ITIC Investors Title Company

J. Allen Fine, Chairman of Investors Title Company (NASDAQ:ITIC), announced that for the quarter ended March 31, 2006, the Company reported net income of $2,874,941, an increase of 82% compared with $1,580,494 for the prior year period. Net income per diluted share equaled $1.11, an increase of 85% compared with $.60 per diluted share in the same period last year. Net premiums written decreased 3% to $16,631,626 and revenues increased 4% to $20,178,848 compared with the prior year period. Revenue slightly exceeded the prior year period primarily due to a gain on the sale of investment securities, an increase in fee income generated by our Trust division and an increase in investment income. Income in the exchange segment also increased principally due to higher levels of interest earned on exchange funds. Offsetting these increases was a decline in our net premiums written resulting predominantly from lower levels of real estate activity in our operating territories. Profit margin improved as operating expenses decreased 4%. An increase in the percentage of premiums written directly through branches offices resulted in a decrease in commission to agents. A decline in compensation expense also contributed to the improvement in our operating margins. Chairman Fine added, "Overall we are pleased with our results for the quarter which is typically a seasonally slow period of the year. Much attention has been focused recently on the prospects for the housing market. Although signs point to an overall slow down, home sales have held up remarkably well. We remain focused on identifying opportunities to extend our distribution base, operate more efficiently and expand our related business lines." Investors Title Company is engaged through its subsidiaries in the business of issuing and underwriting title insurance policies. The Company also provides services in connection with tax-deferred exchanges of like-kind property as well as investment management services to individuals, trusts, foundations and businesses. 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. For more details on risk, uncertainties and other factors that could affect expectations, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2005, as filed with the Securities and Exchange Commission. -0- *T Investors Title Company and Subsidiaries Consolidated Statements of Income March 31, 2006 and 2005 (Unaudited) For The Three Months Ended March 31 ----------------------- 2006 2005 ----------- ----------- Revenues: Underwriting income: Premiums Written $16,746,269 $17,246,037 Less-premiums for reinsurance ceded 114,643 139,079 ----------- ----------- Net premiums written 16,631,626 17,106,958 Investment income-interest and dividends 994,054 752,765 Net realized gain (loss) on sales of investments 561,647 (10,894) Exchange services revenue 1,027,732 809,639 Other 963,789 671,111 ----------- ----------- Total 20,178,848 19,329,579 ----------- ----------- Operating Expenses: Commissions to agents 6,283,396 6,991,749 Provision for claims 1,855,279 1,899,005 Salaries, employee benefits and payroll taxes 5,005,847 5,367,312 Office occupancy and operations 1,465,313 1,349,206 Business development 505,658 427,473 Taxes, other than payroll and income 150,885 110,754 Premium and retaliatory taxes 342,068 399,545 Professional fees 587,622 437,930 Other 218,839 45,111 ----------- ----------- Total 16,414,907 17,028,085 ----------- ----------- Income Before Income Taxes 3,763,941 2,301,494 ----------- ----------- Provision For Income Taxes 889,000 721,000 ----------- ----------- Net Income $ 2,874,941 $ 1,580,494 =========== =========== Basic Earnings Per Common Share $ 1.13 $ 0.62 =========== =========== Weighted Average Shares Outstanding - Basic 2,549,070 2,564,490 =========== =========== Diluted Earnings Per Common Share $ 1.11 $ 0.60 =========== =========== Weighted Average Shares Outstanding - Diluted 2,586,465 2,625,447 =========== =========== Investors Title Company and Subsidiaries Consolidated Balance Sheets As of March 31, 2006 and December 31, 2005 (Unaudited) March 31, December 31, 2006 2005 ------------ ------------ Assets Cash and cash equivalents $ 6,050,394 $ 14,608,481 Investments in securities: Fixed maturities: Held-to-maturity, at amortized cost 1,548,505 1,648,708 Available-for-sale, at fair value 89,637,349 75,472,342 Equity securities, available-for-sale at fair value 12,016,054 9,437,678 Short-term investments 1,541,527 7,257,734 Other investments 1,322,866 1,336,111 ------------ ------------ Total investments 106,066,301 95,152,573 Premiums receivable, net 6,822,344 7,818,558 Accrued interest and dividends 1,029,136 1,010,198 Prepaid expenses and other assets 1,503,128 1,592,326 Property acquired in settlement of claims 413,480 359,980 Property, net 5,384,086 5,466,765 Deferred income taxes, net 2,731,959 2,462,647 ------------ ------------ Total Assets $130,000,828 $128,471,528 ============ ============ Liabilities and Stockholders' Equity Liabilities: Reserves for claims $ 35,551,000 $ 34,857,000 Accounts payable and accrued liabilities 6,688,423 7,928,384 Commissions and reinsurance payables 307,623 442,098 Current income taxes payable 979,123 946,790 ------------ ------------ Total liabilities 43,526,169 44,174,272 ------------ ------------ Stockholders' Equity: Common stock - no par value (shares authorized 10,000,000; 2,548,115 and 2,549,434 shares issued and outstanding 2006 and 2005, respectively, excluding 295,361 and 297,783 shares 2006 and 2005, respectively, of common stock held by the Company's subsidiary) 1 1 Retained earnings 84,118,443 81,477,022 Accumulated other comprehensive income (net unrealized gain on investments) 2,356,215 2,820,233 ------------ ------------ Total stockholders' equity 86,474,659 84,297,256 ------------ ------------ Total Liabilities and Stockholders' Equity $130,000,828 $128,471,528 ============ ============ Investors Title Company and Subsidiaries Net Premiums Written By State For the Three Months Ended March 31, 2006 and 2005 (Unaudited) 2006 2005 --------------------------------------------------------------------- Alabama $ 243,636 $ 350,730 Florida 278,335 309,609 Illinois 247,895 212,780 Kentucky 573,498 438,967 Maryland 373,769 372,646 Michigan 877,309 1,111,407 Minnesota 337,169 268,800 Mississippi 134,452 263,351 Nebraska 134,310 205,318 New York 503,596 586,005 North Carolina 8,441,482 7,758,779 Pennsylvania 315,912 378,825 South Carolina 1,402,073 2,047,893 Tennessee 666,323 567,848 Virginia 1,674,103 1,742,852 West Virginia 455,418 429,554 Other States 80,563 186,627 ------------- ----------------- Direct Premiums 16,739,843 17,231,991 Reinsurance Assumed 6,426 14,046 Reinsurance Ceded (114,643) (139,079) ------------- ----------------- Net Premiums Written $ 16,631,626 $ 17,106,958 ============= ================= Investors Title Company and Subsidiaries Net Premiums Written By Branch and Agency March 31, 2006 and 2005 (Unaudited) For The Three Months Ended March 31 ------------------------------------------------------------- 2006 % 2005 % ------------------------------------------------------------- Branch $7,727,025 46 $7,249,829 42 Agency 8,904,601 54 9,857,129 58 ------------------------------------------------------------- Total $16,631,626 100 $17,106,958 100 ============================================================= *T