceeds from sales of property | — | — | 10,000 | ||||||
| Net change in pending trades | 1,027,929 | — | — | ||||||
|
|
|
|
|||||||
| Net cash provided by (used in) investing activities | (514,231 | ) | 2,645,303 | (206,713 | ) | ||||
|
|
|
|
|||||||
| Financing Activities: | |||||||||
| Dividends paid (net dividends paid to subsidiary of $53,936 in 2004 and $42,278 in 2003) | (374,425 | ) | (300,411 | ) | (300,557 | ) | |||
|
|
|
|
|||||||
| Net cash used in financing activities | (374,425 | ) | (300,411 | ) | (300,557 | ) | |||
|
|
|
|
|||||||
| Net Increase (Decrease) in Cash and Cash Equivalents | 86,262 | (20,451 | ) | (293,976 | ) | ||||
| Cash and Cash Equivalents, Beginning of Year | 121,587 | 142,038 | 436,014 | ||||||
|
|
|
|
|||||||
| Cash and Cash Equivalents, End of Year | $ | 207,849 | $ | 121,587 | $ | 142,038 | |||
|
|
|
|
|||||||
| Supplemental Disclosures: | |||||||||
| Cash Paid During the Year For: | |||||||||
| Income Taxes | $ | 781,000 | $ | 1,639,000 | $ | 218,000 | |||
|
|
|
|
|||||||
| See notes to condensed financial statements. |
SCHEDULE II
INVESTORS TITLE COMPANY (PARENT COMPANY)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NOTES TO CONDENSED FINANCIAL STATEMENTS
|
1. |
The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto of Investors Title Company and Subsidiaries. |
|
2. |
Cash dividends paid to Investors Title Company by its wholly owned subsidiary were as follows: |
|
Subsidiaries |
2004 |
2003 |
2002 |
|
|
|
|
|
|
|
|
|
|
|
Investors Title Insurance Company, net * |
$3,950,819 |
$3,307,400 |
$2,857,772 |
|
Investors Title Exchange Corporation |
1,100,000 |
175,000 |
160,000 |
|
Investors Title Accommodation Corporation |
- |
100,000 |
100,000 |
|
Investors Title Management Services, Inc. |
- |
200,000 |
60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
$ 5,050,819 |
$ 3,782,400 |
$ 3,177,772 |
|
|
|
|
|
*Total dividends of $4,004,755 and $3,349,678 paid to the Parent Company in 2004 and 2003, respectively, netted with dividends of $53,936 and $42,278 received from the Parent in 2004 and 2003, respectively.
| SCHEDULE III |
INVESTORS TITLE COMPANY AND SUBSIDIARIES |
| Segment | Deferred Policy Acquisition Cost |
Future Policy Benefits, Losses, Claims and Loss Expenses |
Unearned Premiums |
Other Policy Claims and Benefits Payable |
Premium Revenue |
Net Investment Income |
Benefits Claims, Losses and Settlement Expenses |
Amortization of Deferred Policy Acquisition Costs |
Other Operating Expenses |
Premiums Written |
|||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year Ended | |||||||||||||||||||||||||
| December 31, 2004 | |||||||||||||||||||||||||
| Title Insurance | — | $ | 31,842,000 | — | $ | 551,662 | $ | 71,775,157 | $ | 2,597,355 | $ | 7,984,339 | — | $ | 53,456,152 | N/A | |||||||||
| Exchange Services | — | — | — | — | — | 7,821 | — | — | 640,183 | N/A | |||||||||||||||
| All Other | — | — | — | — | — | 147,662 | — | — | 2,258,336 | N/A | |||||||||||||||
| — | $ | 31,842,000 | — | $ | 551,662 | $ | 71,775,157 | $ | 2,752,838 | $ | 7,984,339 | — | $ | 56,354,671 | |||||||||||
| Year Ended | |||||||||||||||||||||||||
| December 31, 2003 | |||||||||||||||||||||||||
| Title Insurance | — | $ | 30,031,000 | — | $ | 726,191 | $ | 83,927,312 | $ | 2,589,228 | $ | 9,292,739 | — | $ | 63,495,050 | N/A | |||||||||
| Exchange Services | — | — | — | — | — | 2,818 | — | — | 495,119 | N/A | |||||||||||||||
| All Other | — | — | — | — | — | 99,641 | — | — | 1,375,949 | N/A | |||||||||||||||
| — | $ | 30,031,000 | — | $ | 726,191 | $ | 83,927,312 | $ | 2,691,687 | $ | 9,292,739 | — | $ | 65,366,118 | |||||||||||
| Year Ended | |||||||||||||||||||||||||
| December 31, 2002 | |||||||||||||||||||||||||
| Title Insurance | — | $ | 25,630,000 | — | $ | 401,040 | $ | 67,298,617 | $ | 2,706,887 | $ | 6,871,822 | — | $ | 52,772,680 | N/A | |||||||||
| Exchange Services | — | — | — | — | — | 6,114 | — | — | 441,386 | N/A | |||||||||||||||
| All Other | — | — | — | — | — | 93,807 | — | — | 1,097,610 | N/A | |||||||||||||||
| — | $ | 25,630,000 | — | $ | 401,040 | $ | 67,298,617 | $ | 2,806,808 | $ | 6,871,822 | — | $ | 54,311,676 | |||||||||||
| SCHEDULE IV |
INVESTORS TITLE COMPANY AND SUBSIDIARIES |
| Gross Amount |
Ceded to Other Companies |
Assumed from Other Companies |
Net Amount |
Percentage of Amount Assumed to Net |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| YEAR ENDED | ||||||||||||||
| DECEMBER 31, 2004 | ||||||||||||||
| Title Insurance | $ | 72,063,833 | $ | 294,639 | $ | 5,963 | $ | 71,775,157 | 0.01 | % | ||||
| YEAR ENDED | ||||||||||||||
| DECEMBER 31, 2003 | ||||||||||||||
| Title Insurance | $ | 84,359,310 | $ | 438,229 | $ | 6,231 | $ | 83,927,312 | 0.01 | % | ||||
| YEAR ENDED | ||||||||||||||
| DECEMBER 31, 2002 | ||||||||||||||
| Title Insurance | $ | 67,626,272 | $ | 348,395 | $ | 20,740 | $ | 67,298,617 | 0.03 | % | ||||
| SCHEDULE V |
INVESTORS TITLE COMPANY AND SUBSIDIARIES |
| Description | Balance at Beginning of Period |
Additions Charged to Costs and Expenses |
Additions Charged to Other Accounts - Describe |
Deductions- describe* |
Balance at End of Period |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 | |||||||||||||||
| Premiums Receivable Valuation Provision |
$ | 2,474,000 | $ | 5,745,114 | $ | — | $ | (5,979,114 | ) | $ | 2,240,000 | ||||
| Reserves for Claims | $ | 30,031,000 | $ | 7,984,339 | $ | — | $ | (6,173,339 | ) | $ | 31,842,000 | ||||
| 2003 | |||||||||||||||
| Premiums Receivable Valuation Provision |
$ | 1,800,000 | $ | 5,477,324 | $ | — | $ | (4,803,324 | ) | $ | 2,474,000 | ||||
| Reserves for Claims | $ | 25,630,000 | $ | 9,292,739 | $ | — | $ | (4,891,739 | ) | $ | 30,031,000 | ||||
| 2002 | |||||||||||||||
| Premiums Receivable Valuation Provision |
$ | 1,405,000 | $ | 4,600,806 | $ | — | $ | (4,205,806 | ) | $ | 1,800,000 | ||||
| Reserves for Claims | $ | 21,460,000 | $ | 6,871,822 | $ | — | $ | (2,701,822 | ) | $ | 25,630,000 | ||||
| *Cancelled premiums and change in allowance for bad debts |
| *Payments of claims, net of recoveries |
|
INDEX TO EXHIBITS |
| Exhibit Number |
Description |
| 3(i) | Articles of Incorporation dated January 22, 1973, incorporated by reference to Exhibit 1 to Form 10 dated June 12, 1984 |
| 3(ii) | Bylaws – Restated and Amended as of May 21, 2003, incorporated by reference to Exhibit 3(ii) to Form 10-K for the year ended December 31, 2003 |
| 4 | Rights Agreement, dated as of November 12, 2002, between Investors Title Company and Central Carolina Bank, a division of National Bank of Commerce, incorporated by reference to Exhibit 1 to Form 8-A filed November 15, 2002 |
| 10(i) | 1993 Incentive Stock Option Plan, incorporated by reference to Exhibit 10 to Form 10-K for the year ended December 31, 1993 |
| 10(ii) | Form of Incentive Stock Option Agreement under 1993 Incentive Stock Option Plan, incorporated by reference to Exhibit 10(v) to Form 10-K for the year ended December 31, 1994 |
| 10(iii) | 1997 Stock Option and Restricted Stock Plan, incorporated by reference to Exhibit 10(viii) to Form 10-K for the year ended December 31, 1996 |
| 10(iv) | Form of Nonqualified Stock Option Agreement to Non-employee Directors dated May 13, 1997 under the 1997 Stock Option and Restricted Stock Plan, incorporated by reference to Exhibit 10(ix) to Form 10-Q for the quarter ended June 30, 1997 |
| 10(v) | Form of Nonqualified Stock Option Agreement under 1997 Stock Option and Restricted Stock Plan, incorporated by reference to Exhibit 10(x) to Form 10-K for the year ended December 31, 1997 |
| 10(vi) | Form of Incentive Stock Option Agreement under 1997 Stock Option and Restricted Stock Plan, incorporated by reference to Exhibit 10(xi) to Form 10-K for the year ended December 31, 1997 |
| 10(vii) | Form of Amendment to Incentive Stock Option Agreement between Investors Title Company and James Allen Fine, James Allen Fine, Jr., William Morris Fine, George Abbitt Snead, Ralph Nichols Strayhorn, III and Raeford Wilder Wall, Jr., respectively, incorporated by reference to Exhibit 10(xii) to Form 10-Q for the quarter ended June 30, 2000 |
| 10(viii) | 2001 Stock Option and Restricted Stock Plan, incorporated by reference to Exhibit 10(xiii) to Form 10-K for the year ended December 31, 2000 |
| 10(ix) | Form of Employment Agreement dated November 17, 2003 with each of J. Allen Fine, James A. Fine, Jr. and W. Morris Fine, incorporated by reference to Exhibit 10(ix) to Form 10-K for the year ended December 31, 2003 |
| 10(x) | Amended and Restated Employment Agreement dated June 1, 2004 with J. Allen Fine, incorporated by reference to Exhibit 10(x) to Form 10-Q for the quarter ended June 30, 2004 |
| 10(xi) | Form of Amended and Restated Employment Agreement dated June 1, 2004 with each of James A. Fine, Jr. and W. Morris Fine, incorporated by reference to Exhibit 10(xi) to Form 10-Q for the quarter ended June 30, 2004 |
| 10(xii) | Nonqualified Deferred Compensation Plan dated June 1, 2004, incorporated by reference to Exhibit 10(xii) to Form 10-Q for the quarter ended June 30, 2004 |
| 10(xiii) | Nonqualified Supplemental Retirement Benefit Plan dated November 17, 2003, incorporated by reference to Exhibit 10(xiii) to Form 10-Q for the quarter ended June 30, 2004 |
| 10(xiv) | Death Benefit Plan Agreement dated April 1, 2004 with J. Allen Fine, incorporated by reference to Exhibit 10(xiv) to Form 10-Q for the quarter ended June 30, 2004 |
| 10(xv) | Death Benefit Plan Agreement dated May 19, 2004 with James A. Fine, Jr., incorporated by reference to Exhibit 10(xv) to Form 10-Q for the quarter ended June 30, 2004 |
| 13 | Portions of 2004 Annual Report to Shareholders incorporated by reference in this report as set forth in Parts I, II and IV hereof |
| 14 | Code of Business Conduct and Ethics, incorporated by reference to Exhibit 14 to Form 10-K for the year ended December 31, 2003 |
| 16 | Letter regarding Change in Certifying Accountant, incorporated by reference to Exhibit 16 to Form 8-K dated September 24, 2004 |
| 21 | Subsidiaries of Registrant, incorporated by reference to Exhibit 21 to Form 10-K for the year ended December 31, 2003 |
| 23 (a) | Consent of Dixon Hughes PLLC |
| 23 (b) | Consent of Deloitte & Touche LLP |
| 31(i) | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31(ii) | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |