Investors Title Company (NASDAQ: ITIC), today announced its results for
the fourth quarter and year ended December 31, 2012. For the quarter,
net income increased 68.3% to $3,162,684, or $1.51 per diluted share,
compared with $1,879,459, or $0.88 per diluted share, for the prior year
period. For the year, net income increased 60.1% to $11,102,496, or
$5.24 per diluted share, compared with $6,933,936, or $3.20 per diluted
share, for the prior year period.
The increase in net income for the quarter and the year was driven
primarily by increases in premium volumes, reflecting widespread
increases in overall mortgage lending activity. New premium charges and
rate increases in a number of our markets also contributed to the
increase.
For the quarter, premium volumes increased 66.8%. Operating expenses
increased 62.4% versus the prior year period, primarily due to increases
in commissions to agents, claims, and payroll expense. Commissions to
agents increased commensurate with the increase in agency premiums. The
claims provision rate as a percentage of net premiums written tracked
favorably to the long-term trend, and was virtually flat for the quarter
compared with the prior year quarter. The increase in payroll expense
was primarily driven by an increase in staffing levels in software
development.
For the year, revenues increased 26.9% over the prior year to
$115,079,092, due to high levels of overall mortgage activity, and new
premium charges and rate increases. Operating expenses followed the
trend for the quarter, increasing 21.9%.
Chairman J. Allen Fine added, “We are pleased to report record levels of
revenue and earnings per share for 2012. A favorable interest rate
environment led to high levels of mortgage lending across the industry,
with increases in both purchase and refinance activity versus the prior
year. In addition, we benefitted from ongoing expansion of our agent
base and targeted entry into new markets. Our balance sheet and
financial condition remain strong, as total assets reached an all-time
high of $171.9 million as of year-end. In the coming year, we will
continue to emphasize the expansion of our agency base and operational
efficiency.”
Investors Title Company is engaged through its subsidiaries in the
business of issuing and underwriting title insurance policies. The
Company also provides investment management services to individuals,
companies, banks and trusts, as well as services in connection with
tax-deferred exchanges of like-kind property.
Certain statements contained herein may constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include, among other statements, any
predictions regarding future agency base expansion or increasing
operational efficiency. These statements involve a number of risks and
uncertainties that could cause actual results to differ materially from
anticipated and historical results. Such risks and uncertainties
include, without limitation: the cyclical demand for title insurance due
to changes in the residential and commercial real estate markets; the
occurrence of fraud, defalcation or misconduct; variances between actual
claims experience and underwriting and reserving assumptions; declines
in the performance of the Company’s investments; government regulation;
and other considerations set forth under the caption “Risk Factors” in
the Company’s Annual Report on Form 10-K for the year ended December 31,
2011, as filed with the Securities and Exchange Commission, and in
subsequent filings.
Investors Title Company and Subsidiaries
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Consolidated Statements of Income
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For the Three and Twelve Months Ended December 31, 2012 and
2011
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(Unaudited)
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Three Months Ended
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Twelve Months Ended
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December 31
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December 31
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2012
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2011
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2012
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2011
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Revenues:
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Net premiums written
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$
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30,403,989
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$
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18,226,131
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$
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102,331,102
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$
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81,529,333
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Investment income - interest and dividends
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1,030,659
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929,791
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3,980,411
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3,595,036
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Net realized gain on investments
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708,420
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107,731
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1,066,239
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28,559
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Other
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2,164,017
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1,563,400
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7,701,340
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5,532,228
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Total Revenues
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34,307,085
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20,827,053
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115,079,092
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90,685,156
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Operating Expenses:
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Commissions to agents
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18,743,705
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10,261,013
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59,427,070
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49,596,250
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Provision for claims
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1,647,592
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1,041,168
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6,072,115
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3,342,427
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Salaries, employee benefits and payroll taxes
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5,799,813
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4,442,291
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21,877,186
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18,552,504
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Office occupancy and operations
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1,016,904
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886,735
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3,936,653
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3,722,803
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Business development
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600,832
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583,317
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1,887,398
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1,706,834
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Filing fees, franchise and local taxes
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172,176
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104,483
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846,168
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516,380
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Premium and retaliatory taxes
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572,854
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361,662
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1,885,760
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1,729,830
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Professional and contract labor fees
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832,303
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381,158
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2,487,582
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1,513,466
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Other
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123,754
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112,767
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579,253
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505,726
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Total Operating Expenses
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29,509,933
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18,174,594
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98,999,185
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81,186,220
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Income Before Income Taxes
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4,797,152
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2,652,459
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16,079,907
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9,498,936
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Provision For Income Taxes
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1,650,000
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773,000
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4,889,000
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2,565,000
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Net Income
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3,147,152
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1,879,459
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11,190,907
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6,933,936
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Less: Net (Loss) Income Attributable to Redeemable Noncontrolling
Interests
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(15,532
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)
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-
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88,411
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-
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Net Income Attributable to the Company
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$
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3,162,684
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$
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1,879,459
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$
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11,102,496
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$
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6,933,936
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Basic Earnings Per Common Share
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$
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1.54
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$
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0.89
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$
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5.33
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$
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3.22
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Weighted Average Shares Outstanding - Basic
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2,055,703
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2,112,675
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2,081,703
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2,151,350
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Diluted Earnings Per Common Share
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$
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1.51
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$
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0.88
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$
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5.24
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$
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3.20
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Weighted Average Shares Outstanding - Diluted
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2,093,538
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2,132,780
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2,116,793
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2,169,636
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Investors Title Company and Subsidiaries
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Consolidated Balance Sheets
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As of December 31, 2012 and 2011
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(Unaudited)
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December 31, 2012
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December 31, 2011
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Assets:
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Investments in securities:
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Fixed maturities, available-for-sale, at fair value
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$
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81,936,978
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$
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85,407,365
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Equity securities, available-for-sale, at fair value
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28,510,933
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22,549,975
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Short-term investments
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13,567,648
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14,112,262
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Other investments
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6,763,100
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3,631,714
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Total investments
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130,778,659
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125,701,316
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Cash and cash equivalents
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20,810,018
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18,042,258
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Premiums and fees receivable, net
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11,037,714
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6,810,000
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Accrued interest and dividends
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1,037,447
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1,108,156
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Prepaid expenses and other assets
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4,651,115
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2,743,517
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Property, net
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3,603,323
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3,553,216
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Total Assets
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$
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171,918,276
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$
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157,958,463
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Liabilities and Stockholders' Equity
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Liabilities:
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Reserves for claims
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$
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39,078,000
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$
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37,996,000
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Accounts payable and accrued liabilities
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15,477,545
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12,330,383
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Current income taxes payable
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1,336,824
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640,533
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Deferred income taxes, net
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893,156
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479,363
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Total liabilities
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56,785,525
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51,446,279
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Redeemable Noncontrolling Interest
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493,861
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-
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Stockholders' Equity:
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Common stock - no par value (shares authorized 10,000,000;
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2,043,359 and 2,107,681 shares issued and outstanding as of December
31, 2012 and
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December 31, 2011, respectively, excluding 291,676 shares for 2012
and 2011
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of common stock held by the Company's subsidiary)
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1
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1
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Retained earnings
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105,820,459
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99,003,018
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Accumulated other comprehensive income
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8,818,430
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7,509,165
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Total stockholders' equity
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114,638,890
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106,512,184
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Total Liabilities and Stockholders' Equity
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$
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171,918,276
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$
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157,958,463
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Investors Title Company and Subsidiaries
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Net Premiums Written By Branch and Agency
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For the Three and Twelve Months Ended December 31, 2012 and
2011
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(Unaudited)
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Three Months Ended
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Twelve Months Ended
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December 31
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December 31
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2012
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%
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2011
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%
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2012
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%
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2011
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%
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Branch
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$
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6,216,397
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20.4
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$
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4,424,488
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24.3
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$
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23,762,885
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23.2
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$
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16,485,973
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20.2
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Agency
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24,187,592
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79.6
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13,801,643
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75.7
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78,568,217
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76.8
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65,043,360
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79.8
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Total
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$
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30,403,989
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100.0
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$
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18,226,131
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100.0
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$
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102,331,102
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100.0
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$
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81,529,333
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100.0
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