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| 8-K - INVESTORS TITLE COMPANY 8-K - INVESTORS TITLE CO | a6700014.htm |
Exhibit 99.1
Investors Title Company Announces First Quarter 2011 Financial Results
CHAPEL HILL, N.C.--(BUSINESS WIRE)--April 29, 2011--Investors Title Company today announced its results for the quarter ended March 31, 2011. The Company reported net income of $1,019,207, or $0.46 per diluted share, compared with $17,415, or $0.01 per diluted share, for the prior year period.
Total revenues increased 46.2% versus the prior year period to $20,022,020, primarily due to a 51.6% increase in net premiums written. The premium growth is mainly attributable to the Company’s recent expansion into Texas, as well as to an overall increase in purchase transactions insured.
Agent commissions increased 94.3% over the prior year as a result of growth in agency premiums and an increase in agent business from markets with higher premium rates, primarily Texas. Excluding commissions and premium taxes, which fluctuate with the amount of premiums written, operating expenses decreased 5.1% versus the prior year period, mostly due to the reduction in claims expense. Claims expense benefitted from favorable loss development in recent policy years, as well as from a decline in the relative share of North Carolina business as a percentage of the total. Since North Carolina’s premium rates are less than half the national average, the resulting loss ratio for North Carolina business is higher than for our other markets. In addition, the Company continues to benefit from lower occupancy and operating costs in its branch offices.
Chairman J. Allen Fine added, “We are pleased to report an increase in revenues driven by continued expansion of our agent base, as well as a favorable mix of business. Operating expense comparisons remain favorable, driven by positive developments in claims loss rates and the continued impact of cost reduction initiatives from the past several years. Our balance sheet remains very strong, and we continue to focus on enhancing our competitive strengths and market presence.”
Investors Title Company is engaged through its subsidiaries in issuing and underwriting title insurance policies. The Company also provides investment management services to individuals, companies, and 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 activity in the U.S. real estate market, future enhancement of our operational efficiency or agency-based expansion. 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, 2010, as filed with the Securities and Exchange Commission, and in subsequent filings.
| Investors Title Company and Subsidiaries | |||||||||
| Consolidated Statements of Income | |||||||||
| For the Three Months Ended March 31, 2011 and 2010 | |||||||||
| (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| March 31 | |||||||||
|
2011 |
2010 |
||||||||
| Revenues: | |||||||||
| Underwriting income: | |||||||||
| Premiums Written | $ | 17,912,286 | $ | 11,829,821 | |||||
| Less-premiums for reinsurance ceded | 46,698 | 43,519 | |||||||
| Net premiums written | 17,865,588 | 11,786,302 | |||||||
| Investment income-interest and dividends | 899,372 | 906,622 | |||||||
| Net realized (loss) gain on investments | (26,160 | ) | 25,150 | ||||||
| Other | 1,283,220 | 979,337 | |||||||
| Total Revenues | 20,022,020 | 13,697,411 | |||||||
| Operating Expenses: | |||||||||
| Commissions to agents | 10,879,586 | 5,599,451 | |||||||
| Provision for claims | 721,626 | 1,312,404 | |||||||
| Salaries, employee benefits and payroll taxes | 4,691,996 | 4,484,312 | |||||||
| Office occupancy and operations | 963,927 | 1,088,405 | |||||||
| Business development | 387,547 | 274,296 | |||||||
| Filing fees, franchise and local taxes | 214,113 | 145,422 | |||||||
| Premium and retaliatory taxes | 405,473 | 300,946 | |||||||
| Professional and contract labor fees | 308,524 | 365,078 | |||||||
| Other | 103,021 | 111,682 | |||||||
| Total Operating Expenses | 18,675,813 | 13,681,996 | |||||||
| Income Before Income Taxes | 1,346,207 | 15,415 | |||||||
| Provision (Benefit) For Income Taxes | 327,000 | (2,000 | ) | ||||||
| Net Income | $ | 1,019,207 | $ | 17,415 | |||||
| Basic Earnings Per Common Share | $ | 0.46 | $ | 0.01 | |||||
| Weighted Average Shares Outstanding - Basic | 2,234,480 | 2,285,134 | |||||||
| Diluted Earnings Per Common Share | $ | 0.46 | $ | 0.01 | |||||
| Weighted Average Shares Outstanding - Diluted | 2,239,500 | 2,295,164 | |||||||
| Investors Title Company and Subsidiaries | ||||||
| Consolidated Balance Sheets | ||||||
| As of March 31, 2011 and December 31, 2010 | ||||||
| (Unaudited) | ||||||
| March 31, 2011 | December 31, 2010 | |||||
| Assets | ||||||
| Investments in securities: | ||||||
| Fixed maturities: | ||||||
| Available-for-sale, at fair value | $ | 85,418,326 | $ | 86,033,557 | ||
| Equity securities, available-for-sale, at fair value | 15,595,241 | 13,872,370 | ||||
| Short-term investments | 20,895,922 | 27,203,550 | ||||
| Other investments | 2,746,936 | 2,888,958 | ||||
| Total investments | 124,656,425 | 129,998,435 | ||||
| Cash and cash equivalents | 11,599,535 | 8,117,031 | ||||
| Premiums and fees receivable, net | 5,316,144 | 7,253,786 | ||||
| Accrued interest and dividends | 946,078 | 1,150,602 | ||||
| Prepaid expenses and other assets | 2,509,104 | 2,688,723 | ||||
| Property acquired in settlement of claims | 119,938 | 127,938 | ||||
| Property, net | 3,605,828 | 3,672,317 | ||||
| Current income taxes receivable | 378,256 | - | ||||
| Deferred income taxes, net | - | 476,534 | ||||
| Total Assets | $ | 149,131,308 | $ | 153,485,366 | ||
| Liabilities and Stockholders' Equity | ||||||
| Liabilities: | ||||||
| Reserves for claims | $ | 37,722,000 | $ | 38,198,700 | ||
| Accounts payable and accrued liabilities | 9,659,492 | 10,301,495 | ||||
| Current income taxes payable | - | 1,056,356 | ||||
| Deferred income taxes, net | 357,932 | - | ||||
| Total liabilities | 47,739,424 | 49,556,551 | ||||
| Stockholders' Equity: | ||||||
|
Common stock - no par value (shares authorized 10,000,000; 2,156,078 and 2,282,596 shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively, excluding 291,676 shares for 2011 and 2010 of common stock held by the Company's subsidiary) |
1 | 1 | ||||
| Retained earnings | 95,233,547 | 98,240,109 | ||||
| Accumulated other comprehensive income | 6,158,336 | 5,688,705 | ||||
| Total stockholders' equity | 101,391,884 | 103,928,815 | ||||
| Total Liabilities and Stockholders' Equity | $ | 149,131,308 | $ | 153,485,366 | ||
| Investors Title Company and Subsidiaries | |||||||||||
| Net Premiums Written By Branch and Agency | |||||||||||
| For the Three Months Ended March 31, 2011 and 2010 | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| March 31 | |||||||||||
| 2011 | % | 2010 | % | ||||||||
| Branch | $ | 3,696,280 | 20.7 | $ | 3,749,800 | 31.8 | |||||
| Agency | 14,169,308 | 79.3 | 8,036,502 | 68.2 | |||||||
| Total | $ | 17,865,588 | 100.0 | $ | 11,786,302 | 100.0 | |||||
CONTACT:
For Investors Title Company
Elizabeth B. Lewter,
919-968-2200