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| 8-K - INVESTORS TITLE COMPANY 8-K - INVESTORS TITLE CO | a6488247.htm |
Exhibit 99.1
Investors Title Company Announces Third Quarter 2010 Results
CHAPEL HILL, N.C.--(BUSINESS WIRE)--October 29, 2010--Investors Title Company today announced its results for the third quarter ended September 30, 2010. Net income increased 49.5% to $1,449,101, or $0.63 per diluted share, compared with $969,043, or $0.42 per diluted share, for the prior year period. The increase in net income was driven primarily by revenue growth versus the prior year period. Net premiums written increased 17.3% to $16,749,395 due to an increase in refinance activity.
Operating expenses increased 12.3% to $17,153,583 versus the prior year period, primarily due to increases in variable expenses tied to premium volumes. Commissions to agents increased 26.2% commensurate with an increase in agency premium volume. The provision for claims decreased 5.9% versus the prior year period due to unfavorable claims experience for the prior year quarter, partially offset by increases in the current provision resulting from higher premium volume.
For the nine-month period ended September 30, 2010, net income decreased 11.4% to $4,004,076, or $1.75 per diluted share, compared with $4,519,479, or $1.96 per diluted share, for the prior year period. The decline in net income for the period was driven primarily by a 15.0% decrease in net premiums written, partially offset by a 13.5% decrease in operating expenses.
Chairman J. Allen Fine added, “We are pleased to report an improvement in operating results during the quarter, driven by an increase in the volume of refinancing activity due to historically low interest rates during the quarter. We were also pleased to see a continuation of the improvement in our claims loss rate, which contributed to a favorable comparison in the provision for claims. Our balance sheet and financial condition remain strong, and operationally we continue to emphasize efficiency improvements and the expansion of our agency base.”
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 any predictions regarding activity in the U.S. real estate market. 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: 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, 2009, as filed with the Securities and Exchange Commission, and in subsequent filings.
| Investors Title Company and Subsidiaries | |||||||||||||||||||
| Consolidated Statements of Income | |||||||||||||||||||
| For the Three and Nine Months Ended September 30, 2010 and 2009 | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||
|
2010 |
2009 |
2010 |
2009 |
||||||||||||||||
| Revenues: | |||||||||||||||||||
| Underwriting income: | |||||||||||||||||||
| Premiums Written | $ | 16,802,054 | $ | 14,306,677 | $ | 42,297,223 | $ | 49,662,835 | |||||||||||
| Less-premiums for reinsurance ceded | 52,659 | 24,062 | 122,576 | 58,012 | |||||||||||||||
| Net premiums written | 16,749,395 | 14,282,615 | 42,174,647 | 49,604,823 | |||||||||||||||
| Investment income-interest and dividends | 934,754 | 911,982 | 2,757,228 | 2,862,071 | |||||||||||||||
| Net realized gain (loss) on investments | (44,864 | ) | (110,818 | ) | 306,066 | (400,760 | ) | ||||||||||||
| Other | 1,522,399 | 1,278,838 | 3,839,920 | 4,599,451 | |||||||||||||||
| Total Revenues | 19,161,684 | 16,362,617 | 49,077,861 | 56,665,585 | |||||||||||||||
| Operating Expenses: | |||||||||||||||||||
| Commissions to agents | 8,632,083 | 6,838,090 | 20,707,910 | 23,202,041 | |||||||||||||||
| Provision for claims | 1,819,522 | 1,934,459 | 3,244,341 | 6,733,399 | |||||||||||||||
| Salaries, employee benefits and payroll taxes | 4,354,854 | 4,195,751 | 13,185,127 | 13,862,993 | |||||||||||||||
| Office occupancy and operations | 971,264 | 985,769 | 3,038,491 | 3,292,491 | |||||||||||||||
| Business development | 335,454 | 336,481 | 962,115 | 928,309 | |||||||||||||||
| Filing fees, franchise and local taxes | 241,774 | 204,819 | 534,473 | 547,074 | |||||||||||||||
| Premium and retaliatory taxes | 336,925 | 270,352 | 919,655 | 1,013,124 | |||||||||||||||
| Professional and contract labor fees | 334,973 | 330,959 | 1,038,845 | 982,948 | |||||||||||||||
| Other | 126,734 | 173,894 | 420,828 | 363,727 | |||||||||||||||
| Total Operating Expenses | 17,153,583 | 15,270,574 | 44,051,785 | 50,926,106 | |||||||||||||||
| Income Before Income Taxes | 2,008,101 | 1,092,043 | 5,026,076 | 5,739,479 | |||||||||||||||
| Provision For Income Taxes | 559,000 | 123,000 | 1,022,000 | 1,220,000 | |||||||||||||||
| Net Income | $ | 1,449,101 | $ | 969,043 | $ | 4,004,076 | $ | 4,519,479 | |||||||||||
| Basic Earnings Per Common Share | $ | 0.63 | $ | 0.42 | $ | 1.75 | $ | 1.97 | |||||||||||
| Weighted Average Shares Outstanding - Basic | 2,284,331 | 2,290,666 | 2,285,039 | 2,293,754 | |||||||||||||||
| Diluted Earnings Per Common Share | $ | 0.63 | $ | 0.42 | $ | 1.75 | $ | 1.96 | |||||||||||
| Weighted Average Shares Outstanding - Diluted | 2,285,785 | 2,295,757 | 2,291,060 | 2,300,686 | |||||||||||||||
| Investors Title Company and Subsidiaries | ||||||||
| Consolidated Balance Sheets | ||||||||
| As of September 30, 2010 and December 31, 2009 | ||||||||
| (Unaudited) | ||||||||
| September 30, 2010 | December 31, 2009 | |||||||
| Assets | ||||||||
| Investments in securities: | ||||||||
| Fixed maturities: | ||||||||
| Held-to-maturity, at amortized cost | $ | - | $ | 2,000 | ||||
| Available-for-sale, at fair value | 90,837,152 | 88,801,186 | ||||||
| Equity securities, available-for-sale, at fair value | 12,886,706 | 11,854,301 | ||||||
| Short-term investments | 24,772,235 | 20,717,434 | ||||||
| Other investments | 2,683,177 | 2,307,220 | ||||||
| Total investments | 131,179,270 | 123,682,141 | ||||||
| Cash and cash equivalents | 5,467,341 | 8,733,221 | ||||||
| Premiums and fees receivable, net | 6,643,333 | 5,170,476 | ||||||
| Accrued interest and dividends | 981,144 | 1,122,806 | ||||||
| Prepaid expenses and other assets | 1,613,459 | 1,815,653 | ||||||
| Property acquired in settlement of claims | 166,629 | 175,476 | ||||||
| Property, net | 3,659,136 | 3,894,724 | ||||||
| Current income taxes receivable | 1,047,057 | - | ||||||
| Deferred income taxes, net | - | 1,833,207 | ||||||
| Total Assets | $ | 150,757,369 | $ | 146,427,704 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Liabilities: | ||||||||
| Reserves for claims | $ | 38,065,000 | $ | 39,490,000 | ||||
| Accounts payable and accrued liabilities | 9,442,504 | 9,008,337 | ||||||
| Current income taxes payable | - | 670,290 | ||||||
| Deferred income taxes, net | 786,863 | - | ||||||
| Total liabilities | 48,294,367 | 49,168,627 | ||||||
| Stockholders' Equity: | ||||||||
|
Common stock - no par value (shares authorized 10,000,000; 2,284,042 and 2,285,289 shares issued and outstanding as of September 30, 2010 and December 31, 2009, respectively, excluding 291,676 shares for 2010 and 2009 of common stock held by the Company's subsidiary) |
1 | 1 | ||||||
| Retained earnings | 96,025,089 | 92,528,818 | ||||||
| Accumulated other comprehensive income | 6,437,912 | 4,730,258 | ||||||
| Total stockholders' equity | 102,463,002 | 97,259,077 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 150,757,369 | $ | 146,427,704 | ||||
| Investors Title Company and Subsidiaries | ||||||||||||||||
| Net Premiums Written By State | ||||||||||||||||
| For the Three and Nine Months Ended September 30, 2010 and 2009 | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| State | 2010 | 2009 | 2010 | 2009 | ||||||||||||
| Illinois | $ | 1,053,060 | $ | 478,044 | $ | 2,056,594 | $ | 2,335,265 | ||||||||
| Kentucky | 867,814 | 713,474 | 2,367,861 | 2,533,651 | ||||||||||||
| Michigan | 837,384 | 1,123,194 | 2,820,240 | 3,753,889 | ||||||||||||
| New York | 794,799 | 523,629 | 1,669,098 | 2,359,472 | ||||||||||||
| North Carolina | 6,370,911 | 6,000,363 | 17,055,366 | 21,857,728 | ||||||||||||
| Pennsylvania | 882,142 | 588,988 | 2,001,675 | 2,074,806 | ||||||||||||
| South Carolina | 1,727,802 | 1,690,176 | 4,474,207 | 4,222,027 | ||||||||||||
| Tennessee | 685,370 | 610,055 | 1,713,880 | 1,928,614 | ||||||||||||
| Virginia | 1,157,659 | 1,226,751 | 3,214,050 | 3,927,202 | ||||||||||||
| West Virginia | 700,623 | 572,892 | 1,666,314 | 1,730,612 | ||||||||||||
| Other | 1,714,590 | 771,761 | 3,238,104 | 2,931,419 | ||||||||||||
| Direct Premiums | $ | 16,792,154 | $ | 14,299,327 | $ | 42,277,389 | $ | 49,654,685 | ||||||||
| Reinsurance Assumed | 9,900 | 7,350 | 19,834 | 8,150 | ||||||||||||
| Reinsurance Ceded | (52,659 | ) | (24,062 | ) | (122,576 | ) | (58,012 | ) | ||||||||
| Net Premiums Written | $ | 16,749,395 | $ | 14,282,615 | $ | 42,174,647 | $ | 49,604,823 | ||||||||
| Investors Title Company and Subsidiaries | ||||||||||||||||||||||||
| Net Premiums Written By Branch and Agency | ||||||||||||||||||||||||
| For the Three and Nine Months Ended September 30, 2010 and 2009 | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||||
| 2010 | % | 2009 | % | 2010 | % | 2009 | % | |||||||||||||||||
| Branch | $ | 4,870,568 | 29.1 | $ | 4,680,845 | 32.8 | $ | 13,040,632 | 30.9 | $ | 17,380,223 | 35.0 | ||||||||||||
| Agency | 11,878,827 | 70.9 | 9,601,770 | 67.2 | 29,134,015 | 69.1 | 32,224,600 | 65.0 | ||||||||||||||||
| Total | $ | 16,749,395 | 100.0 | $ | 14,282,615 | 100.0 | $ | 42,174,647 | 100.0 | $ | 49,604,823 | 100.0 | ||||||||||||
CONTACT:
For Investors Title Company
Elizabeth B. Lewter,
919-968-2200