North Carolina
|
56-1110199
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
Securities registered pursuant to section 12(b) of the Act:
|
Name of each exchange on which registered:
|
Common Stock, no par value
|
The NASDAQ Stock Market LLC
|
Rights to Purchase Series A Junior Participating Preferred Stock
|
The NASDAQ Stock Market LLC
|
•
|
the level of real estate transactions, the level of mortgage origination volumes (including refinancing) and changes to the insurance requirements of the participants in the secondary mortgage market, and the effect of these factors on the demand for title insurance;
|
•
|
changes in general economic, business, and political conditions, including the performance of the financial and real estate markets;
|
•
|
the possible inadequacy of provisions for claims to cover actual claim losses;
|
•
|
the incidence of fraud-related losses;
|
•
|
unanticipated adverse changes in securities markets, including interest rates, could result in material losses to the Company’s investments;
|
•
|
significant competition that the Company’s operating subsidiaries face, including the Company’s ability to develop and offer products and services that meet changing industry standards in a timely and cost-effective manner and expansion into new geographic locations;
|
•
|
the Company’s reliance upon the North Carolina and Texas markets for a significant portion of its premiums, comprising approximately 35.5% and 20.5% of premiums written, respectively;
|
•
|
compliance with government regulation, including pricing regulation, and significant changes to applicable regulations or in their application by regulators;
|
•
|
the impact of governmental oversight of compliance by service providers, including title insurance agents, with federal consumer financial laws;
|
•
|
possible downgrades from a rating agency, which could result in a loss of underwriting business;
|
•
|
the inability of the Company to manage, develop and implement technological advancements and prevent system interruptions or unauthorized system intrusions;
|
•
|
statutory requirements applicable to the Company’s insurance subsidiaries that require them to maintain minimum levels of capital, surplus and reserves and that restrict the amount of dividends they may pay to the Company without prior regulatory approval;
|
•
|
the desirability to maintain capital above statutory minimum requirements for competitive, marketing and other reasons;
|
•
|
heightened regulatory scrutiny and investigations of the title insurance industry;
|
•
|
the Company’s dependence on key management and marketing personnel, the loss of whom could have a material adverse effect on the Company’s business;
|
•
|
difficulty managing growth, whether organic or through acquisitions;
|
•
|
reform of government-sponsored entities that could adversely impact the Company;
|
•
|
policies and procedures for the mitigation of risks that may be insufficient to prevent losses;
|
•
|
the shareholder rights plan could discourage transactions involving actual or potential changes of control; and
|
•
|
other risks detailed elsewhere in this document and in the Company’s other filings with the SEC.
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position with Registrant
|
J. Allen Fine
|
|
82
|
|
Chief Executive Officer and Chairman of the Board
|
James A. Fine, Jr.
|
|
54
|
|
President, Treasurer, Chief Financial Officer, Chief Accounting Officer and Director
|
W. Morris Fine
|
|
50
|
|
Executive Vice President, Secretary and Director
|
•
|
licensing of insurers and agents;
|
•
|
capital and surplus requirements;
|
•
|
approval, regulation or establishment of premium rates for insurance;
|
•
|
limitations on types and amounts of investments;
|
•
|
limitations on the size of risks that may be insured by a single company;
|
•
|
filing of annual and other reports with respect to financial condition;
|
•
|
the amount of dividends and other payments made by insurance subsidiaries;
|
•
|
establishing reserves;
|
•
|
accounting and financing practices;
|
•
|
deposits of securities for the benefit of policyholders;
|
•
|
trade and marketing practices;
|
•
|
regulation of reinsurance;
|
•
|
approval of policy forms; and
|
•
|
use of personal information.
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
High
|
|
Low
|
|
Dividend Paid
|
|
High
|
|
Low
|
|
Dividend Paid
|
||||||||||||
First Quarter
|
$
|
99.89
|
|
|
$
|
76.35
|
|
|
$
|
0.16
|
|
|
$
|
81.75
|
|
|
$
|
66.55
|
|
|
$
|
0.08
|
|
Second Quarter
|
$
|
106.80
|
|
|
$
|
82.13
|
|
|
$
|
0.16
|
|
|
$
|
77.75
|
|
|
$
|
69.51
|
|
|
$
|
0.08
|
|
Third Quarter
|
$
|
102.70
|
|
|
$
|
88.70
|
|
|
$
|
0.20
|
|
|
$
|
72.50
|
|
|
$
|
67.25
|
|
|
$
|
0.08
|
|
Fourth Quarter
|
$
|
174.10
|
|
|
$
|
93.78
|
|
|
$
|
0.20
|
|
|
$
|
102.41
|
|
|
$
|
71.00
|
|
|
$
|
0.16
|
|
For the Year
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Net premiums written
|
$
|
122,095
|
|
|
$
|
112,476
|
|
|
$
|
109,964
|
|
|
$
|
113,886
|
|
|
$
|
102,331
|
|
Investment income
|
4,684
|
|
|
4,531
|
|
|
4,260
|
|
|
3,895
|
|
|
3,980
|
|
|||||
Revenues
|
138,492
|
|
|
127,200
|
|
|
123,119
|
|
|
126,251
|
|
|
115,079
|
|
|||||
Net income attributable to the Company
|
19,523
|
|
|
12,534
|
|
|
9,649
|
|
|
14,708
|
|
|
11,102
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share
|
$
|
10.23
|
|
|
$
|
6.32
|
|
|
$
|
4.75
|
|
|
$
|
7.15
|
|
|
$
|
5.33
|
|
Weighted average shares outstanding
–
Basic
|
1,908
|
|
|
1,984
|
|
|
2,032
|
|
|
2,056
|
|
|
2,082
|
|
|||||
Diluted earnings per common share
|
$
|
10.19
|
|
|
$
|
6.30
|
|
|
$
|
4.74
|
|
|
$
|
7.08
|
|
|
$
|
5.24
|
|
Weighted average shares outstanding
–
Diluted
|
1,915
|
|
|
1,990
|
|
|
2,038
|
|
|
2,077
|
|
|
2,117
|
|
|||||
Cash dividends per share
|
$
|
0.72
|
|
|
$
|
0.40
|
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At Year-End
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
$
|
228,938
|
|
|
$
|
211,522
|
|
|
$
|
198,039
|
|
|
$
|
188,306
|
|
|
$
|
171,918
|
|
Investments
|
160,854
|
|
|
160,552
|
|
|
159,411
|
|
|
142,764
|
|
|
130,779
|
|
|||||
Stockholders’ equity attributable to the Company
|
155,045
|
|
|
142,670
|
|
|
137,564
|
|
|
128,062
|
|
|
114,639
|
|
|||||
Book value/share attributable to the Company
|
82.28
|
|
|
73.17
|
|
|
67.99
|
|
|
62.86
|
|
|
56.10
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Performance Ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to the Company to:
|
|
|
|
|
|
|
|
|
|
||||||||||
Average stockholders’ equity attributable to the Company
|
13.12
|
%
|
|
8.95
|
%
|
|
7.27
|
%
|
|
12.12
|
%
|
|
10.04
|
%
|
|||||
Total revenues
|
14.10
|
%
|
|
9.85
|
%
|
|
7.84
|
%
|
|
11.65
|
%
|
|
9.65
|
%
|
Increase in Loss Ratio of three percentage points
|
$
|
(2,417,000
|
)
|
Decrease in Loss Ratio of three percentage points
|
$
|
2,417,000
|
|
•
|
the duration and extent to which the fair value has been less than cost;
|
•
|
with respect to equity securities, whether the Company’s ability and intent to retain the investment for a period of time is sufficient to allow for a recovery in value; and
|
•
|
with respect to fixed maturity securities, whether the Company has the intent to sell or will more likely than not be required to sell a particular security before recovery in value.
|
For the Years Ended December 31,
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Net premiums written
|
|
$
|
122,095,381
|
|
|
$
|
112,475,686
|
|
|
$
|
109,963,556
|
|
Investment income – interest and dividends
|
|
4,684,489
|
|
|
4,531,319
|
|
|
4,259,501
|
|
|||
Net realized gain (loss) on investments
|
|
768,436
|
|
|
(116,163
|
)
|
|
268,294
|
|
|||
Other
|
|
10,944,108
|
|
|
10,309,230
|
|
|
8,627,935
|
|
|||
Total Revenues
|
|
138,492,414
|
|
|
127,200,072
|
|
|
123,119,286
|
|
|||
|
|
|
|
|
|
|
||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
||||
Commissions to agents
|
|
63,643,321
|
|
|
62,174,301
|
|
|
65,632,353
|
|
|||
Provision for claims
|
|
242,953
|
|
|
4,478,494
|
|
|
5,229,716
|
|
|||
Salaries, employee benefits and payroll taxes
|
|
31,372,099
|
|
|
28,041,213
|
|
|
25,218,225
|
|
|||
Office occupancy and operations
|
|
6,265,908
|
|
|
5,885,336
|
|
|
5,049,962
|
|
|||
Business development
|
|
2,511,699
|
|
|
2,373,270
|
|
|
2,333,491
|
|
|||
Filing fees, franchise and local taxes
|
|
907,225
|
|
|
732,985
|
|
|
817,909
|
|
|||
Premium and retaliatory taxes
|
|
2,202,595
|
|
|
2,161,571
|
|
|
1,851,767
|
|
|||
Professional and contract labor fees
|
|
2,115,754
|
|
|
2,691,411
|
|
|
2,676,483
|
|
|||
Other
|
|
1,099,408
|
|
|
884,438
|
|
|
820,882
|
|
|||
Total Operating Expenses
|
|
110,360,962
|
|
|
109,423,019
|
|
|
109,630,788
|
|
|||
|
|
|
|
|
|
|
||||||
Income before Income Taxes
|
|
28,131,452
|
|
|
17,777,053
|
|
|
13,488,498
|
|
|||
|
|
|
|
|
|
|
||||||
Provision for Income Taxes
|
|
8,616,000
|
|
|
5,228,000
|
|
|
3,816,000
|
|
|||
|
|
|
|
|
|
|
||||||
Net Income Attributable to the Company
|
|
$
|
19,523,118
|
|
|
$
|
12,533,905
|
|
|
$
|
9,648,975
|
|
|
2016
|
|
%
|
|
2015
|
|
%
|
|
2014
|
|
%
|
|||||||||
Title Insurance
|
$
|
127,228,426
|
|
|
95.6
|
%
|
|
$
|
117,281,588
|
|
|
95.5
|
%
|
|
$
|
113,592,742
|
|
|
95.8
|
%
|
All Other
|
5,811,063
|
|
|
4.4
|
%
|
|
5,503,328
|
|
|
4.5
|
%
|
|
4,998,749
|
|
|
4.2
|
%
|
|||
Total
|
$
|
133,039,489
|
|
|
100.0
|
%
|
|
$
|
122,784,916
|
|
|
100.0
|
%
|
|
$
|
118,591,491
|
|
|
100.0
|
%
|
|
2016
|
|
%
|
|
2015
|
|
%
|
|
2014
|
|
%
|
|||||||||
Home and Branch
|
$
|
34,063,187
|
|
|
27.9
|
%
|
|
$
|
28,400,531
|
|
|
25.3
|
%
|
|
$
|
24,057,032
|
|
|
21.9
|
%
|
Agency
|
88,032,194
|
|
|
72.1
|
%
|
|
84,075,155
|
|
|
74.7
|
%
|
|
85,906,524
|
|
|
78.1
|
%
|
|||
Total
|
$
|
122,095,381
|
|
|
100.0
|
%
|
|
$
|
112,475,686
|
|
|
100.0
|
%
|
|
$
|
109,963,556
|
|
|
100.0
|
%
|
State
|
2016
|
|
2015
|
|
2014
|
||||||
North Carolina
|
$
|
43,439,451
|
|
|
$
|
36,921,195
|
|
|
$
|
31,264,486
|
|
Texas
|
25,088,421
|
|
|
25,211,496
|
|
|
40,139,495
|
|
|||
South Carolina
|
12,259,739
|
|
|
11,327,702
|
|
|
8,462,014
|
|
|||
Georgia
|
10,981,062
|
|
|
7,682,820
|
|
|
4,335,216
|
|
|||
Virginia
|
6,052,602
|
|
|
5,706,769
|
|
|
4,821,900
|
|
|||
All Others
|
24,397,802
|
|
|
25,806,768
|
|
|
21,042,470
|
|
|||
Premiums Written
|
122,219,077
|
|
|
112,656,750
|
|
|
110,065,581
|
|
|||
Reinsurance Assumed
|
17,246
|
|
|
33,603
|
|
|
37,992
|
|
|||
Reinsurance Ceded
|
(140,942
|
)
|
|
(214,667
|
)
|
|
(140,017
|
)
|
|||
Net Premiums Written
|
$
|
122,095,381
|
|
|
$
|
112,475,686
|
|
|
$
|
109,963,556
|
|
|
2016
|
|
%
|
|
2015
|
|
%
|
|
2014
|
|
%
|
|||||||||
Title Insurance
|
$
|
103,828,173
|
|
|
94.1
|
%
|
|
$
|
102,895,701
|
|
|
94.0
|
%
|
|
$
|
103,850,090
|
|
|
94.7
|
%
|
All Other
|
6,532,789
|
|
|
5.9
|
%
|
|
6,527,318
|
|
|
6.0
|
%
|
|
5,780,698
|
|
|
5.3
|
%
|
|||
Total
|
$
|
110,360,962
|
|
|
100.0
|
%
|
|
$
|
109,423,019
|
|
|
100.0
|
%
|
|
$
|
109,630,788
|
|
|
100.0
|
%
|
|
|
|
Payments due by period
|
||||||||||||||||
Contractual Obligations Including Off-Balance Sheet Arrangements
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Reserve for claims
|
$
|
35,305,000
|
|
|
$
|
6,319,595
|
|
|
$
|
9,991,315
|
|
|
$
|
6,707,950
|
|
|
$
|
12,286,140
|
|
Obligations under executive employment plans and agreements
|
8,989,061
|
|
|
230,176
|
|
|
38,958
|
|
|
46,131
|
|
|
8,673,796
|
|
|||||
Operating lease obligations
|
3,417,975
|
|
|
932,831
|
|
|
1,158,771
|
|
|
772,712
|
|
|
553,661
|
|
|||||
Other obligations
|
1,146,276
|
|
|
858,104
|
|
|
233,172
|
|
|
55,000
|
|
|
—
|
|
|||||
Total
|
$
|
48,858,312
|
|
|
$
|
8,340,706
|
|
|
$
|
11,422,216
|
|
|
$
|
7,581,793
|
|
|
$
|
21,513,597
|
|
2016
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net premiums written
|
$
|
21,508,997
|
|
|
$
|
29,790,232
|
|
|
$
|
36,511,373
|
|
|
$
|
34,284,779
|
|
Net income
|
1,804,461
|
|
|
4,530,047
|
|
|
8,129,167
|
|
|
5,051,777
|
|
||||
Net income attributable to the Company
|
1,814,040
|
|
|
4,529,380
|
|
|
8,126,939
|
|
|
5,052,759
|
|
||||
Basic earnings per common share
|
0.94
|
|
|
2.36
|
|
|
4.30
|
|
|
2.68
|
|
||||
Diluted earnings per common share
|
0.93
|
|
|
2.35
|
|
|
4.29
|
|
|
2.67
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2015
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net premiums written
|
$
|
24,962,041
|
|
|
$
|
30,464,581
|
|
|
$
|
30,945,532
|
|
|
$
|
26,103,532
|
|
Net income
|
1,726,124
|
|
|
4,120,497
|
|
|
4,495,498
|
|
|
2,206,934
|
|
||||
Net income attributable to the Company
|
1,726,124
|
|
|
4,120,497
|
|
|
4,490,962
|
|
|
2,196,322
|
|
||||
Basic earnings per common share
|
0.86
|
|
|
2.06
|
|
|
2.28
|
|
|
1.13
|
|
||||
Diluted earnings per common share
|
0.86
|
|
|
2.05
|
|
|
2.28
|
|
|
1.12
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2014
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net premiums written
|
$
|
24,909,252
|
|
|
$
|
29,849,853
|
|
|
$
|
26,356,835
|
|
|
$
|
28,847,616
|
|
Net income
|
985,515
|
|
|
3,398,044
|
|
|
2,594,490
|
|
|
2,694,449
|
|
||||
Net income attributable to the Company
|
986,438
|
|
|
3,373,598
|
|
|
2,594,490
|
|
|
2,694,449
|
|
||||
Basic earnings per common share
|
0.48
|
|
|
1.66
|
|
|
1.28
|
|
|
1.33
|
|
||||
Diluted earnings per common share
|
0.48
|
|
|
1.65
|
|
|
1.28
|
|
|
1.33
|
|
As of December 31,
|
2016
|
|
2015
|
||||
Assets:
|
|
|
|
||||
Investments in securities:
|
|
|
|
||||
Fixed maturities, available-for-sale, at fair value (amortized cost: 2016: $100,162,357; 2015: $102,015,826)
|
$
|
101,934,077
|
|
|
$
|
106,066,384
|
|
Equity securities, available-for-sale, at fair value (cost: 2016: $24,836,032; 2015: $23,855,873)
|
41,179,259
|
|
|
37,513,464
|
|
||
Short-term investments
|
6,558,840
|
|
|
6,865,406
|
|
||
Other investments
|
11,181,531
|
|
|
10,106,828
|
|
||
Total investments
|
160,853,707
|
|
|
160,552,082
|
|
||
|
|
|
|
||||
Cash and cash equivalents
|
27,928,472
|
|
|
21,790,068
|
|
||
Premium and fees receivable
|
8,654,161
|
|
|
8,392,697
|
|
||
Accrued interest and dividends
|
1,035,152
|
|
|
1,004,126
|
|
||
Prepaid expenses and other assets
|
9,456,523
|
|
|
11,413,520
|
|
||
Property, net
|
8,753,466
|
|
|
7,148,951
|
|
||
Goodwill and other intangible assets, net
|
12,256,641
|
|
|
1,220,585
|
|
||
Total Assets
|
$
|
228,938,122
|
|
|
$
|
211,522,029
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
||
Reserve for claims
|
$
|
35,305,000
|
|
|
$
|
37,788,000
|
|
Accounts payable and accrued liabilities
|
26,146,480
|
|
|
25,043,588
|
|
||
Current income taxes payable
|
1,232,432
|
|
|
210,355
|
|
||
Deferred income taxes, net
|
11,118,256
|
|
|
5,703,006
|
|
||
Total liabilities
|
73,802,168
|
|
|
68,744,949
|
|
||
|
|
|
|
||||
Commitments and Contingencies
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Stockholders’ Equity:
|
|
|
|
|
|
||
Preferred stock (1,000,000 authorized shares; no shares issued)
|
—
|
|
|
—
|
|
||
Common stock
–
no par value (10,000,000 authorized shares; 1,884,283 and 1,949,797 shares issued and outstanding 2016 and 2015, respectively, excluding 291,676 shares for 2016 and 2015 of common stock held by the Company’s subsidiary)
|
1
|
|
|
1
|
|
||
Retained earnings
|
143,283,621
|
|
|
131,186,866
|
|
||
Accumulated other comprehensive income
|
11,761,447
|
|
|
11,483,015
|
|
||
Total stockholders’ equity attributable to the Company
|
155,045,069
|
|
|
142,669,882
|
|
||
Noncontrolling interests
|
90,885
|
|
|
107,198
|
|
||
Total stockholders’ equity
|
$
|
155,135,954
|
|
|
$
|
142,777,080
|
|
Total Liabilities and Stockholders’ Equity
|
$
|
228,938,122
|
|
|
$
|
211,522,029
|
|
For the Years Ended December 31,
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Net premiums written
|
|
$
|
122,095,381
|
|
|
$
|
112,475,686
|
|
|
$
|
109,963,556
|
|
Investment income – interest and dividends
|
|
4,684,489
|
|
|
4,531,319
|
|
|
4,259,501
|
|
|||
Net realized gain (loss) on investments
|
|
768,436
|
|
|
(116,163
|
)
|
|
268,294
|
|
|||
Other
|
|
10,944,108
|
|
|
10,309,230
|
|
|
8,627,935
|
|
|||
Total Revenues
|
|
138,492,414
|
|
|
127,200,072
|
|
|
123,119,286
|
|
|||
|
|
|
|
|
|
|
||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
||||
Commissions to agents
|
|
63,643,321
|
|
|
62,174,301
|
|
|
65,632,353
|
|
|||
Provision for claims
|
|
242,953
|
|
|
4,478,494
|
|
|
5,229,716
|
|
|||
Salaries, employee benefits and payroll taxes
|
|
31,372,099
|
|
|
28,041,213
|
|
|
25,218,225
|
|
|||
Office occupancy and operations
|
|
6,265,908
|
|
|
5,885,336
|
|
|
5,049,962
|
|
|||
Business development
|
|
2,511,699
|
|
|
2,373,270
|
|
|
2,333,491
|
|
|||
Filing fees, franchise and local taxes
|
|
907,225
|
|
|
732,985
|
|
|
817,909
|
|
|||
Premium and retaliatory taxes
|
|
2,202,595
|
|
|
2,161,571
|
|
|
1,851,767
|
|
|||
Professional and contract labor fees
|
|
2,115,754
|
|
|
2,691,411
|
|
|
2,676,483
|
|
|||
Other
|
|
1,099,408
|
|
|
884,438
|
|
|
820,882
|
|
|||
Total Operating Expenses
|
|
110,360,962
|
|
|
109,423,019
|
|
|
109,630,788
|
|
|||
|
|
|
|
|
|
|
||||||
Income before Income Taxes
|
|
28,131,452
|
|
|
17,777,053
|
|
|
13,488,498
|
|
|||
|
|
|
|
|
|
|
|
|||||
Provision for Income Taxes
|
|
8,616,000
|
|
|
5,228,000
|
|
|
3,816,000
|
|
|||
|
|
|
|
|
|
|
|
|||||
Net Income
|
|
19,515,452
|
|
|
12,549,053
|
|
|
9,672,498
|
|
|||
|
|
|
|
|
|
|
|
|||||
Net Loss (Income) Attributable to Noncontrolling Interests
|
|
7,666
|
|
|
(15,148
|
)
|
|
(23,523
|
)
|
|||
|
|
|
|
|
|
|
|
|||||
Net Income Attributable to the Company
|
|
$
|
19,523,118
|
|
|
$
|
12,533,905
|
|
|
$
|
9,648,975
|
|
|
|
|
|
|
|
|
|
|||||
Basic Earnings per Common Share
|
|
$
|
10.23
|
|
|
$
|
6.32
|
|
|
$
|
4.75
|
|
|
|
|
|
|
|
|
|
|||||
Weighted Average Shares Outstanding – Basic
|
|
1,907,675
|
|
|
1,984,360
|
|
|
2,031,760
|
|
|||
|
|
|
|
|
|
|
|
|||||
Diluted Earnings per Common Share
|
|
$
|
10.19
|
|
|
$
|
6.30
|
|
|
$
|
4.74
|
|
|
|
|
|
|
|
|
|
|||||
Weighted Average Shares Outstanding – Diluted
|
|
1,915,057
|
|
|
1,989,799
|
|
|
2,037,534
|
|
|||
|
|
|
|
|
|
|
|
|||||
Cash Dividends Paid per Common Share
|
|
$
|
0.72
|
|
|
$
|
0.40
|
|
|
$
|
0.32
|
|
For the Years Ended December 31,
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
|
$
|
19,515,452
|
|
|
$
|
12,549,053
|
|
|
$
|
9,672,498
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
|
||||
Amortization related to prior year service cost
|
|
—
|
|
|
4,390
|
|
|
2,217
|
|
|||
Amortization of unrecognized loss
|
|
8,941
|
|
|
3,514
|
|
|
—
|
|
|||
Accumulated postretirement benefit obligation adjustment
|
|
(566
|
)
|
|
(63,566
|
)
|
|
(47,121
|
)
|
|||
Unrealized gains (losses) on investments arising during the period
|
|
1,145,529
|
|
|
(2,077,542
|
)
|
|
2,848,256
|
|
|||
Reclassification adjustment for sale of securities included in net income
|
|
(972,672
|
)
|
|
(718,837
|
)
|
|
(518,279
|
)
|
|||
Reclassification adjustment for write-down of securities included in net income
|
|
233,941
|
|
|
751,059
|
|
|
14,542
|
|
|||
Other comprehensive income (loss), before tax
|
|
415,173
|
|
|
(2,100,982
|
)
|
|
2,299,615
|
|
|||
Income tax expense (benefit) related to postretirement health benefits
|
|
2,849
|
|
|
(18,924
|
)
|
|
(15,269
|
)
|
|||
Income tax expense (benefit) related to unrealized gains (losses) on investments arising during the year
|
|
387,508
|
|
|
(722,226
|
)
|
|
974,145
|
|
|||
Income tax benefit related to reclassification adjustment for sale of securities included in net income
|
|
(333,426
|
)
|
|
(245,200
|
)
|
|
(173,403
|
)
|
|||
Income tax expense related to reclassification adjustment for write-down of securities included in net income
|
|
79,810
|
|
|
258,862
|
|
|
5,037
|
|
|||
Net income tax expense (benefit) on other comprehensive income (loss)
|
|
136,741
|
|
|
(727,488
|
)
|
|
790,510
|
|
|||
Other comprehensive income (loss)
|
|
278,432
|
|
|
(1,373,494
|
)
|
|
1,509,105
|
|
|||
Comprehensive Income
|
|
$
|
19,793,884
|
|
|
$
|
11,175,559
|
|
|
$
|
11,181,603
|
|
Less: Comprehensive loss (income) attributable to noncontrolling interests
|
|
7,666
|
|
|
(15,148
|
)
|
|
(23,523
|
)
|
|||
Comprehensive Income Attributable to the Company
|
|
$
|
19,801,550
|
|
|
$
|
11,160,411
|
|
|
$
|
11,158,080
|
|
|
Common Stock
|
|
Retained Earnings
|
|
|
Accumulated
Other Comprehensive Income |
|
|
Noncontrolling Interests
|
|
|
Total
Stockholders’ Equity |
|
|||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, January 1, 2014
|
2,037,135
|
|
|
$
|
1
|
|
|
$
|
116,714,749
|
|
|
$
|
11,347,404
|
|
|
$
|
—
|
|
|
$
|
128,062,154
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
9,648,975
|
|
|
|
|
|
|
|
9,648,975
|
|
||||||
Dividends ($0.32 per share)
|
|
|
|
|
|
|
(650,433
|
)
|
|
|
|
|
|
|
(650,433
|
)
|
||||||
Shares of common stock repurchased and retired
|
(15,372
|
)
|
|
|
|
|
(1,055,765
|
)
|
|
|
|
|
|
|
(1,055,765
|
)
|
||||||
Stock options and stock appreciation rights exercised
|
1,507
|
|
|
|
|
|
27,100
|
|
|
|
|
|
|
|
27,100
|
|
||||||
Share-based compensation expense
|
|
|
|
|
|
|
120,891
|
|
|
|
|
|
|
|
120,891
|
|
||||||
Amortization related to postretirement health benefits
|
|
|
|
|
|
|
|
|
|
1,465
|
|
|
|
|
1,465
|
|
||||||
Accumulated postretirement benefit obligation adjustment
|
|
|
|
|
|
|
(31,100
|
)
|
|
|
|
(31,100
|
)
|
|||||||||
Net unrealized gain on investments
|
|
|
|
|
|
|
|
|
|
1,538,740
|
|
|
|
|
1,538,740
|
|
||||||
Purchase of minority-interest of subsidiary
|
|
|
|
|
(114,320
|
)
|
|
|
|
|
|
(114,320
|
)
|
|||||||||
Income tax benefit from share-based compensation
|
|
|
|
|
15,999
|
|
|
|
|
|
|
|
15,999
|
|
||||||||
Balance, December 31, 2014
|
2,023,270
|
|
|
$
|
1
|
|
|
$
|
124,707,196
|
|
|
$
|
12,856,509
|
|
|
$
|
—
|
|
|
$
|
137,563,706
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
12,533,905
|
|
|
|
|
|
|
|
12,533,905
|
|
||||||
Dividends ($0.40 per share)
|
|
|
|
|
|
|
(789,907
|
)
|
|
|
|
|
|
|
(789,907
|
)
|
||||||
Shares of common stock repurchased and retired
|
(75,665
|
)
|
|
|
|
|
(5,483,953
|
)
|
|
|
|
|
|
|
(5,483,953
|
)
|
||||||
Stock options and stock appreciation rights exercised
|
2,192
|
|
|
|
|
|
54,988
|
|
|
|
|
|
|
|
54,988
|
|
||||||
Share-based compensation expense
|
|
|
|
|
|
|
137,762
|
|
|
|
|
|
|
|
137,762
|
|
||||||
Amortization related to postretirement health benefits
|
|
|
|
|
|
|
|
|
|
5,216
|
|
|
|
|
5,216
|
|
||||||
Accumulated postretirement benefit obligation adjustment
|
|
|
|
|
|
|
(41,954
|
)
|
|
|
|
(41,954
|
)
|
|||||||||
Net unrealized loss on investments
|
|
|
|
|
|
|
|
|
|
(1,336,756
|
)
|
|
|
|
(1,336,756
|
)
|
||||||
Net effect changes of ownership
|
|
|
|
|
|
|
|
|
127,050
|
|
|
127,050
|
|
|||||||||
Subsidiary return of capital
|
|
|
|
|
|
|
|
|
(35,000
|
)
|
|
(35,000
|
)
|
|||||||||
Net income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
15,148
|
|
|
15,148
|
|
|||||||||
Income tax benefit from share-based compensation
|
|
|
|
|
|
|
26,875
|
|
|
|
|
|
|
|
26,875
|
|
||||||
Balance, December 31, 2015
|
1,949,797
|
|
|
$
|
1
|
|
|
$
|
131,186,866
|
|
|
$
|
11,483,015
|
|
|
$
|
107,198
|
|
|
$
|
142,777,080
|
|
Net income attributable to the Company
|
|
|
|
|
|
|
19,523,118
|
|
|
|
|
|
|
|
19,523,118
|
|
||||||
Dividends ($0.72 per share)
|
|
|
|
|
|
|
(1,370,390
|
)
|
|
|
|
|
|
|
(1,370,390
|
)
|
||||||
Shares of common stock repurchased and retired
|
(66,803
|
)
|
|
|
|
|
(6,219,670
|
)
|
|
|
|
|
|
|
(6,219,670
|
)
|
||||||
Stock options and stock appreciation rights exercised
|
1,289
|
|
|
|
|
|
(200
|
)
|
|
|
|
|
|
|
(200
|
)
|
||||||
Share-based compensation expense
|
|
|
|
|
|
|
132,098
|
|
|
|
|
|
|
|
132,098
|
|
||||||
Amortization related to postretirement health benefits
|
|
|
|
|
|
|
|
|
5,900
|
|
|
|
|
5,900
|
|
|||||||
Accumulated postretirement benefit obligation adjustment
|
|
|
|
|
|
|
|
|
(374
|
)
|
|
|
|
(374
|
)
|
|||||||
Net unrealized gain on investments
|
|
|
|
|
|
|
|
|
|
272,906
|
|
|
|
|
272,906
|
|
||||||
Purchase of noncontrolling interest of subsidiary
|
|
|
|
|
|
|
|
|
(8,647
|
)
|
|
(8,647
|
)
|
|||||||||
Additional paid-in capital from purchase of noncontrolling interest of subsidiary
|
|
|
|
|
(494
|
)
|
|
|
|
|
|
(494
|
)
|
For the Years Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
19,515,452
|
|
|
$
|
12,549,053
|
|
|
$
|
9,672,498
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation
|
1,306,643
|
|
|
1,105,839
|
|
|
833,104
|
|
|||
Amortization of investments, net
|
772,100
|
|
|
728,510
|
|
|
630,782
|
|
|||
Amortization of other intangible assets
|
213,795
|
|
|
—
|
|
|
—
|
|
|||
Amortization related to postretirement benefits obligation
|
8,941
|
|
|
7,904
|
|
|
2,217
|
|
|||
Share-based compensation expense related to stock appreciation rights and options
|
132,098
|
|
|
137,762
|
|
|
120,891
|
|
|||
Net (gain) loss on disposals of property
|
(12,439
|
)
|
|
(24,867
|
)
|
|
24,608
|
|
|||
Net realized (gain) loss on investments
|
(768,436
|
)
|
|
116,163
|
|
|
(268,294
|
)
|
|||
Net earnings from other investments
|
(1,750,485
|
)
|
|
(2,002,276
|
)
|
|
(1,450,980
|
)
|
|||
Provision for claims
|
242,953
|
|
|
4,478,494
|
|
|
5,229,716
|
|
|||
Provision for deferred income taxes
|
2,790,000
|
|
|
1,015,000
|
|
|
611,000
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
(Increase) decrease in receivables
|
(261,464
|
)
|
|
217,594
|
|
|
206,041
|
|
|||
Decrease (increase) in other assets
|
2,631,205
|
|
|
(4,879,418
|
)
|
|
(393,359
|
)
|
|||
Decrease in current income taxes recoverable
|
—
|
|
|
—
|
|
|
366,772
|
|
|||
(Decrease) increase in accounts payable and accrued liabilities
|
(581,518
|
)
|
|
6,689,204
|
|
|
(2,080,492
|
)
|
|||
Increase in current income taxes payable
|
1,022,077
|
|
|
118,163
|
|
|
92,192
|
|
|||
Payments of claims, net of recoveries
|
(2,725,953
|
)
|
|
(3,367,494
|
)
|
|
(3,912,716
|
)
|
|||
Net cash provided by operating activities
|
22,534,969
|
|
|
16,889,631
|
|
|
9,683,980
|
|
|||
|
|
|
|
|
|
||||||
Investing Activities
|
|
|
|
|
|
|
|
||||
Purchases of available-for-sale securities
|
(19,424,849
|
)
|
|
(20,164,353
|
)
|
|
(30,899,452
|
)
|
|||
Purchases of short-term securities
|
(1,775,239
|
)
|
|
(4,593,240
|
)
|
|
(911,188
|
)
|
|||
Purchases of other investments
|
(2,743,413
|
)
|
|
(3,717,978
|
)
|
|
(1,689,950
|
)
|
|||
Investment in subsidiary
|
(9,141
|
)
|
|
(72,600
|
)
|
|
—
|
|
|||
Proceeds from sales and maturities of available-for-sale securities
|
20,258,089
|
|
|
22,151,408
|
|
|
12,472,817
|
|
|||
Proceeds from sales and maturities of short-term securities
|
2,081,805
|
|
|
304,827
|
|
|
6,260,568
|
|
|||
Proceeds from sales and distributions of other investments
|
3,437,999
|
|
|
3,911,286
|
|
|
1,584,337
|
|
|||
Proceeds from sales of other assets
|
17,601
|
|
|
149,128
|
|
|
38,052
|
|
|||
Purchase of subsidiary, net of cash received
|
(8,316,155
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of redeemable noncontrolling interest of subsidiary
|
—
|
|
|
—
|
|
|
(515,275
|
)
|
|||
Purchases of property, equipment and software
|
(2,456,951
|
)
|
|
(2,742,619
|
)
|
|
(2,017,379
|
)
|
|||
Proceeds from disposals of property
|
91,656
|
|
|
75,060
|
|
|
24,400
|
|
|||
Net cash used in investing activities
|
(8,838,598
|
)
|
|
(4,699,081
|
)
|
|
(15,653,070
|
)
|
|||
|
|
|
|
|
|
||||||
Financing Activities
|
|
|
|
|
|
|
|
||||
Repurchases of common stock
|
(6,219,670
|
)
|
|
(5,483,953
|
)
|
|
(1,055,765
|
)
|
|||
Exercise of stock appreciation rights and options
|
(200
|
)
|
|
54,988
|
|
|
27,100
|
|
|||
Proceeds from note payable
|
6,000,000
|
|
|
—
|
|
|
—
|
|
|||
Payments on note payable
|
(6,000,000
|
)
|
|
—
|
|
|
—
|
|
|||
Distribution to noncontrolling interest
|
—
|
|
|
—
|
|
|
(168,057
|
)
|
|||
Subsidiary return of capital
|
—
|
|
|
(35,000
|
)
|
|
—
|
|
|||
Excess tax benefits related to exercise of stock options and SARs
|
32,293
|
|
|
26,875
|
|
|
15,999
|
|
|||
Dividends paid
|
(1,370,390
|
)
|
|
(789,907
|
)
|
|
(650,433
|
)
|
|||
Net cash used in financing activities
|
(7,557,967
|
)
|
|
(6,226,997
|
)
|
|
(1,831,156
|
)
|
Consolidated Statements of Cash Flows, continued
|
|
|
|
||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
6,138,404
|
|
|
5,963,553
|
|
|
(7,800,246
|
)
|
|||
Cash and Cash Equivalents, Beginning of Period
|
21,790,068
|
|
|
15,826,515
|
|
|
23,626,761
|
|
|||
Cash and Cash Equivalents, End of Period
|
$
|
27,928,472
|
|
|
$
|
21,790,068
|
|
|
$
|
15,826,515
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures:
|
|
|
|
|
|
||||||
Cash Paid During the Year for:
|
|
|
|
|
|
||||||
Income tax payments, net
|
$
|
5,068,400
|
|
|
$
|
4,658,000
|
|
|
$
|
2,744,100
|
|
Non Cash Investing and Financing Activities
|
|
|
|
|
|
||||||
Non cash net unrealized (gain) loss on investments, net of deferred tax (provision) benefit of $(133,892), $708,564 and $(805,779) for 2016, 2015 and 2014, respectively
|
$
|
(272,906
|
)
|
|
$
|
1,336,756
|
|
|
$
|
(1,538,740
|
)
|
Adjustments to postretirement benefits obligation, net of deferred tax benefit of $192, $21,612 and $16,021 for 2016, 2015 and 2014, respectively
|
$
|
374
|
|
|
$
|
41,954
|
|
|
$
|
31,100
|
|
Changes in Financial Statement Amounts Related to Purchase of Subsidiaries, Net of Cash Received
|
|
|
|
|
|
||||||
Goodwill and other intangibles acquired
|
$
|
(11,249,851
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Title plant acquired (in prepaid expenses and other assets)
|
(690,000
|
)
|
|
—
|
|
|
—
|
|
|||
Fixed assets acquired
|
(533,424
|
)
|
|
—
|
|
|
—
|
|
|||
Prepaid and other assets acquired
|
(15,233
|
)
|
|
—
|
|
|
—
|
|
|||
Accounts payable and accrued liabilities assumed
|
1,683,844
|
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
2,488,509
|
|
|
—
|
|
|
—
|
|
|||
Purchase of subsidiary, net of cash received
|
$
|
(8,316,155
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
December 31, 2016
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Fixed maturities, available-for-sale, at fair value:
|
|
|
|
|
|
|
|
||||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
29,374,774
|
|
|
$
|
440,628
|
|
|
$
|
298,533
|
|
|
$
|
29,516,869
|
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
57,459,818
|
|
|
1,619,444
|
|
|
502,135
|
|
|
58,577,127
|
|
||||
Corporate debt securities
|
13,327,765
|
|
|
512,316
|
|
|
—
|
|
|
13,840,081
|
|
||||
Total
|
$
|
100,162,357
|
|
|
$
|
2,572,388
|
|
|
$
|
800,668
|
|
|
$
|
101,934,077
|
|
Equity securities, available-for-sale, at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stocks
|
$
|
24,836,032
|
|
|
$
|
16,392,210
|
|
|
$
|
48,983
|
|
|
$
|
41,179,259
|
|
Total
|
$
|
24,836,032
|
|
|
$
|
16,392,210
|
|
|
$
|
48,983
|
|
|
$
|
41,179,259
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds and certificates of deposit
|
$
|
6,558,840
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,558,840
|
|
Total
|
$
|
6,558,840
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,558,840
|
|
December 31, 2015
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Fixed maturities, available-for-sale, at fair value:
|
|
|
|
|
|
|
|
||||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
31,883,439
|
|
|
$
|
987,595
|
|
|
$
|
11,734
|
|
|
$
|
32,859,300
|
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
52,202,815
|
|
|
2,604,152
|
|
|
26,127
|
|
|
54,780,840
|
|
||||
Corporate debt securities
|
17,004,985
|
|
|
539,832
|
|
|
58,473
|
|
|
17,486,344
|
|
||||
Auction rate securities
|
924,587
|
|
|
15,313
|
|
|
—
|
|
|
939,900
|
|
||||
Total
|
$
|
102,015,826
|
|
|
$
|
4,146,892
|
|
|
$
|
96,334
|
|
|
$
|
106,066,384
|
|
Equity securities, available-for sale, at fair value:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
$
|
23,855,873
|
|
|
$
|
13,785,968
|
|
|
$
|
128,377
|
|
|
$
|
37,513,464
|
|
Total
|
$
|
23,855,873
|
|
|
$
|
13,785,968
|
|
|
$
|
128,377
|
|
|
$
|
37,513,464
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds and certificates of deposit
|
$
|
6,865,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,865,406
|
|
Total
|
$
|
6,865,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,865,406
|
|
|
Available-for-Sale
|
||||||
|
Amortized
Cost
|
|
Fair
Value
|
||||
Due in one year or less
|
$
|
17,441,766
|
|
|
$
|
17,562,215
|
|
Due after one year through five years
|
33,072,959
|
|
|
34,149,161
|
|
||
Due five years through ten years
|
47,658,033
|
|
|
47,758,923
|
|
||
Due after ten years
|
1,989,599
|
|
|
2,463,778
|
|
||
Total
|
$
|
100,162,357
|
|
|
$
|
101,934,077
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Fixed maturities
|
$
|
3,506,484
|
|
|
$
|
3,439,296
|
|
|
$
|
3,282,810
|
|
Equity securities
|
1,157,550
|
|
|
1,086,365
|
|
|
973,419
|
|
|||
Invested cash and other short-term investments
|
19,982
|
|
|
5,605
|
|
|
3,202
|
|
|||
Miscellaneous interest
|
473
|
|
|
53
|
|
|
70
|
|
|||
Investment income
|
$
|
4,684,489
|
|
|
$
|
4,531,319
|
|
|
$
|
4,259,501
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Gross realized gains:
|
|
|
|
|
|
||||||
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
$
|
161
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt securities
|
119,001
|
|
|
5,417
|
|
|
6,670
|
|
|||
Common stocks and nonredeemable preferred stocks
|
953,491
|
|
|
1,572,636
|
|
|
1,021,463
|
|
|||
Auction rate securities
|
74,996
|
|
|
—
|
|
|
—
|
|
|||
Total
|
1,147,649
|
|
|
1,578,053
|
|
|
1,028,133
|
|
|||
Gross realized losses:
|
|
|
|
|
|
||||||
General obligations of U.S. states, territories and political subdivisions
|
(535
|
)
|
|
(12,319
|
)
|
|
—
|
|
|||
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
(1,085
|
)
|
|
(397
|
)
|
|
—
|
|
|||
Common stocks and nonredeemable preferred stocks
|
(173,357
|
)
|
|
(846,500
|
)
|
|
(509,854
|
)
|
|||
Other than temporary impairment of securities
|
(233,941
|
)
|
|
(751,059
|
)
|
|
(14,542
|
)
|
|||
Total
|
(408,918
|
)
|
|
(1,610,275
|
)
|
|
(524,396
|
)
|
|||
Net realized gain (loss)
|
$
|
738,731
|
|
|
$
|
(32,222
|
)
|
|
$
|
503,737
|
|
Net realized gain (loss) on other investments:
|
|
|
|
|
|
||||||
Impairments of other assets and investments
|
$
|
—
|
|
|
$
|
(233,069
|
)
|
|
$
|
(10,062
|
)
|
Net gain on other assets and investments
|
29,705
|
|
|
149,128
|
|
|
45,288
|
|
|||
Net loss on other assets and investments
|
—
|
|
|
—
|
|
|
(270,669
|
)
|
|||
Total
|
$
|
29,705
|
|
|
$
|
(83,941
|
)
|
|
$
|
(235,443
|
)
|
Net realized gain (loss) on investments
|
$
|
768,436
|
|
|
$
|
(116,163
|
)
|
|
$
|
268,294
|
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
December 31, 2016
|
Estimated Fair Value
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Unrealized Loss
|
||||||||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
13,884,808
|
|
|
$
|
(298,533
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,884,808
|
|
|
$
|
(298,533
|
)
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
16,161,906
|
|
|
(502,135
|
)
|
|
—
|
|
|
—
|
|
|
16,161,906
|
|
|
(502,135
|
)
|
||||||
Corporate debt securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total fixed maturity securities
|
$
|
30,046,714
|
|
|
$
|
(800,668
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,046,714
|
|
|
$
|
(800,668
|
)
|
Equity securities
|
380,400
|
|
|
(48,983
|
)
|
|
—
|
|
|
—
|
|
|
380,400
|
|
|
(48,983
|
)
|
||||||
Total temporarily impaired securities
|
$
|
30,427,114
|
|
|
$
|
(849,651
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,427,114
|
|
|
$
|
(849,651
|
)
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
1,758,345
|
|
|
$
|
(11,734
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,758,345
|
|
|
$
|
(11,734
|
)
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
1,672,217
|
|
|
(5,139
|
)
|
|
1,183,963
|
|
|
(20,989
|
)
|
|
2,856,180
|
|
|
(26,128
|
)
|
||||||
Corporate debt securities
|
6,981,275
|
|
|
(58,472
|
)
|
|
—
|
|
|
—
|
|
|
6,981,275
|
|
|
(58,472
|
)
|
||||||
Total fixed maturity securities
|
$
|
10,411,837
|
|
|
$
|
(75,345
|
)
|
|
$
|
1,183,963
|
|
|
$
|
(20,989
|
)
|
|
$
|
11,595,800
|
|
|
$
|
(96,334
|
)
|
Equity securities
|
5,533,667
|
|
|
(128,377
|
)
|
|
—
|
|
|
—
|
|
|
5,533,667
|
|
|
(128,377
|
)
|
||||||
Total temporarily impaired securities
|
$
|
15,945,504
|
|
|
$
|
(203,722
|
)
|
|
$
|
1,183,963
|
|
|
$
|
(20,989
|
)
|
|
$
|
17,129,467
|
|
|
$
|
(224,711
|
)
|
Type of Investment
|
|
Balance Sheet Classification
|
|
Carrying Value
|
|
Estimated Fair Value
|
|
Maximum Potential Loss (a)
|
||||||
Tax credit LPs
|
|
Other investments
|
|
$
|
1,137,346
|
|
|
$
|
1,137,346
|
|
|
$
|
1,325,000
|
|
Real estate LLCs or LPs
|
|
Other investments
|
|
4,691,173
|
|
|
5,119,361
|
|
|
7,150,000
|
|
|||
Small business investment LPs
|
|
Other investments
|
|
3,134,234
|
|
|
3,024,455
|
|
|
9,400,000
|
|
|||
Total
|
|
|
|
$
|
8,962,753
|
|
|
$
|
9,281,162
|
|
|
$
|
17,875,000
|
|
(a)
|
|
Maximum potential loss is calculated as the total investment in the LLC or LP including any capital commitments that may have not yet been called. The Company is not exposed to any loss beyond the total commitment of its investment.
|
As of December 31, 2016
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Short-term investments
|
$
|
6,558,840
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,558,840
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
41,179,259
|
|
|
—
|
|
|
—
|
|
|
41,179,259
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Obligations of U.S. states, territories and political subdivisions*
|
—
|
|
|
88,093,996
|
|
|
—
|
|
|
88,093,996
|
|
||||
Corporate debt securities* and auction rate security
|
—
|
|
|
13,840,081
|
|
|
—
|
|
|
13,840,081
|
|
||||
Total
|
$
|
47,738,099
|
|
|
$
|
101,934,077
|
|
|
$
|
—
|
|
|
$
|
149,672,176
|
|
As of December 31, 2015
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Short-term investments
|
$
|
6,865,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,865,406
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common stocks and nonredeemable preferred stock
|
37,513,464
|
|
|
—
|
|
|
—
|
|
|
37,513,464
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Obligations of U.S. states, territories and political subdivisions*
|
—
|
|
|
87,640,140
|
|
|
—
|
|
|
87,640,140
|
|
||||
Corporate debt securities* and auction rate security
|
—
|
|
|
17,486,344
|
|
|
939,900
|
|
|
18,426,244
|
|
||||
Total
|
$
|
44,378,870
|
|
|
$
|
105,126,484
|
|
|
$
|
939,900
|
|
|
$
|
150,445,254
|
|
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets
|
Carrying Value
|
|
Estimated Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Cash and cash equivalents
|
$
|
27,928,472
|
|
|
$
|
27,928,472
|
|
|
$
|
27,928,472
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost-basis investments
|
4,244,402
|
|
|
4,497,665
|
|
|
—
|
|
|
—
|
|
|
4,497,665
|
|
|||||
Accrued dividends and interest
|
1,035,152
|
|
|
1,035,152
|
|
|
1,035,152
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
33,208,026
|
|
|
$
|
33,461,289
|
|
|
$
|
28,963,624
|
|
|
$
|
—
|
|
|
$
|
4,497,665
|
|
As of December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets
|
Carrying Value
|
|
Estimated Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Cash and cash equivalents
|
$
|
21,790,068
|
|
|
$
|
21,790,068
|
|
|
$
|
21,790,068
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost-basis investments
|
3,588,314
|
|
|
3,684,020
|
|
|
—
|
|
|
—
|
|
|
3,684,020
|
|
|||||
Accrued dividends and interest
|
1,004,126
|
|
|
1,004,126
|
|
|
1,004,126
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
26,382,508
|
|
|
$
|
26,478,214
|
|
|
$
|
22,794,194
|
|
|
$
|
—
|
|
|
$
|
3,684,020
|
|
Changes in fair value during the year ended December 31:
|
2016
|
|
2015
|
||||
Beginning balance at January 1
|
$
|
939,900
|
|
|
$
|
939,100
|
|
Redemptions and sales
|
(1,000,000
|
)
|
|
—
|
|
||
Realized gain – included in net realized gain (loss) on investments
|
74,996
|
|
|
—
|
|
||
Unrealized (loss) gain – included in other comprehensive income (loss)
|
(14,896
|
)
|
|
800
|
|
||
Ending balance at December 31
|
$
|
—
|
|
|
$
|
939,900
|
|
December 31, 2016
|
Valuation
Method
|
|
Impaired
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total at
Estimated
Fair
Value
|
|
Impairment
Losses
|
||||||||||
Cost-basis investments
|
Fair Value
|
|
Yes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total cost-basis investments and other assets
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
December 31, 2015
|
Valuation
Method
|
|
Impaired
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total at
Estimated
Fair
Value
|
|
Impairment
Losses
|
||||||||||
Cost-basis investments
|
Fair Value
|
|
Yes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
163,350
|
|
|
$
|
163,350
|
|
|
$
|
(233,069
|
)
|
Total cost-basis investments and other assets
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
163,350
|
|
|
$
|
163,350
|
|
|
$
|
(233,069
|
)
|
|
2016
|
|
2015
|
||||
Land
|
$
|
1,122,582
|
|
|
$
|
1,122,582
|
|
Office buildings and improvements (25 years)
|
4,399,448
|
|
|
3,495,338
|
|
||
Furniture, fixtures and equipment (3 to 10 years)
|
10,444,355
|
|
|
8,948,535
|
|
||
Automobiles (3 years)
|
971,235
|
|
|
968,210
|
|
||
Total
|
16,937,620
|
|
|
14,534,665
|
|
||
Less accumulated depreciation
|
(8,184,154
|
)
|
|
(7,385,714
|
)
|
||
Property and equipment, net
|
$
|
8,753,466
|
|
|
$
|
7,148,951
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance, beginning of period
|
$
|
37,788,000
|
|
|
$
|
36,677,000
|
|
|
$
|
35,360,000
|
|
Provision (benefit) related to:
|
|
|
|
|
|
||||||
Current year
|
6,673,036
|
|
|
7,295,013
|
|
|
6,860,335
|
|
|||
Prior years
|
(6,430,083
|
)
|
|
(2,816,519
|
)
|
|
(1,630,619
|
)
|
|||
Total provision charged to operations
|
242,953
|
|
|
4,478,494
|
|
|
5,229,716
|
|
|||
Claims paid, net of recoveries, related to:
|
|
|
|
|
|
||||||
Current year
|
(102,501
|
)
|
|
(97,116
|
)
|
|
(102,947
|
)
|
|||
Prior years
|
(2,623,452
|
)
|
|
(3,270,378
|
)
|
|
(3,809,769
|
)
|
|||
Total claims paid, net of recoveries
|
(2,725,953
|
)
|
|
(3,367,494
|
)
|
|
(3,912,716
|
)
|
|||
Balance, end of year
|
$
|
35,305,000
|
|
|
$
|
37,788,000
|
|
|
$
|
36,677,000
|
|
|
2016
|
|
%
|
|
2015
|
|
%
|
||||
Known title claims
|
$
|
4,405,343
|
|
|
12.5
|
|
$
|
5,066,469
|
|
|
13.4
|
IBNR
|
30,899,657
|
|
|
87.5
|
|
32,721,531
|
|
|
86.6
|
||
Total loss reserve
|
$
|
35,305,000
|
|
|
100.0
|
|
$
|
37,788,000
|
|
|
100.0
|
For the Years Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Net income attributable to the Company
|
$
|
19,523,118
|
|
|
$
|
12,533,905
|
|
|
$
|
9,648,975
|
|
Weighted average common shares outstanding – Basic
|
1,907,675
|
|
|
1,984,360
|
|
|
2,031,760
|
|
|||
Incremental shares outstanding assuming the exercise of dilutive stock options and SARs (share-settled)
|
7,382
|
|
|
5,439
|
|
|
5,774
|
|
|||
Weighted average common shares outstanding – Diluted
|
1,915,057
|
|
|
1,989,799
|
|
|
2,037,534
|
|
|||
Basic earnings per common share
|
$
|
10.23
|
|
|
$
|
6.32
|
|
|
$
|
4.75
|
|
Diluted earnings per common share
|
$
|
10.19
|
|
|
$
|
6.30
|
|
|
$
|
4.74
|
|
|
Number
Of Shares
|
|
Weighted
Average
Exercise
Price
|
|
Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding as of January 1, 2014
|
19,000
|
|
|
$
|
45.74
|
|
|
3.43
|
|
$
|
669,610
|
|
SARs granted
|
4,500
|
|
|
68.70
|
|
|
|
|
|
|
||
SARs exercised
|
(1,500
|
)
|
|
49.04
|
|
|
|
|
|
|
||
Options exercised
|
(1,000
|
)
|
|
27.21
|
|
|
|
|
|
|
||
Outstanding as of December 31, 2014
|
21,000
|
|
|
$
|
51.30
|
|
|
3.64
|
|
$
|
453,510
|
|
SARs granted
|
4,500
|
|
|
73.00
|
|
|
|
|
|
|
||
SARs exercised
|
(2,000
|
)
|
|
47.88
|
|
|
|
|
|
|||
Options exercised
|
(1,500
|
)
|
|
36.79
|
|
|
|
|
|
|
||
Outstanding as of December 31, 2015
|
22,000
|
|
|
$
|
57.04
|
|
|
3.93
|
|
$
|
945,055
|
|
SARs granted
|
4,500
|
|
|
93.87
|
|
|
|
|
|
|
||
SARs exercised
|
(2,000
|
)
|
|
32.00
|
|
|
|
|
|
|
||
Outstanding as of December 31, 2016
|
24,500
|
|
|
$
|
65.85
|
|
|
3.85
|
|
$
|
836,640
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable as of December 31, 2016
|
23,375
|
|
|
$
|
64.50
|
|
|
3.73
|
|
$
|
829,744
|
|
|
|
|
|
|
|
|
|
|||||
Unvested as of December 31, 2016
|
1,125
|
|
|
$
|
93.87
|
|
|
6.38
|
|
$
|
6,896
|
|
|
|
|
|
|
|
SARs Outstanding at Year-End
|
|
SARs Exercisable at Year-End
|
||||||||||||||||
Range of Exercise Prices
|
|
Number
Outstanding
|
|
Weighted
Average
Remaining
Contractual Life
|
|
Weighted
Average
Exercise
Price
|
|
Number
Exercisable
|
|
Weighted
Average
Exercise
Price
|
||||||||||||||
$
|
30.00
|
|
|
—
|
|
$
|
39.99
|
|
|
2,500
|
|
|
0.38
|
|
$
|
33.31
|
|
|
2,500
|
|
|
$
|
33.31
|
|
40.00
|
|
|
—
|
|
49.99
|
|
|
2,500
|
|
|
1.38
|
|
41.50
|
|
|
2,500
|
|
|
41.50
|
|
||||
50.00
|
|
|
—
|
|
59.99
|
|
|
3,000
|
|
|
2.37
|
|
50.50
|
|
|
3,000
|
|
|
50.50
|
|
||||
60.00
|
|
|
—
|
|
69.99
|
|
|
4,500
|
|
|
4.39
|
|
68.70
|
|
|
4,500
|
|
|
68.70
|
|
||||
70.00
|
|
|
—
|
|
79.99
|
|
|
7,500
|
|
|
4.58
|
|
72.44
|
|
|
7,500
|
|
|
72.44
|
|
||||
80.00
|
|
|
—
|
|
89.99
|
|
|
—
|
|
|
0.00
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
90.00
|
|
|
—
|
|
99.99
|
|
|
4,500
|
|
|
6.38
|
|
93.87
|
|
|
3,375
|
|
|
93.87
|
|
||||
$
|
30.00
|
|
|
—
|
|
$
|
99.99
|
|
|
24,500
|
|
|
3.85
|
|
$
|
65.85
|
|
|
23,375
|
|
|
$
|
64.50
|
|
|
2016
|
|
2015
|
|
2014
|
Expected Life in Years
|
7.0
|
|
7.0
|
|
6.9
|
Volatility
|
28.9%
|
|
40.7%
|
|
39.9%
|
Interest Rate
|
1.7%
|
|
2.0%
|
|
2.1%
|
Yield Rate
|
1.0%
|
|
0.4%
|
|
0.4%
|
For the Years Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Exercise price equal to market price on date of grant:
|
|
|
|
|
|
||||||
Weighted average market price
|
$
|
93.87
|
|
|
$
|
73.00
|
|
|
$
|
68.70
|
|
Weighted average grant-date fair value
|
$
|
28.75
|
|
|
$
|
31.16
|
|
|
$
|
28.98
|
|
For the Years Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
5,745,000
|
|
|
$
|
4,179,000
|
|
|
$
|
3,121,000
|
|
State
|
81,000
|
|
|
34,000
|
|
|
84,000
|
|
|||
Total current
|
5,826,000
|
|
|
4,213,000
|
|
|
3,205,000
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
2,755,777
|
|
|
976,624
|
|
|
620,156
|
|
|||
State
|
34,223
|
|
|
38,376
|
|
|
(9,156
|
)
|
|||
Total deferred
|
2,790,000
|
|
|
1,015,000
|
|
|
611,000
|
|
|||
Total
|
$
|
8,616,000
|
|
|
$
|
5,228,000
|
|
|
$
|
3,816,000
|
|
For the Years Ended December 31,
|
2016
|
|
2015
|
||||
Deferred income tax assets:
|
|
|
|
||||
Accrued benefits and retirement services
|
$
|
3,625,943
|
|
|
$
|
3,266,823
|
|
Other-than-temporary impairment of assets
|
429,167
|
|
|
428,614
|
|
||
Allowance for doubtful accounts
|
122,477
|
|
|
1,205,735
|
|
||
Postretirement benefit obligation
|
56,259
|
|
|
59,108
|
|
||
Net operating loss carryforward
|
15,000
|
|
|
22,000
|
|
||
Reinsurance and commission payable
|
7,935
|
|
|
13,752
|
|
||
Other
|
410,400
|
|
|
416,401
|
|
||
Total
|
4,667,181
|
|
|
5,412,433
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Net unrealized gain on investments
|
6,207,324
|
|
|
6,073,431
|
|
||
Recorded reserve for claims, net of statutory premium reserves
|
4,985,984
|
|
|
3,322,336
|
|
||
Intangible assets
|
2,525,511
|
|
|
37,451
|
|
||
Excess of tax over book depreciation
|
1,303,710
|
|
|
987,765
|
|
||
Other
|
762,908
|
|
|
694,456
|
|
||
Total
|
15,785,437
|
|
|
11,115,439
|
|
||
Net deferred income tax liabilities
|
$
|
(11,118,256
|
)
|
|
$
|
(5,703,006
|
)
|
For the Years Ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Anticipated income tax expense
|
$
|
9,733,482
|
|
|
$
|
6,115,306
|
|
|
$
|
4,626,555
|
|
Increase (decrease) related to:
|
|
|
|
|
|
||||||
State income taxes, net of federal income tax benefit
|
52,974
|
|
|
22,304
|
|
|
55,188
|
|
|||
Tax-exempt interest income (net of amortization)
|
(1,074,504
|
)
|
|
(981,712
|
)
|
|
(876,365
|
)
|
|||
Other, net
|
(95,952
|
)
|
|
72,102
|
|
|
10,622
|
|
|||
Provision for income taxes
|
$
|
8,616,000
|
|
|
$
|
5,228,000
|
|
|
$
|
3,816,000
|
|
Year Ended:
|
|
||
2017
|
$
|
932,831
|
|
2018
|
683,892
|
|
|
2019
|
474,879
|
|
|
2020
|
396,386
|
|
|
2021
|
376,327
|
|
|
Thereafter
|
553,660
|
|
|
Total
|
$
|
3,417,975
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net periodic benefit cost
|
|
|
|
|
|
||||||
Service cost – benefits earned during the year
|
$
|
10,180
|
|
|
$
|
16,748
|
|
|
$
|
14,667
|
|
Interest cost on the projected benefit obligation
|
35,123
|
|
|
30,772
|
|
|
30,472
|
|
|||
Amortization of unrecognized prior service cost
|
—
|
|
|
4,390
|
|
|
2,217
|
|
|||
Amortization of unrecognized loss
|
8,941
|
|
|
3,514
|
|
|
—
|
|
|||
Net periodic benefits cost at end of year
|
$
|
54,244
|
|
|
$
|
55,424
|
|
|
$
|
47,356
|
|
|
2016
|
|
2015
|
||||
Funded status
|
|
|
|
||||
Actuarial present value of future benefits:
|
|
|
|
||||
Fully eligible active employee
|
$
|
(928,492
|
)
|
|
$
|
(483,985
|
)
|
Non-eligible active employees
|
—
|
|
|
(398,638
|
)
|
||
Plan assets
|
—
|
|
|
—
|
|
||
Funded status of accumulated postretirement benefit obligation, recognized in other liabilities
|
$
|
(928,492
|
)
|
|
$
|
(882,623
|
)
|
|
2016
|
|
2015
|
||||
Accrued postretirement benefit obligation at beginning of year
|
$
|
(882,623
|
)
|
|
$
|
(771,537
|
)
|
Service cost – benefits earned during the year
|
(10,180
|
)
|
|
(16,748
|
)
|
||
Interest cost on projected benefit obligation
|
(35,123
|
)
|
|
(30,772
|
)
|
||
Actuarial loss
|
(566
|
)
|
|
(63,566
|
)
|
||
Accrued postretirement benefit obligation at end of year
|
$
|
(928,492
|
)
|
|
$
|
(882,623
|
)
|
|
2016
|
|
2015
|
||||
Balance at beginning of year
|
$
|
173,812
|
|
|
$
|
118,150
|
|
Components of accumulated other comprehensive income:
|
|
|
|
||||
Unrecognized prior service cost
|
—
|
|
|
(4,390
|
)
|
||
Amortization of loss, net
|
(8,941
|
)
|
|
(3,514
|
)
|
||
Actuarial loss
|
566
|
|
|
63,566
|
|
||
Balance at end of year
|
$
|
165,437
|
|
|
$
|
173,812
|
|
|
Projected
2017
|
||
Amortization of unrecognized prior service cost
|
$
|
—
|
|
Amortization of unrecognized loss
|
8,612
|
|
|
Net periodic benefit cost at end of year
|
$
|
8,612
|
|
|
One
Percentage
Point
Increase
|
|
One
Percentage
Point
Decrease
|
||||
Net periodic postretirement benefit cost
|
|
|
|
||||
Effect on the service cost component
|
$
|
—
|
|
|
$
|
—
|
|
Effect on interest cost
|
7,447
|
|
|
(5,835
|
)
|
||
Total effect on the net periodic postretirement benefit cost
|
$
|
7,447
|
|
|
$
|
(5,835
|
)
|
Accumulated postretirement benefit obligation (including active employees
who are not fully eligible)
|
|
|
|
||||
Effect on those currently receiving benefits (retirees and spouses)
|
$
|
—
|
|
|
$
|
—
|
|
Effect on active fully eligible
|
186,181
|
|
|
(145,871
|
)
|
||
Effect on actives not yet eligible
|
—
|
|
|
—
|
|
||
Total effect on the accumulated postretirement benefit obligation
|
$
|
186,181
|
|
|
$
|
(145,871
|
)
|
2016
|
Title
Insurance
|
|
All
Other
|
|
Intersegment
Eliminations
|
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
128,408,746
|
|
|
$
|
6,808,392
|
|
|
$
|
(2,177,649
|
)
|
|
$
|
133,039,489
|
|
Investment income
|
4,329,605
|
|
|
564,891
|
|
|
(210,007
|
)
|
|
4,684,489
|
|
||||
Net realized gain on investments
|
644,850
|
|
|
123,586
|
|
|
—
|
|
|
768,436
|
|
||||
Total revenues
|
$
|
133,383,201
|
|
|
$
|
7,496,869
|
|
|
$
|
(2,387,656
|
)
|
|
$
|
138,492,414
|
|
Operating expenses
|
105,885,770
|
|
|
6,583,157
|
|
|
(2,107,965
|
)
|
|
110,360,962
|
|
||||
Income before income taxes
|
$
|
27,497,431
|
|
|
$
|
913,712
|
|
|
$
|
(279,691
|
)
|
|
$
|
28,131,452
|
|
Total assets
|
$
|
183,763,655
|
|
|
$
|
45,174,467
|
|
|
$
|
—
|
|
|
$
|
228,938,122
|
|
2015
|
Title
Insurance
|
|
All
Other
|
|
Intersegment
Eliminations
|
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
118,144,981
|
|
|
$
|
6,479,484
|
|
|
$
|
(1,839,549
|
)
|
|
$
|
122,784,916
|
|
Investment income
|
4,073,857
|
|
|
574,132
|
|
|
(116,670
|
)
|
|
4,531,319
|
|
||||
Net realized loss on investments
|
(13,603
|
)
|
|
(102,560
|
)
|
|
—
|
|
|
(116,163
|
)
|
||||
Total revenues
|
$
|
122,205,235
|
|
|
$
|
6,951,056
|
|
|
$
|
(1,956,219
|
)
|
|
$
|
127,200,072
|
|
Operating expenses
|
104,594,829
|
|
|
6,598,055
|
|
|
(1,769,865
|
)
|
|
109,423,019
|
|
||||
Income before income taxes
|
$
|
17,610,406
|
|
|
$
|
353,001
|
|
|
$
|
(186,354
|
)
|
|
$
|
17,777,053
|
|
Total assets
|
$
|
163,582,898
|
|
|
$
|
47,939,131
|
|
|
$
|
—
|
|
|
$
|
211,522,029
|
|
2014
|
Title
Insurance
|
|
All
Other
|
|
Intersegment
Eliminations
|
|
Total
|
||||||||
Insurance and other services revenues
|
$
|
114,279,532
|
|
|
$
|
5,904,059
|
|
|
$
|
(1,592,100
|
)
|
|
$
|
118,591,491
|
|
Investment income
|
3,835,209
|
|
|
517,628
|
|
|
(93,336
|
)
|
|
4,259,501
|
|
||||
Net realized gain on investments
|
213,709
|
|
|
54,585
|
|
|
—
|
|
|
268,294
|
|
||||
Total revenues
|
$
|
118,328,450
|
|
|
$
|
6,476,272
|
|
|
$
|
(1,685,436
|
)
|
|
$
|
123,119,286
|
|
Operating expenses
|
105,290,627
|
|
|
5,862,577
|
|
|
(1,522,416
|
)
|
|
109,630,788
|
|
||||
Income before income taxes
|
$
|
13,037,823
|
|
|
$
|
613,695
|
|
|
$
|
(163,020
|
)
|
|
$
|
13,488,498
|
|
Total assets
|
$
|
153,072,950
|
|
|
$
|
44,966,260
|
|
|
$
|
—
|
|
|
$
|
198,039,210
|
|
Financial Statement Classification,
|
2016
|
|
2015
|
||||
Consolidated Balance Sheets
|
|
||||||
Other investments
|
$
|
6,437,000
|
|
|
$
|
6,519,000
|
|
Premiums and fees receivable
|
$
|
56,000
|
|
|
$
|
719,000
|
|
Financial Statement Classification,
|
|
|
|
||||||||
Consolidated Statements of Income
|
2016
|
|
2015
|
|
2014
|
||||||
Net premiums written
|
$
|
15,016,000
|
|
|
$
|
14,015,000
|
|
|
$
|
11,783,000
|
|
Other income
|
$
|
2,317,000
|
|
|
$
|
2,618,000
|
|
|
$
|
2,043,000
|
|
Commissions to agents
|
$
|
10,394,000
|
|
|
$
|
9,700,000
|
|
|
$
|
8,049,000
|
|
Year Ended:
|
2016
|
2015
|
||||
Referral relationships
|
$
|
6,416,215
|
|
$
|
836,215
|
|
Non-complete agreements
|
1,405,685
|
|
645,685
|
|
||
Tradename
|
560,000
|
|
—
|
|
||
Total
|
8,381,900
|
|
1,481,900
|
|
||
Accumulated amortization
|
(475,110
|
)
|
(261,315
|
)
|
||
Identifiable intangible assets, net
|
$
|
7,906,790
|
|
$
|
1,220,585
|
|
Year Ended:
|
|
||
2017
|
$
|
963,920
|
|
2018
|
642,253
|
|
|
2019
|
568,920
|
|
|
2020
|
568,920
|
|
|
2021
|
561,587
|
|
|
Thereafter
|
4,601,190
|
|
|
Total
|
$
|
7,906,790
|
|
2016
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at January 1
|
$
|
11,597,741
|
|
|
$
|
(114,726
|
)
|
|
$
|
11,483,015
|
|
Other comprehensive income (loss) before reclassifications
|
758,021
|
|
|
(374
|
)
|
|
757,647
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(485,115
|
)
|
|
5,900
|
|
|
(479,215
|
)
|
|||
Net current-period other comprehensive income
|
272,906
|
|
|
5,526
|
|
|
278,432
|
|
|||
Ending balance
|
$
|
11,870,647
|
|
|
$
|
(109,200
|
)
|
|
$
|
11,761,447
|
|
2015
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at January 1
|
$
|
12,934,497
|
|
|
$
|
(77,988
|
)
|
|
$
|
12,856,509
|
|
Other comprehensive loss before reclassifications
|
(1,355,316
|
)
|
|
(41,954
|
)
|
|
(1,397,270
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
18,560
|
|
|
5,216
|
|
|
23,776
|
|
|||
Net current-period other comprehensive loss
|
(1,336,756
|
)
|
|
(36,738
|
)
|
|
(1,373,494
|
)
|
|||
Ending balance
|
$
|
11,597,741
|
|
|
$
|
(114,726
|
)
|
|
$
|
11,483,015
|
|
2014
|
Unrealized Gains and Losses
On Available-for-Sale
Securities
|
|
Postretirement
Benefits Plans
|
|
Total
|
||||||
Beginning balance at January 1
|
$
|
11,395,757
|
|
|
$
|
(48,353
|
)
|
|
$
|
11,347,404
|
|
Other comprehensive income (loss) before reclassifications
|
1,874,111
|
|
|
(31,100
|
)
|
|
1,843,011
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(335,371
|
)
|
|
1,465
|
|
|
(333,906
|
)
|
|||
Net current-period other comprehensive income (loss)
|
1,538,740
|
|
|
(29,635
|
)
|
|
1,509,105
|
|
|||
Ending balance
|
$
|
12,934,497
|
|
|
$
|
(77,988
|
)
|
|
$
|
12,856,509
|
|
2016
|
|
|
|
||
Details about Accumulated Other
Comprehensive Income Components
|
Amount Reclassified from
Accumulated Other
Comprehensive Income
|
|
Affected Line Item in the Consolidated
Statements of Income
|
||
Unrealized gains and losses on available-for-sale securities:
|
|
|
|
||
Net realized gain on investment
|
$
|
972,672
|
|
|
|
Other-than-temporary impairments
|
(233,941
|
)
|
|
|
|
Total
|
$
|
738,731
|
|
|
Net realized gain (loss) on investments
|
Tax
|
(253,616
|
)
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
485,115
|
|
|
|
Amortization related to postretirement benefit plans:
|
|
|
|
|
|
Prior year service cost
|
$
|
—
|
|
|
|
Unrecognized loss
|
(8,941
|
)
|
|
|
|
Total
|
$
|
(8,941
|
)
|
|
(a)
|
Tax
|
3,041
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(5,900
|
)
|
|
|
Reclassifications for the period
|
$
|
479,215
|
|
|
|
2015
|
|
|
|
||
Details about Accumulated Other
Comprehensive Income Components |
Amount Reclassified from
Accumulated Other Comprehensive Income |
|
Affected Line Item in the Consolidated
Statements of Income |
||
Unrealized gains and losses on available-for-sale securities:
|
|
|
|
||
Net realized gain on investment
|
$
|
718,837
|
|
|
|
Other-than-temporary impairments
|
(751,059
|
)
|
|
|
|
Total
|
$
|
(32,222
|
)
|
|
Net realized gain (loss) on investments
|
Tax
|
13,662
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(18,560
|
)
|
|
|
Amortization related to postretirement benefit plans:
|
|
|
|
|
|
Prior year service cost
|
$
|
(4,390
|
)
|
|
|
Unrecognized loss
|
(3,514
|
)
|
|
|
|
Total
|
$
|
(7,904
|
)
|
|
(a)
|
Tax
|
2,688
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(5,216
|
)
|
|
|
Reclassifications for the period
|
$
|
(23,776
|
)
|
|
|
2014
|
|
|
|
||
Details about Accumulated Other
Comprehensive Income Components |
Amount Reclassified from
Accumulated Other Comprehensive Income |
|
Affected Line Item in the Consolidated
Statements of Income |
||
Unrealized gains and losses on available-for-sale securities:
|
|
|
|
||
Net realized gain on investment
|
$
|
518,279
|
|
|
|
Other-than-temporary impairments
|
(14,542
|
)
|
|
|
|
Total
|
$
|
503,737
|
|
|
Net realized gain (loss) on investments
|
Tax
|
(168,366
|
)
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
335,371
|
|
|
|
Amortization related to postretirement benefit plans:
|
|
|
|
|
|
Prior year service cost
|
$
|
(2,217
|
)
|
|
|
Unrecognized loss
|
—
|
|
|
|
|
Total
|
$
|
(2,217
|
)
|
|
(a)
|
Tax
|
752
|
|
|
Provision for Income Taxes
|
|
Net of Tax
|
$
|
(1,465
|
)
|
|
|
Reclassifications for the period
|
$
|
333,906
|
|
|
|
(a)
|
These accumulated other comprehensive income components are not reclassified to net income in their entirety in the same reporting period. The amounts are presented within salaries, employee benefits and payroll taxes on the Consolidated Statements of Income as amortized. Amortization related to postretirement benefit plans is included in the computation of net periodic pension costs, as discussed in Note 10.
|
Plan Category
|
Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted Average
Exercise
Price of
Outstanding Options,
Warrants and Rights
|
|
Number of
Securities
Remaining
Available for Future
Issuance Under
Equity
Compensation Plans
|
||||
Equity compensation plans approved by shareholders
|
24,500
|
|
|
$
|
65.85
|
|
|
227,500
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
24,500
|
|
|
$
|
65.85
|
|
|
227,500
|
|
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
|
|
INVESTORS TITLE COMPANY
|
|
|
(Registrant)
|
|
|
|
|
|
By:
|
/s/ J. Allen Fine
|
|
|
J. Allen Fine, Chairman and Chief Executive
|
|
|
Officer
(Principal Executive Officer)
|
|
|
|
March 10, 2017
|
|
|
/s/ J. Allen Fine
|
|
/s/ James A. Fine, Jr.
|
J. Allen Fine, Chairman of the Board and
|
|
James A. Fine, Jr., President, Treasurer, Chief
|
Chief Executive Officer
|
|
Financial Officer, Chief Accounting Officer and
|
(Principal Executive Officer)
|
|
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/ R. Horace Johnson
|
|
/s/ James R. Morton
|
R. Horace Johnson, Director
|
|
James R. Morton, Director
|
|
|
|
/s/ David L. Francis
|
|
/s/ James H. Speed, Jr.
|
David L. Francis, Director
|
|
James H. Speed, Jr., Director
|
|
|
|
/s/ Richard M. Hutson, II
|
|
|
Richard M. Hutson, II, Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of Investment
|
Cost (1)
|
|
Market Value
|
|
Amount at which shown in the Balance Sheet (2)
|
||||||
|
|
|
|
|
|
||||||
Fixed maturities:
|
|
|
|
|
|
||||||
Bonds:
|
|
|
|
|
|
||||||
General obligations of U.S. states, territories and political subdivisions
|
$
|
29,163,453
|
|
|
$
|
29,307,663
|
|
|
$
|
29,307,663
|
|
Special revenue issuer obligations of U.S. states, territories and political subdivisions
|
43,158,632
|
|
|
44,092,544
|
|
|
44,092,544
|
|
|||
Public utilities
|
13,327,765
|
|
|
14,693,789
|
|
|
14,693,789
|
|
|||
Corporate debt securities
|
14,512,507
|
|
|
13,840,081
|
|
|
13,840,081
|
|
|||
Total fixed maturities
|
100,162,357
|
|
|
101,934,077
|
|
|
101,934,077
|
|
|||
|
|
|
|
|
|
||||||
Equity securities:
|
|
|
|
|
|
||||||
Common stocks:
|
|
|
|
|
|
||||||
Public utilities
|
563,857
|
|
|
900,904
|
|
|
900,904
|
|
|||
Banks, trusts and insurance companies
|
5,488,073
|
|
|
8,190,374
|
|
|
8,190,374
|
|
|||
Industrial, miscellaneous and all other
|
16,273,231
|
|
|
26,958,274
|
|
|
26,958,274
|
|
|||
Technology
|
2,510,871
|
|
|
5,129,707
|
|
|
5,129,707
|
|
|||
Total equity securities
|
24,836,032
|
|
|
41,179,259
|
|
|
41,179,259
|
|
|||
|
|
|
|
|
|
||||||
Other investments:
|
|
|
|
|
|
||||||
Short-term investments
|
6,558,840
|
|
|
6,558,840
|
|
|
6,558,840
|
|
|||
Other investments (3)
|
9,972,130
|
|
|
9,972,130
|
|
|
9,972,130
|
|
|||
Total other investments
|
16,530,970
|
|
|
16,530,970
|
|
|
16,530,970
|
|
|||
|
|
|
|
|
|
||||||
Total investments (3)
|
$
|
141,529,359
|
|
|
$
|
159,644,306
|
|
|
$
|
159,644,306
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
||||
Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
10,178,219
|
|
|
$
|
8,347,004
|
|
Investments in fixed maturities, available-for-sale
|
16,505,866
|
|
|
21,779,123
|
|
||
Investments in equity securities, available-for-sale
|
3,193,268
|
|
|
2,638,330
|
|
||
Short-term investments
|
3,162,283
|
|
|
3,005,647
|
|
||
Investments in affiliated companies
|
113,234,094
|
|
|
99,951,433
|
|
||
Other investments
|
4,318,296
|
|
|
3,089,550
|
|
||
Premium and fees receivable
|
99,878
|
|
|
43,690
|
|
||
Other receivables
|
1,986,634
|
|
|
3,080,245
|
|
||
Income taxes recoverable
|
2,562,589
|
|
|
1,733,314
|
|
||
Accrued interest and dividends
|
86,481
|
|
|
120,369
|
|
||
Property, net
|
2,340,605
|
|
|
2,288,776
|
|
||
Total Assets
|
$
|
157,668,213
|
|
|
$
|
146,077,481
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
2,370,963
|
|
|
$
|
3,267,274
|
|
Deferred income taxes, net
|
252,181
|
|
|
140,325
|
|
||
Total liabilities
|
2,623,144
|
|
|
3,407,599
|
|
||
|
|
|
|
||||
Stockholders’ Equity:
|
|
|
|
|
|
||
Preferred stock (1,000,000 authorized shares; no shares issued)
|
—
|
|
|
—
|
|
||
Common stock – no par value (10,000,000 authorized shares; 1,884,283 and 1,949,797 shares issued and outstanding 2016 and 2015, respectively, excluding 291,676 shares for 2016 and 2015 of common stock held by the Company’s subsidiary)
|
1
|
|
|
1
|
|
||
Retained earnings
|
143,283,621
|
|
|
131,186,866
|
|
||
Accumulated other comprehensive income
|
11,761,447
|
|
|
11,483,015
|
|
||
Total stockholders’ equity
|
155,045,069
|
|
|
142,669,882
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
157,668,213
|
|
|
$
|
146,077,481
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Investment income – interest and dividends
|
|
$
|
525,453
|
|
|
$
|
535,963
|
|
|
$
|
482,711
|
|
Net realized gain (loss) on investments
|
|
77,895
|
|
|
(152,026
|
)
|
|
9,169
|
|
|||
Rental income
|
|
772,123
|
|
|
765,134
|
|
|
772,256
|
|
|||
Miscellaneous income
|
|
77,074
|
|
|
385,058
|
|
|
59,569
|
|
|||
Total
|
|
1,452,545
|
|
|
1,534,129
|
|
|
1,323,705
|
|
|||
|
|
|
|
|
|
|
||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|||
Salaries, employee benefits and payroll taxes
|
|
664,436
|
|
|
651,957
|
|
|
673,729
|
|
|||
Office occupancy and operations
|
|
236,954
|
|
|
239,176
|
|
|
270,881
|
|
|||
Business development
|
|
99,229
|
|
|
76,684
|
|
|
49,059
|
|
|||
Taxes – other than payroll and income
|
|
183,566
|
|
|
213,466
|
|
|
200,718
|
|
|||
Professional and contract labor fees
|
|
377,738
|
|
|
378,265
|
|
|
192,064
|
|
|||
Other expenses
|
|
246,375
|
|
|
198,788
|
|
|
193,681
|
|
|||
Total
|
|
1,808,298
|
|
|
1,758,336
|
|
|
1,580,132
|
|
|||
|
|
|
|
|
|
|
||||||
Equity in Net Income of Affiliated Companies
|
|
19,665,205
|
|
|
12,640,260
|
|
|
9,777,925
|
|
|||
|
|
|
|
|
|
|
||||||
Income before Income Taxes
|
|
19,309,452
|
|
|
12,416,053
|
|
|
9,521,498
|
|
|||
|
|
|
|
|
|
|
||||||
Income Tax Benefit
|
|
(206,000
|
)
|
|
(133,000
|
)
|
|
(151,000
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net Income
|
|
19,515,452
|
|
|
12,549,053
|
|
|
9,672,498
|
|
|||
|
|
|
|
|
|
|
||||||
Net Loss (Income) Attributable to Noncontrolling Interests
|
|
7,666
|
|
|
(15,148
|
)
|
|
(23,523
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net Income Attributable to the Company
|
|
$
|
19,523,118
|
|
|
$
|
12,533,905
|
|
|
$
|
9,648,975
|
|
|
|
|
|
|
|
|
||||||
Basic Earnings per Common Share
|
|
$
|
10.23
|
|
|
$
|
6.32
|
|
|
$
|
4.75
|
|
|
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding – Basic
|
|
1,907,675
|
|
|
1,984,360
|
|
|
2,031,760
|
|
|||
|
|
|
|
|
|
|
||||||
Diluted Earnings per Common Share
|
|
$
|
10.19
|
|
|
$
|
6.30
|
|
|
$
|
4.74
|
|
|
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding – Diluted
|
|
1,915,057
|
|
|
1,989,799
|
|
|
2,037,534
|
|
|||
|
|
|
|
|
|
|
||||||
Cash Dividends Paid per Common Share
|
|
$
|
0.72
|
|
|
$
|
0.40
|
|
|
$
|
0.32
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
19,515,452
|
|
|
$
|
12,549,053
|
|
|
$
|
9,672,498
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Equity in net earnings of subsidiaries
|
(19,665,205
|
)
|
|
(12,640,260
|
)
|
|
(9,777,925
|
)
|
|||
Depreciation
|
93,086
|
|
|
112,690
|
|
|
136,369
|
|
|||
Amortization, net
|
163,989
|
|
|
192,654
|
|
|
210,768
|
|
|||
Share-based compensation expense related to stock appreciation rights and options
|
132,098
|
|
|
137,759
|
|
|
164,730
|
|
|||
Net loss on disposals of property
|
—
|
|
|
1,683
|
|
|
2,722
|
|
|||
Net realized (gain) loss on investments
|
(77,895
|
)
|
|
152,026
|
|
|
(19,231
|
)
|
|||
Net (earnings) loss from other investments
|
(13,135
|
)
|
|
(237,686
|
)
|
|
322
|
|
|||
(Benefit) provision for deferred income taxes
|
(18,000
|
)
|
|
13,000
|
|
|
(40,000
|
)
|
|||
Decrease (increase) in receivables
|
1,037,423
|
|
|
(847,177
|
)
|
|
(685,052
|
)
|
|||
(Increase) decrease in income taxes recoverable
|
(829,275
|
)
|
|
142,928
|
|
|
1,354,735
|
|
|||
Decrease (increase) in other assets
|
33,888
|
|
|
7,852
|
|
|
(24,650
|
)
|
|||
(Decrease) increase in accounts payable and accrued liabilities
|
(896,311
|
)
|
|
1,192,927
|
|
|
516,252
|
|
|||
Net cash (used in) provided by operating activities
|
(523,885
|
)
|
|
777,449
|
|
|
1,511,538
|
|
|||
|
|
|
|
|
|
||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|||
Purchase of subsidiary
|
(10,918,003
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends received from subsidiaries
|
17,330,948
|
|
|
7,630,835
|
|
|
5,051,664
|
|
|||
Purchases of available-for-sale securities
|
(1,783,223
|
)
|
|
(260,044
|
)
|
|
(6,883,612
|
)
|
|||
Purchases of short-term securities
|
(3,162,283
|
)
|
|
(2,721,578
|
)
|
|
(104,207
|
)
|
|||
Purchases of and net earnings from other investments
|
(1,552,769
|
)
|
|
(2,007,798
|
)
|
|
(964,197
|
)
|
|||
Proceeds from sales and maturities of available-for-sale securities
|
6,815,907
|
|
|
2,475,557
|
|
|
1,631,987
|
|
|||
Proceeds from sales and maturities of short-term securities
|
3,005,647
|
|
|
—
|
|
|
2,033,634
|
|
|||
Proceeds from sales and distributions of other investments
|
321,758
|
|
|
734,170
|
|
|
123,017
|
|
|||
Purchases of property
|
(144,915
|
)
|
|
(32,071
|
)
|
|
(5,200
|
)
|
|||
Net cash provided by investing activities
|
9,913,067
|
|
|
5,819,071
|
|
|
883,086
|
|
|||
|
|
|
|
|
|
||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|||
Repurchases of common stock
|
(6,219,670
|
)
|
|
(5,483,953
|
)
|
|
(1,055,765
|
)
|
|||
Exercise of stock appreciation rights and options
|
(200
|
)
|
|
54,988
|
|
|
27,100
|
|
|||
Proceeds from note payable
|
6,000,000
|
|
|
—
|
|
|
—
|
|
|||
Payments on note payable
|
(6,000,000
|
)
|
|
—
|
|
|
—
|
|
|||
Excess tax benefit
|
32,293
|
|
|
26,875
|
|
|
15,999
|
|
|||
Dividends paid
|
(1,370,390
|
)
|
|
(789,907
|
)
|
|
(650,433
|
)
|
|||
Net cash used in financing activities
|
(7,557,967
|
)
|
|
(6,191,997
|
)
|
|
(1,663,099
|
)
|
|||
|
|
|
|
|
|
||||||
Net Increase in Cash and Cash Equivalents
|
1,831,215
|
|
|
404,523
|
|
|
731,525
|
|
|||
Cash and Cash Equivalents, Beginning of Period
|
8,347,004
|
|
|
7,942,481
|
|
|
7,210,956
|
|
|||
Cash and Cash Equivalents, End of Period
|
$
|
10,178,219
|
|
|
$
|
8,347,004
|
|
|
$
|
7,942,481
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures:
|
|
|
|
|
|
||||||
Income tax payments, net
|
$
|
4,964,000
|
|
|
$
|
4,598,000
|
|
|
$
|
2,699,000
|
|
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 subsidiaries were as follows:
|
Subsidiaries
|
2016
|
|
2015
|
|
2014
|
||||||
Investors Title Insurance Company, net*
|
$
|
15,838,248
|
|
|
$
|
7,134,823
|
|
|
$
|
4,906,664
|
|
Investors Title Exchange Corporation
|
100,000
|
|
|
245,000
|
|
|
50,000
|
|
|||
Investors Title Accommodation Corporation
|
45,000
|
|
|
12,000
|
|
|
10,000
|
|
|||
Investors Capital Management Company
|
—
|
|
|
9,012
|
|
|
40,000
|
|
|||
Investors Trust Company
|
750,000
|
|
|
—
|
|
|
—
|
|
|||
Investors Title Commercial Agency, LLC
|
125,000
|
|
|
230,000
|
|
|
45,000
|
|
|||
National Investors Holdings, LLC
|
472,700
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
17,330,948
|
|
|
$
|
7,630,835
|
|
|
$
|
5,051,664
|
|
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, 2016
|
|||||||||||||||||||||||||||||||||||||
Title Insurance
|
$
|
—
|
|
|
$
|
35,305,000
|
|
|
$
|
—
|
|
|
$
|
475,700
|
|
|
$
|
122,095,381
|
|
|
$
|
4,119,598
|
|
|
$
|
242,953
|
|
|
$
|
—
|
|
|
$
|
103,585,220
|
|
|
N/A
|
All Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
564,891
|
|
|
—
|
|
|
—
|
|
|
6,532,789
|
|
|
N/A
|
|||||||||
|
$
|
—
|
|
|
$
|
35,305,000
|
|
|
$
|
—
|
|
|
$
|
475,700
|
|
|
$
|
122,095,381
|
|
|
$
|
4,684,489
|
|
|
$
|
242,953
|
|
|
$
|
—
|
|
|
$
|
110,118,009
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Year Ended December 31, 2015
|
|||||||||||||||||||||||||||||||||||||
Title Insurance
|
$
|
—
|
|
|
$
|
37,788,000
|
|
|
$
|
—
|
|
|
$
|
341,191
|
|
|
$
|
112,475,686
|
|
|
$
|
3,957,187
|
|
|
$
|
4,478,494
|
|
|
$
|
—
|
|
|
$
|
98,417,207
|
|
|
N/A
|
All Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
574,132
|
|
|
—
|
|
|
—
|
|
|
6,527,318
|
|
|
N/A
|
|||||||||
|
$
|
—
|
|
|
$
|
37,788,000
|
|
|
$
|
—
|
|
|
$
|
341,191
|
|
|
$
|
112,475,686
|
|
|
$
|
4,531,319
|
|
|
$
|
4,478,494
|
|
|
$
|
—
|
|
|
$
|
104,944,525
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Year Ended December 31, 2014
|
|||||||||||||||||||||||||||||||||||||
Title Insurance
|
$
|
—
|
|
|
$
|
36,677,000
|
|
|
$
|
—
|
|
|
$
|
236,401
|
|
|
$
|
109,963,556
|
|
|
$
|
3,741,873
|
|
|
$
|
5,229,716
|
|
|
$
|
—
|
|
|
$
|
98,620,374
|
|
|
N/A
|
All Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
517,628
|
|
|
—
|
|
|
—
|
|
|
5,780,698
|
|
|
N/A
|
|||||||||
|
$
|
—
|
|
|
$
|
36,677,000
|
|
|
$
|
—
|
|
|
$
|
236,401
|
|
|
$
|
109,963,556
|
|
|
$
|
4,259,501
|
|
|
$
|
5,229,716
|
|
|
$
|
—
|
|
|
$
|
104,401,072
|
|
|
N/A
|
|
Gross Amount
|
|
Ceded to Other Companies
|
|
Assumed from Other Companies
|
|
Net Amount
|
|
Percentages of Amount Assumed to Net
|
|||||||||
Year Ended December 31, 2016
|
||||||||||||||||||
Title Insurance
|
$
|
122,219,077
|
|
|
$
|
140,942
|
|
|
$
|
17,246
|
|
|
$
|
122,095,381
|
|
|
0.01
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Year Ended December 31, 2015
|
||||||||||||||||||
Title Insurance
|
$
|
112,656,750
|
|
|
$
|
214,667
|
|
|
$
|
33,603
|
|
|
$
|
112,475,686
|
|
|
0.03
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Year Ended December 31, 2014
|
||||||||||||||||||
Title Insurance
|
$
|
110,065,581
|
|
|
$
|
140,017
|
|
|
$
|
37,992
|
|
|
$
|
109,963,556
|
|
|
0.03
|
%
|
Description
|
Balance at Beginning of Period
|
|
Additions Charged to Costs and Expenses
|
|
Additions Charge to Other Accounts – Describe
|
|
Deductions – Describe
|
|
|
Balance at End of Period
|
||||||||||
2016
|
||||||||||||||||||||
Premiums Receivable:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation Provision
|
$
|
3,552,779
|
|
|
$
|
2,679,300
|
|
|
$
|
—
|
|
|
$
|
(5,859,907
|
)
|
(a)
|
|
$
|
372,172
|
|
Reserves for Claims
|
$
|
37,788,000
|
|
|
$
|
242,953
|
|
|
$
|
—
|
|
|
$
|
(2,725,953
|
)
|
(b)
|
|
$
|
35,305,000
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2015
|
||||||||||||||||||||
Premiums Receivable:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation Provision
|
$
|
3,022,731
|
|
|
$
|
6,267,911
|
|
|
$
|
—
|
|
|
$
|
(5,737,863
|
)
|
(a)
|
|
$
|
3,552,779
|
|
Reserves for Claims
|
$
|
36,677,000
|
|
|
$
|
4,478,494
|
|
|
$
|
—
|
|
|
$
|
(3,367,494
|
)
|
(b)
|
|
$
|
37,788,000
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2014
|
||||||||||||||||||||
Premiums Receivable:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation Provision
|
$
|
2,620,903
|
|
|
$
|
6,287,694
|
|
|
$
|
—
|
|
|
$
|
(5,885,866
|
)
|
(a)
|
|
$
|
3,022,731
|
|
Reserves for Claims
|
$
|
35,360,000
|
|
|
$
|
5,229,716
|
|
|
$
|
—
|
|
|
$
|
(3,912,716
|
)
|
(b)
|
|
$
|
36,677,000
|
|
(a)
|
Canceled premiums
|
(b)
|
Payments of claims, net of recoveries
|
Exhibit
Number
|
Description
|
|
Location
|
|
|
|
|
2.1
|
Stock Purchase Agreement between National Investors Holdings, LLC, University Title Company and the sellers dated October 12, 2016
|
|
Filed herewith
|
|
|
|
|
3.1(a)
|
Articles of Incorporation dated January 22, 1973
|
|
Incorporated by reference to Exhibit 4.1 to Form S-8 filed August 10, 2009, File No. 333-161209
|
|
|
|
|
3.1(b)
|
Articles of Amendment to the Articles of Incorporation, dated February 8, 1973
|
|
Incorporated by reference to Exhibit 4.2 to Form S-8 filed August 10, 2009, File No. 333-161209
|
|
|
|
|
3.1(c)
|
Articles of Amendment to Articles of Incorporation, dated May 14, 1987
|
|
Incorporated by reference to Exhibit 4.3 to Form S-8 filed August 10, 2009, File No. 333-161209
|
|
|
|
|
3.1(d)
|
Articles of Amendment to Articles of Incorporation, dated May 15, 2002
|
|
Incorporated by reference to Exhibit 3.3 to Form 10-Q for the quarter ended June 30, 2002, File No. 11774
|
|
|
|
|
3.1(e)
|
Articles of Amendment to Articles of Incorporation, dated November 2, 2002
|
|
Incorporated by reference to Exhibit 3.4 to Form 10-Q for the quarter ended March 31, 2003, File No. 11774
|
|
|
|
|
3.1(f)
|
Articles of Amendment to Articles of Incorporation, dated October 31, 2012
|
|
Incorporated by reference to Exhibit 3.1 to Form 8-K filed on October 31, 2012, File No. 11774
|
|
|
|
|
3.2
|
Amended and Restated By-laws, dated November 9, 2015
|
|
Incorporated by reference to Exhibit 3.1 to Form 10-Q filed on November 9, 2015, File No. 11774
|
|
|
|
|
4.1
|
Amended and Restated Rights Agreement dated October 31, 2012, between the Company and Broadridge Issuer Solutions, Inc., as Rights Agent, dated October 31, 2012
|
|
Incorporated by reference to Exhibit 4.1 to Form 8-K filed on November 2, 2012, File No. 11774
|
|
|
|
|
10.1(a)*
|
2001 Stock Option and Restricted Stock Plan, as amended and restated effective May 17, 2006
|
|
Incorporated by reference to Exhibit 10.1 to Form 8-K filed on May 23, 2006, File No. 11774
|
|
|
|
|
10.1(b)*
|
Form of Stock Appreciation Rights Award Agreement under 2001 Stock Option and Restricted Stock Plan
|
|
Incorporated by reference to Exhibit 10.2 to Form 8-K filed on May 23, 2006, File No. 11774
|
|
|
|
|
10.1(c)*
|
Form of Stock Appreciation Rights Agreement under 2001 Stock Option and Restricted Stock Plan
|
|
Incorporated by reference to Exhibit 10.1 to Form 8-K filed on March 6, 2009, File No. 11774
|
|
|
|
|
10.2*
|
Amended and Restated Employment Agreement effective January 1, 2009 for J. Allen Fine
|
|
Incorporated by reference to Exhibit 10.7 to Form 10-K for the year ended December 31, 2008, File No. 11774
|
|
|
|
|
10.3*
|
Amended and Restated Employment Agreement effective January 1, 2009 for James A. Fine, Jr.
|
|
Incorporated by reference to Exhibit 10.8 to Form 10-K for the year ended December 31, 2008, File No. 11774
|
|
|
|
|
10.4*
|
Amended and Restated Employment Agreement effective January 1, 2009 for W. Morris Fine
|
|
Incorporated by reference to Exhibit 10.9 to Form 10-K for the year ended December 31, 2008, File No. 11774
|
|
|
|
|
10.5*
|
Amended and Restated Death Benefit Plan Agreement effective January 1, 2009 for J. Allen Fine
|
|
Incorporated by reference to Exhibit 10.10 to Form 10-K for the year ended December 31, 2008, File No. 11774
|
|
|
|
|
10.6*
|
Amended and Restated Death Benefit Plan Agreement effective January 1, 2009 for James A. Fine, Jr.
|
|
Incorporated by reference to Exhibit 10.11 to Form 10-K for the year ended December 31, 2008, File No. 11774
|
|
|
|
|
10.7*
|
Death Benefit Plan Agreement effective January 1, 2009 for W. Morris Fine
|
|
Incorporated by reference to Exhibit 10.12 to Form 10-K for the year ended December 31, 2008, File No. 11774
|
|
|
|
|
10.8*
|
Amended and Restated Nonqualified Deferred Compensation Plan effective January 1, 2009
|
|
Incorporated by reference to Exhibit 10.13 to Form 10-K for the year ended December 31, 2008, File No. 11774
|
|
|
|
|
10.9*
|
Amended and Restated Nonqualified Supplemental Retirement Benefit Plan effective January 1, 2009
|
|
Incorporated by reference to Exhibit 10.14 to Form 10-K for the year ended December 31, 2008, File No. 11774
|
|
|
|
|
10.10(a)*
|
2009 Stock Appreciation Right Plan effective March 2, 2009
|
|
Incorporated by reference to Appendix A to the Proxy Statement dated May 26, 2009, File No. 11774
|
|
|
|
|
10.10(b)*
|
Form of Stock Appreciation Rights Agreement under 2009 Stock Appreciation Right Plan
|
|
Incorporated by reference to Exhibit 10 to Form 10-Q for the quarter ended June 30, 2011, File No. 11774
|
|
|
|
|
10.11
|
Business/Commercial Loan Agreement between the Company and First Citizens Bank dated October 27, 2016
|
|
Filed herewith
|
|
|
|
|
10.12
|
Promissory note between the Company and First Citizens Bank dated October 27, 2016
|
|
Filed herewith
|
|
|
|
|
10.13
|
Commercial Security Agreement between the Company and First Citizens bank dated October 27, 2016
|
|
Filed herewith
|
|
|
|
|
21
|
Subsidiaries of Registrant
|
|
Filed herewith
|
|
|
|
|
23
|
Consent of Independent Registered Public Accounting Firm
|
|
Filed herewith
|
|
|
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
32
|
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Furnished herewith
|
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
Filed herewith
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
|
|
|
|
*
|
Management contract or compensatory plan or arrangement
|
|
|
|
|
§1.
|
Definitions
|
1
|
|
|
|
|
|
|
|
§2.
|
Purchase and Sale of Company Shares
|
6
|
|
|
|
(a)
|
Transaction
|
6
|
|
|
(b)
|
Preliminary Purchase Price
|
6
|
|
|
(c)
|
Closing
|
6
|
|
|
(d)
|
Deliveries at Closing
|
7
|
|
|
(e)
|
Closing Statement
|
7
|
|
|
|
|
|
|
§3.
|
Representations and Warranties Concerning Transaction
|
7
|
|
|
|
(a)
|
Sellers' Representations and Warranties
|
7
|
|
|
(b)
|
Company Shares
|
8
|
|
|
(c)
|
Buyer's Representations and Warranties
|
8
|
|
|
|
|
|
|
§4.
|
Representations and Warranties Concerning Company
|
9
|
|
|
|
(a)
|
Organization, Qualification, and Corporate Power
|
9
|
|
|
(b)
|
Capitalization
|
10
|
|
|
(c)
|
Non-contravention
|
10
|
|
|
(d)
|
Brokers' Fees
|
10
|
|
|
(e)
|
Assets
|
10
|
|
|
(f)
|
No Subsidiaries
|
10
|
|
|
(g)
|
Financial Statements
|
10
|
|
|
(h)
|
Events Subsequent to Most Recent Financial Year End
|
11
|
|
|
(i)
|
Undisclosed Liabilities
|
12
|
|
|
(j)
|
Legal Compliance
|
13
|
|
|
(k)
|
Tax Matters
|
13
|
|
|
(l)
|
Real Property
|
15
|
|
|
(m)
|
Intellectual Property
|
16
|
|
|
(n)
|
Tangible Assets
|
17
|
|
|
(o)
|
Contracts
|
17
|
|
|
(p)
|
[Reserved]
|
18
|
|
|
(q)
|
Powers of Attorney
|
18
|
|
|
(r)
|
Insurance
|
19
|
|
|
(s)
|
Litigation
|
19
|
|
|
(t)
|
Employees
|
19
|
|
|
(u)
|
Employee Benefits
|
20
|
|
|
(v)
|
Guaranties
|
22
|
|
|
(w)
|
Environmental, Health, and Safety Matters
|
22
|
|
|
(x)
|
Title Insurance Agency Business Matters
|
23
|
|
|
(y)
|
Computer and Technology Security
|
24
|
|
|
(z)
|
Certain Business Relationships with Company
|
24
|
|
|
(aa)
|
Customers and Suppliers
|
24
|
|
|
(bb)
|
Data Privacy
|
25
|
|
|
(cc)
|
Disclosure
|
25
|
|
|
|
|
|
|
§5.
|
Pre-Closing Covenants
|
25
|
|
|
|
(a)
|
General
|
25
|
|
|
(b)
|
Notices and Consents
|
25
|
|
|
(c)
|
Operation of Business
|
25
|
|
|
(d)
|
Preservation of Business
|
26
|
|
|
(e)
|
Full Access
|
26
|
|
|
(f)
|
Notice of Developments
|
26
|
|
|
(g)
|
Exclusivity
|
26
|
|
|
(h)
|
Maintenance of Leased Real Property
|
26
|
|
|
(i)
|
Leases
|
26
|
|
|
(j)
|
Tax Matters
|
26
|
|
|
(k)
|
E&O Policy
|
27
|
|
|
(l)
|
Internet Domain Registration
|
27
|
|
§6.
|
Post-Closing Covenants
|
27
|
|
|
|
(a)
|
General
|
27
|
|
|
(b)
|
Litigation Support
|
27
|
|
|
(c)
|
Transition
|
27
|
|
|
(d)
|
Confidentiality
|
28
|
|
|
(e)
|
Non-Compete Covenant
|
28
|
|
|
(f)
|
Seller Release of Company
|
29
|
|
|
(g)
|
Buyer Continuation of Employee Benefit Policies and Procedures
|
29
|
|
|
(h)
|
Transition Bonuses
|
29
|
|
|
|
|
|
|
§7.
|
Conditions to Obligation to Close
|
30
|
|
|
|
(a)
|
Conditions to Buyer's Obligation
|
30
|
|
|
(b)
|
Conditions to Sellers' Obligation
|
32
|
|
|
|
|
|
|
§8.
|
Remedies for Breaches of This Agreement
|
32
|
|
|
|
(a)
|
Survival of Representations and Warranties
|
32
|
|
|
(b)
|
Indemnification Provisions for Buyer's Benefit
|
33
|
|
|
(c)
|
Indemnification Provisions for Sellers' Benefit
|
34
|
|
|
(d)
|
Matters Involving Third Parties
|
34
|
|
|
(e)
|
Determination of Adverse Consequences; Limitations on Adverse Consequences
|
35
|
|
|
(f)
|
Other Indemnification Provisions
|
35
|
|
|
|
|
|
|
§9.
|
Tax Matters
|
36
|
|
|
|
(a)
|
Tax Indemnification
|
36
|
|
|
(b)
|
Straddle Period
|
36
|
|
|
(c)
|
S Corporation Status
|
36
|
|
|
(d)
|
Tax Periods Ending on or before Closing Date
|
37
|
|
|
(e)
|
Cooperation on Tax Matters
|
37
|
|
|
(f)
|
Tax-Sharing Agreements
|
37
|
|
|
(g)
|
Certain Taxes
|
37
|
|
|
(h)
|
Contests
|
37
|
|
|
|
|
|
|
§10.
|
Termination
|
38
|
|
|
|
(a)
|
Termination of Agreement
|
38
|
|
|
(b)
|
Effect of Termination
|
38
|
|
|
|
|
|
|
§11.
|
Miscellaneous
|
38
|
|
|
|
(a)
|
Nature of Sellers' Obligations
|
38
|
|
|
(b)
|
Press Releases and Public Announcements
|
39
|
|
|
(c)
|
No Third-Party Beneficiaries
|
39
|
|
|
(d)
|
Entire Agreement
|
39
|
|
|
(e)
|
Succession and Assignment
|
39
|
|
|
(f)
|
Counterparts
|
39
|
|
|
(g)
|
Headings
|
39
|
|
|
(h)
|
Notices
|
39
|
|
|
(i)
|
Governing Law
|
40
|
|
|
(j)
|
Amendments and Waivers
|
40
|
|
|
(k)
|
Severability
|
40
|
|
|
(l)
|
Expenses
|
40
|
|
|
(m)
|
Construction
|
41
|
|
|
(n)
|
Incorporation of Exhibits, Annexes, and Schedules
|
41
|
|
|
(o)
|
Specific Performance
|
41
|
|
|
(p)
|
Submission to Jurisdiction
|
41
|
|
•
|
The
"Borrower"
is: Investors Title Company
|
•
|
The
"Lender"
is First-Citizens Bank & Trust Company, whose address for notice purposes is First-Citizens Bank & Trust Company, ATTN: Loan Servicing Department- DAC20, P.O. Box 26592, Raleigh, North Carolina 27611-6592.
|
(i)
|
Special Form hazard insurance on any Collateral consisting of tangible personal property that secures the Loan.
|
(ii)
|
Professional malpractice insurance, if required by Lender.
|
(iii)
|
Any other insurance required by this Agreement, the Related Documents, or Lender.
|
(i)
|
The term "Business Entity" refers to any Borrower or Guarantor that is a corporation, partnership, limited partnership, or limited liability company.
|
(ii)
|
The term "declare the Loan to be in default" means that Lender gives written notice to Borrower that an Event of Default has occurred and that the Loan is in default. If Lender does declare the Loan to be in default, Lender may, at that time or at any time thereafter, (i) increase the interest rate on the Loan to a default rate, (ii) terminate Borrower's ability to obtain Advances, (iii) accelerate the Indebtedness and demand the immediate payment of the Indebtedness in full, and/or (iv) take such other actions as Lender is permitted to take following the occurrence of an Event of Default.
|
(iii)
|
The term "Key Person" means an individual whose skills, qualifications, experience, business acumen, ownership interest in, and/or position with a Business Entity are considered by Lender to be important to the ongoing ability of the Business Entity to meet its debt obligations, to continue in business, and to prosper and grow.
|
(iv)
|
The term "material change in ownership, control, or management" means (i) any sales, transfers, or conveyances that, in the aggregate, total twenty-five percent (25%) or more of the voting stock, partnership interests, or limited liability company interests, as the case may be, of any Business Entity, unless such sales, transfers, or conveyances were approved in advance by Lender in writing; (ii) the death or incompetence of any Key Person; and/or (iii) the withdrawal, resignation, or expulsion of any Key Person from the ownership, management, or control of a Business Entity.
|
(v)
|
The term "Remaining Guarantors" refers to all Guarantors
other than
the individual whose death, incompetence, withdrawal, resignation, or expulsion caused the Trigger Event.
|
(vi)
|
The term "Remaining Obligors" refers to all Borrowers and Guarantors
other than
the individual whose death, incompetence, withdrawal, resignation, or expulsion caused the Trigger Event.
|
(vii)
|
The term "Updated Management Information" means detailed information describing the then-current ownership, control, and management structure of a Business Entity, including information about the qualifications, skills, and experience of those individuals who own, control, and are (or will become) responsible for the day-to-day management and operations of the Business Entity.
|
1.
|
Borrower will have a period of sixty (60) days following the occurrence of a Trigger Event within which to provide Lender with updated financial information concerning the Remaining Obligors. If Borrower fails to provide the required updated information within sixty (60) days following the occurrence of the Trigger Event, Lender may declare the Loan to be in default solely because of the occurrence of the Trigger Event.
|
2.
|
Provided Lender receives the required updated information within the time prescribed above, Lender will promptly evaluate the credit worthiness and financial strength of the Remaining Obligors and the nature, value, condition, and sufficiency of the Collateral using its then-current credit underwriting standards. Following that evaluation:
|
(a)
|
If Lender determines that (i) the Remaining Obligors continue to have the willingness and financial strength sufficient to enable them to repay the Loan as originally contemplated by Lender; (ii) there has been no material deterioration in the value or condition of the Collateral; (iii) Lender has in place properly executed and enforceable Guaranties from the Remaining Guarantors that are acceptable to, and deemed sufficient by, Lender; and (iv) the likelihood of Lender being repaid in accordance with the terms of this Agreement and the Related Documents has not been materially impaired, then Lender will not declare the Loan to be in default, increase the interest rate on the Loan to a default rate, accelerate the Indebtedness, or take any other adverse action solely because of the occurrence of the Trigger Event. In addition, Lender will (i) reinstate any credit privileges suspended solely because of the occurrence of the Trigger Event; and (ii) consider releasing from any further liability the individual or the estate of the individual whose death, incompetence, withdrawal, resignation, or expulsion caused the Trigger Event.
|
(b)
|
If, in Lender's judgment, any of the conditions set forth in section 2(a) above are not met, Lender will promptly notify Borrower of that determination. Borrower will have sixty (60) days thereafter within which to provide to Lender additional guarantors who are acceptable to Lender and who have signed, or have agreed to sign, enforceable Guaranties satisfactory to, and in amounts that are deemed sufficient by, Lender. This may be accomplished by (i) tendering one or more additional guarantors (each a "New Guarantor") acceptable to Lender, and/or (ii) having one or more of the Remaining Guarantors who previously signed a limited Guaranty agree to increase the amount or percentage of their Guaranty ("Consenting Guarantor"). Within that same sixty (60) day period, each New Guarantor and Consenting Guarantor must provide Lender with such financial information as Lender may reasonably request to evaluate the New Guarantor's or Consenting Guarantor's credit worthiness and financial strength.
|
3.
|
Provided Lender receives the information and executed agreements required by, and within the time prescribed by, section 2(b) above, Lender will promptly evaluate (or re-evaluate, as the case may be), utilizing its then-current credit underwriting standards, the credit worthiness and financial strength of each New Guarantor and each Consenting Guarantor. Following that evaluation:
|
(a)
|
If (i) Lender is satisfied with the credit worthiness and financial strength of each New Guarantor and each Consenting Guarantor; (ii) each New Guarantor and each Consenting Guarantor executes and delivers to Lender a new Guaranty satisfactory in form and content to Lender and to Lender's counsel within fifteen (15) days of Lender's request for a new Guaranty; and (iii) Lender determines thereafter that Lender has in place properly executed and enforceable Guaranties from New Guarantors, Consenting Guarantors, and Remaining Guarantors that are acceptable to and deemed sufficient by Lender, then Lender will not declare the Loan to be in default, increase the interest rate on the Loan to a default rate, accelerate the Indebtedness, or take any other adverse action solely because of the occurrence of the Trigger Event. In addition, Lender will (i) reinstate any credit privileges suspended solely because of the occurrence of the Trigger Event; and (ii) consider releasing from any further liability the individual, or the estate of the individual, whose death, incompetence, withdrawal, resignation, or expulsion caused the Trigger Event.
|
(b)
|
If, in Lender's judgment, any of the conditions set forth in section 3(a) above are not met, then Lender may declare the Loan to be in default solely because of the occurrence of the Trigger Event.
|
4.
|
Lender may condition Lender's approval and acceptance of each New Guarantor and each new Guaranty given by a New Guarantor and/or a Consenting Guarantor upon such commercially reasonable requirements as Lender may deem necessary to protect Lender's interests. For example, if a New Guarantor is not a natural person, Lender may require a legal opinion from an attorney acceptable to Lender to the effect that (i) the New Guarantor is duly organized, validly existing, and in good standing; (ii) the Guaranty has been duly authorized, executed, and delivered; and (iii) the Guaranty is valid and enforceable in accordance with its terms. If the New Guarantor is a natural person, Lender may require the New Guarantor to be a resident of a particular state, and, depending on the state in which the New Guarantor resides, require the consent or joinder of the spouse of the New Guarantor.
|
BORROWER:
|
|
LENDER:
|
INVESTORS TITLE COMPANY
|
|
FIRST-CITIZENS BANK & TRUST COMPANY
|
By:
/s/ James A. Fine, Jr.
|
|
By:
/s/ Sam Nichols
|
Print/Type Name: James A. Fine, Jr.
|
|
Print/Type Name: Sam Nichols
|
Title: President
|
|
Title: Senior Vice President
|
Borrower:
|
Investors Title Company
|
|
Lender:
|
First-Citizens Bank & Trust
|
|
121 N. Columbia St.
|
|
|
Durham Main Office
|
|
Chapel Hill, NC 27514-3502
|
|
|
c/o Loan Servicing Department DAC20
|
|
|
|
|
P.O. Box 26592
|
|
|
|
|
Raleigh, NC 27611-6592
|
Grantor:
|
INVESTORS TITLE COMPANY
|
|
Lender:
|
First-Citizens Bank & Trust
|
|
121 N. Columbia St.
|
|
|
Durham Main Office
|
|
Chapel Hill, NC 27514-3502
|
|
|
c/o Loan Servicing Department DAC20
|
|
|
|
|
P.O. Box 26592
|
|
|
|
|
Raleigh, NC 27611-6592
|
(C)
|
All accounts, general intangibles, instruments, rents, monies, payments; and all other rights, arising out of a sale, lease, consignment or other disposition of any of the property described in this Collateral section.
|
(D)
|
All proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in this Collateral section, and sums due from a third party who has damaged or destroyed the Collateral or from that party's insurer, whether due to judgment, settlement or other process.
|
(E)
|
All records and data relating to any of the property described in this Collateral section, whether in the form of a writing, photograph, microfilm, microfiche, or electronic media, together with all of Grantor's right, title, and interest in and to all computer software required to utilize, create, maintain, and process any such records or data on electronic media.
|
BY:
|
/S/ JAMES A. FINE JR.
|
|
JAMES A. FINE JR, President of INVESTORS TITLE COMPANY
|
|
Percent
|
Names Under Which
|
State of
|
Name of Subsidiary
|
Ownership
|
Subsidiaries Do Business
|
Incorporation
|
|
|
|
|
Investors Title Insurance Company
|
100%
|
Investors Title Insurance Company
|
North Carolina
|
|
|
|
|
National Investors Title Insurance Company
|
100%
|
National Investors Title Insurance Company
|
Texas
|
|
|
|
|
Investors Title Exchange Corporation
|
100%
|
Investors Title Exchange Corporation
|
North Carolina
|
|
|
|
|
Investors Title Accommodation Corporation
|
100%
|
Investors Title Accommodation Corporation
|
South Carolina
|
|
|
|
|
Investors Title Management Services, Inc.
|
100%
|
Investors Title Management Services, Inc.
|
North Carolina
|
|
|
|
|
Investors Capital Management Company
|
100%
|
Investors Capital Management Company
|
North Carolina
|
|
|
|
|
Investors Title Commercial Agency, LLC
|
100%
|
Investors Title Commercial Agency, LLC
|
North Carolina
|
|
|
|
|
Investors Trust Company
|
100%
|
Investors Trust Company
|
North Carolina
|
|
|
|
|
National Investors Holdings, LLC
|
100%
|
National Investors Holdings, LLC
|
Texas
|
|
|
|
|
United Title Agency, LLC
|
100%
|
United Title Agency, LLC
|
Michigan
|
|
|
|
|
University Title Company
|
100%
|
University Title Company
|
Texas
|
|
|
|
|
1st Investors Title Agency, LLC
|
68.1%
|
1st Investors Title Agency, LLC
|
Michigan
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Investors Title Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of this annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 10-K of Investors Title Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of this annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
(i)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
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(ii)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated:
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March 10, 2017
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/s/ J. Allen Fine
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J. Allen Fine
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Chief Executive Officer
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Dated:
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March 10, 2017
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/s/ James A. Fine, Jr.
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James A. Fine, Jr.
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Chief Financial Officer
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