What changed in this filing

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Item 1. Business

2021-03-15 compared with 2020-03-11 · 29 added, 16 removed, 174 unchanged (21% of the section changed)

Investors Title Company (the “Company”) is a holding company that operates through its subsidiaries and was incorporated in the state of North Carolina in 1973.

Investors Title Company (the “Company”) is a holding company that operates through its subsidiaries and was incorporated as a corporation under the laws of the state of North Carolina in 1973.

The Company became operational in 1976, when it acquired Investors Title Insurance Company (“ITIC”), which had itself been operating since 1972, as a wholly owned subsidiary under a plan of exchange of shares of common stock.

2 unchanged sentences

The Company maintains a website at www.invtitle.com .

The contents of the Company’s website are not and shall not be a part of this Annual Report on Form 10-K or any other SEC filing.

OVERVIEW OF THE BUSINESS

The Company’s primary business activity, and its only reportable operating segment, is the issuance of residential and commercial title insurance through ITIC and NITIC.

Additionally, the Company provides tax-deferred real property exchange services through its subsidiaries, Investors Title Exchange Corporation (“ITEC”) and Investors Title Accommodation Corporation (“ITAC”);

investment management and trust services to individuals, trusts and other entities through its subsidiary Investors Trust Company (“Investors Trust”);

and management services to title insurance agencies through its subsidiary, Investors Title Management Services (“ITMS”).

Additionally, the Company provides (i) tax-deferred real property exchange services through its subsidiaries, Investors Title Exchange Corporation (“ITEC”) and Investors Title Accommodation Corporation (“ITAC”);

(ii) investment management and trust services to individuals, trusts and other entities through its subsidiary Investors Trust Company (“Investors Trust”);

and (iii) management services to title insurance agencies through its subsidiary, Investors Title Management Services (“ITMS”).

Refer to “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 12 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information related to the revenues, income and assets attributable to the Company’s primary operating segment.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 12 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K (the “Consolidated Financial Statements”) for additional information related to the revenues, income and assets attributable to the Company’s primary operating segment.

Title Insurance

67 unchanged sentences

They also assume reinsurance for certain risks of other title insurers for which they receive additional income in the form of reinsurance premiums.

For each of the last three years, revenues from reinsurance activities accounted for less than 1% of total premium volume.

For each of the last two years, revenues from reinsurance activities accounted for less than 1% of total premium volume.

Exchange Services, Investment Management and Trust Services, and Management Services

1 unchanged sentence

In 1988, the Company established ITEC to provide services in connection with tax-deferred exchanges of like-kind property pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended.

ITEC acts as a qualified intermediary in tax-deferred exchanges of property held for productive use in a trade or business or for investment, and its income is derived from fees for handling exchange transactions and interest earned on client deposits held by the Company.

ITEC acts as a qualified intermediary in tax-deferred exchanges of real property held for productive use in a trade or business or for investment, and its income is derived from fees for handling exchange transactions and interest earned on client deposits held by the Company.

In its role as qualified intermediary, ITEC coordinates the exchange aspects of the real estate transaction, and its duties include drafting standard exchange documents, holding the exchange funds between the time the old property is sold and the new property is purchased, and accepting the formal identification of the replacement property within the required identification period.

6 unchanged sentences

None of these other lines of business is currently a reportable segment for which separate financial information is presented;

instead, they are collectively included and reported in the category “All Other” in the segment information in Note 12 of the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K.

instead, they are collectively included and reported in the category “All Other” in the segment information in Note 12 of the Notes to the Consolidated Financial Statements.

CYCLICALITY AND SEASONALITY

53 unchanged sentences

The Company’s investment portfolio did not include any significant investments in banks, trust or insurance companies at December 31, 2020 or 2019.

Short-term investments, which consist primarily of commercial paper, money market instruments and certificates of deposit which have an original maturity of one year or less, are carried at cost, which approximates fair value due to the short duration to maturity.

In addition, at December 31, 2019 and 2018 , the Company held investments that are accounted for using the equity method and measurement alternative method (refer to Note 1 of the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K).

Refer to Note 3 of the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K for the major categories of investments, scheduled maturities, fair values of investment securities and earnings by category.

Short-term investments, which consist primarily of U.S.

Treasury securities, commercial paper, money market instruments and certificates of deposit which have an original maturity of one year or less, are carried at cost, which approximates fair value due to the short duration to maturity.

In addition, at December 31, 2020 and 2019, the Company held investments that are accounted for using the equity method and measurement alternative method (refer to Note 1 of the Notes to the Consolidated Financial Statements).

Refer to Note 3 of the Notes to the Consolidated Financial Statements for the major categories of investments, scheduled maturities, fair values of investment securities and earnings by category.

ENVIRONMENTAL MATTERS

3 unchanged sentences

In order for ITAC to enter into such arrangements, each person or entity for which title is being held must (a) execute an indemnification agreement under which it agrees to indemnify ITAC for any environmental or other claims which may arise as a result of the arrangement, and (b) provide due diligence materials regarding any known environmental issues, in the form of an environmental questionnaire and/or applicable environmental engineering studies, if indicated for review by ITAC, as applicable.

EMPLOYEES AND HUMAN CAPITAL

The Company and its subsidiaries had 396 full-time employees and 60 part-time employees as of December 31, 2020.

1 unchanged sentence

Management considers its relationship with its employees to be favorable.

Recruiting and retaining qualified personnel and key talent is important to the Company’s success.

The Company’s business results depend in part on its ability to successfully manage its human capital resources.

Factors that may affect the Company’s ability to attract and retain qualified employees include employee morale, competition from other employers and availability of qualified individuals.

Compensation and Benefits

The Company strives to provide robust compensation and benefits to its employees.

In addition to competitive salaries, compensation and benefit programs include annual bonuses, a generous 401(k) plan, employer paid healthcare, life insurance, long and short term disability benefits, flexible spending accounts, an employee assistance program, and paid time off.

The Company’s ability to attract and retain key personnel who are necessary to the operation of the business is critical to its success.

COVID-19 Pandemic

The health and wellness of the Company’s employees is also critical to its success.

In an effort to keep the Company’s employees safe during the COVID-19 pandemic, the Company has implemented a number of new health-related measures, including protocols governing social distancing and the use of face masks while on company property, a flexible policy for working from home, cleaning procedures at the Company’s corporate headquarters, and limitations on in-person meeting and other gatherings.

ADDITIONAL INFORMATION

2 unchanged sentences

The Company’s internet address is www.invtitle.com .

The contents of the Company’s website are not and shall not be deemed to be a part of this document or any other SEC filing.

The contents of the Company’s website, including the “Investor Relations” section, are not and shall not be deemed to be a part of this Annual Report on Form 10-K or any other SEC filing.

The Company makes available free of charge through its internet website its annual reports on Form 10-K, its quarterly reports on Form 10-Q, its current reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC, and also makes available the Section 16 reports on Forms 3, 4 and 5 of its insiders no later than the end of the business day following such filings.

1 unchanged sentence

The “Investor Relations” section of the Company’s website also includes its Code of Business Conduct and Ethics and the charters of the Audit, Compensation and Nominating Committees of its Board of Directors.

Information About Our Executive Officers

Executive Officers of the Company

Following is information regarding the executive officers of the Company as of February 21, 2021.

Each officer is appointed at the annual meeting of the Board of Directors to serve until the next annual meeting of the Board or until his or her respective successor has been elected and qualified.

Position with Registrant

Chief Executive Officer and Chairman of the Board

Name Age Position with Registrant

Allen Fine 86 Chief Executive Officer and Chairman of the Board

58 President, Treasurer, Chief Financial Officer, Chief Accounting Officer and Director

Executive Vice President, Secretary and Director

Morris Fine 54 Executive Vice President, Secretary and Director

Allen Fine has been Chief Executive Officer and Chairman of the Board of the Company since its incorporation in 1973.

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business