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| 8-K - INVESTORS TITLE COMPANY 8-K - INVESTORS TITLE CO | a50263474.htm |
Exhibit 99.1
Investors Title Company Announces First Quarter 2012 Financial Results
CHAPEL HILL, N.C.--(BUSINESS WIRE)--May 4, 2012--Investors Title Company (NASDAQ: ITIC) today announced its results for the quarter ended March 31, 2012. The Company reported net income of $1,432,139, or $0.67 per diluted share, compared with $1,019,207, or $0.46 per diluted share, for the prior year period.
Total revenues increased 11.9% versus the prior year period to $22,414,274, primarily due to a 10.1% increase in net premiums written. Historically low interest rates drove a substantial increase in refinance activity versus the prior year period. Purchase activity was up as well, although to a lesser extent. New industry-wide premium charges for North Carolina that went into effect during the quarter also contributed to growth in premium revenue.
Total expenses increased 9.6% versus the prior year period, primarily due to increases in variable expenses such as commissions and the provision for claims, which fluctuate with premium volumes. The provision for claims as a percentage of net premiums written was 8.3% versus 4.0% in the prior year period due to an increase in volume in states with a higher average loss ratio, and an abnormally low claims expense in the prior year period. In addition, the Company continues to benefit from long-term reductions in operating expenses such as occupancy and operating costs in its branches due to an emphasis on expense control over the past few years.
Chairman J. Allen Fine added, “We are pleased with the uptick in mortgage lending activity and our first quarter results. Operating expenses were largely in line with recent quarterly trends adjusting for the improvement in activity levels, although we expect them to trend higher as we increase our investment in a number of software development initiatives. Our balance sheet remains very strong, and we continue to focus on long-term opportunities to enhance our competitive strengths and market presence.”
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 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 | |||||||||
| Consolidated Statements of Income | |||||||||
| For the Three Months Ended March 31, 2012 and 2011 | |||||||||
| (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| March 31 | |||||||||
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2012 |
2011 |
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| Revenues: | |||||||||
| Net premiums written | $ | 19,667,420 | $ | 17,865,588 | |||||
| Investment income - interest and dividends | 977,261 | 899,372 | |||||||
| Net realized gain (loss) on investments | 192,881 | (26,160 | ) | ||||||
| Other | 1,576,712 | 1,283,220 | |||||||
| Total Revenues | 22,414,274 | 20,022,020 | |||||||
| Operating Expenses: | |||||||||
| Commissions to agents | 11,192,127 | 10,879,586 | |||||||
| Provision for claims | 1,631,359 | 721,626 | |||||||
| Salaries, employee benefits and payroll taxes | 4,990,632 | 4,691,996 | |||||||
| Office occupancy and operations | 927,038 | 963,927 | |||||||
| Business development | 393,447 | 387,547 | |||||||
| Filing fees, franchise and local taxes | 351,922 | 214,113 | |||||||
| Premium and retaliatory taxes | 414,794 | 405,473 | |||||||
| Professional and contract labor fees | 400,537 | 308,524 | |||||||
| Other | 167,279 | 103,021 | |||||||
| Total Operating Expenses | 20,469,135 | 18,675,813 | |||||||
| Income Before Income Taxes | 1,945,139 | 1,346,207 | |||||||
| Provision For Income Taxes | 513,000 | 327,000 | |||||||
| Net Income | $ | 1,432,139 | $ | 1,019,207 | |||||
| Basic Earnings Per Common Share | $ | 0.68 | $ | 0.46 | |||||
| Weighted Average Shares Outstanding - Basic | 2,100,835 | 2,234,480 | |||||||
| Diluted Earnings Per Common Share | $ | 0.67 | $ | 0.46 | |||||
| Weighted Average Shares Outstanding - Diluted | 2,128,788 | 2,239,500 | |||||||
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| Investors Title Company and Subsidiaries | ||||||||
| Consolidated Balance Sheets | ||||||||
| As of March 31, 2012 and December 31, 2011 | ||||||||
| (Unaudited) | ||||||||
| March 31, 2012 | December 31, 2011 | |||||||
| Assets | ||||||||
| Investments in securities: | ||||||||
| Fixed maturities, available-for-sale, at fair value | $ | 87,142,860 | $ | 85,407,365 | ||||
| Equity securities, available-for-sale, at fair value | 26,824,431 | 22,549,975 | ||||||
| Short-term investments | 8,571,468 | 14,112,262 | ||||||
| Other investments | 5,628,864 | 3,631,714 | ||||||
| Total investments | 128,167,623 | 125,701,316 | ||||||
| Cash and cash equivalents | 16,465,383 | 18,042,258 | ||||||
| Premiums and fees receivable, net | 7,143,066 | 6,810,000 | ||||||
| Accrued interest and dividends | 962,560 | 1,108,156 | ||||||
| Prepaid expenses and other assets | 2,713,752 | 2,743,517 | ||||||
| Property, net | 3,469,310 | 3,553,216 | ||||||
| Total Assets | $ | 158,921,694 | $ | 157,958,463 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Liabilities: | ||||||||
| Reserves for claims | $ | 38,285,000 | $ | 37,996,000 | ||||
| Accounts payable and accrued liabilities | 10,513,737 | 12,330,383 | ||||||
| Current income taxes payable | 148,262 | 640,533 | ||||||
| Deferred income taxes, net | 1,445,108 | 479,363 | ||||||
| Total liabilities | 50,392,107 | 51,446,279 | ||||||
| Stockholders' Equity: | ||||||||
| Common stock - no par value (shares authorized 10,000,000; | ||||||||
| 2,097,564 and 2,107,681 shares issued and outstanding as | ||||||||
| of March 31, 2012 and December 31, 2011, respectively, | ||||||||
| excluding 291,676 shares for 2012 and 2011 of common stock | ||||||||
| held by the Company's subsidiary) | 1 | 1 | ||||||
| Retained earnings | 99,841,101 | 99,003,018 | ||||||
| Accumulated other comprehensive income | 8,688,485 | 7,509,165 | ||||||
| Total stockholders' equity | 108,529,587 | 106,512,184 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 158,921,694 | $ | 157,958,463 | ||||
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| Investors Title Company and Subsidiaries | ||||||||||
| Net Premiums Written By Branch and Agency | ||||||||||
| For the Three Months Ended March 31, 2012 and 2011 | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended | ||||||||||
| March 31 | ||||||||||
| 2012 | % | 2011 | % | |||||||
| Branch | $ | 4,822,792 | 24.5 | $ | 3,696,280 | 20.7 | ||||
| Agency | 14,844,628 | 75.5 | 14,169,308 | 79.3 | ||||||
| Total | $ | 19,667,420 | 100.0 | $ | 17,865,588 | 100.0 | ||||
CONTACT:
Investors Title Company
Elizabeth B. Lewter, 919-968-2200