Investors Title Company today announced its results for the
quarter ended March 31, 2010. The Company reported net income of
$17,415, or $0.01 per diluted share, compared with $1,434,963, or
$0.62 per diluted share, for the prior year period.
Total revenues decreased 26.7% to $13,697,411 versus the prior
year period, primarily due to a 28.2% decrease in net premiums
written. Although premiums resulting from purchase transactions
increased versus the prior year period, a sharp decline in
refinance premiums resulted in an overall unfavorable comparison.
Investment income decreased 8.4% to $906,622 due to an overall
unfavorable interest rate environment.
Operating expenses decreased 19.1% to $13,681,996 versus the
prior year period, primarily due to a 25.7% decrease in commissions
to agents commensurate with lower premium volume, and a 35.9%
decrease in provision for claims resulting from both lower premium
volumes and a slight improvement in the Company’s claims experience
loss rate. In addition, salaries and related expenses were 12.7%
lower compared with the prior year period as a result of a
continued emphasis on expense management.
Chairman J. Allen Fine added, “The declining volume of mortgage
refinancing activity was the primary influence on operating results
in the quarter. After declining in late 2008, mortgage rates have
remained in a relatively narrow range and we believe much of the
anticipated refinancing has taken place. On a positive note we were
pleased to see a modest reduction in our claims experience loss
rate which resulted primarily from a reduction in mechanic liens
from the prior year period.
The current operating environment remains challenging as overall
mortgage origination continues to decline. We continue to monitor
the market and search for opportunities to improve efficiency and
expand our 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
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 Months Ended March 31,
2010 and 2009 (Unaudited) For The Three
Months Ended March 31 2010 2009
Revenues: Underwriting income: Premiums Written $
11,829,821 $ 16,410,597 Less-premiums for reinsurance ceded
43,519 777 Net premiums written
11,786,302 16,409,820
Investment income-interest and dividends
906,622 989,635 Net
realized gain (loss) on investments
25,150 (299,937) Other
979,337 1,582,891 Total Revenues
13,697,411
18,682,409
Operating Expenses: Commissions to agents
5,599,451 7,532,209 Provision for claims
1,312,404
2,047,126 Salaries, employee benefits and payroll taxes
4,484,312 5,138,176 Office occupancy and operations
1,088,405 1,098,582 Business development
274,296
262,817 Filing fees and taxes, other than payroll and income
145,422 157,051 Premium and retaliatory taxes
300,946
367,262 Professional and contract labor fees
365,078 314,699
Other
111,682 (14,476) Total Operating Expenses
13,681,996 16,903,446
Income Before Income
Taxes 15,415 1,778,963
(Benefit) Provision For
Income Taxes (2,000) 344,000
Net Income $
17,415 $ 1,434,963
Basic Earnings Per Common
Share $
0.01 $ 0.63
Weighted Average Shares
Outstanding - Basic 2,285,134 2,293,951
Diluted Earnings Per Common Share $
0.01 $ 0.62
Weighted Average Shares Outstanding - Diluted
2,295,164 2,296,041
Investors Title Company and
Subsidiaries Consolidated Balance Sheets As of March
31, 2010 and December 31, 2009 (Unaudited)
March 31, 2010 December 31, 2009
Assets Investments
in securities: Fixed maturities: Held-to-maturity, at amortized
cost $
- $ 2,000 Available-for-sale, at fair value
91,357,127 88,801,186 Equity securities, available-for-sale,
at fair value
13,287,540 11,854,301 Short-term investments
20,095,531 20,717,434 Other investments
2,196,660
2,307,220 Total investments
126,936,858 123,682,141
Cash and cash equivalents
4,521,474 8,733,221 Premiums and
fees receivable, net
4,448,951 5,170,476 Accrued interest
and dividends
956,860 1,122,806 Prepaid expenses and other
assets
1,747,437 1,815,653 Property acquired in settlement
of claims
158,129 175,476 Property, net
3,824,017
3,894,724 Current income taxes receivable
706,026 -
Deferred income taxes, net
1,085,707 1,833,207
Total Assets $
144,385,459 $ 146,427,704
Liabilities and Stockholders' Equity Liabilities:
Reserves for claims $
38,830,000 $ 39,490,000 Accounts
payable and accrued liabilities
8,188,773 9,008,337 Current
income taxes payable
- 670,290 Total liabilities
47,018,773 49,168,627
Stockholders' Equity:
Common stock - no par value (shares authorized 10,000,000;
2,285,486 and 2,285,289 shares issued and outstanding as of March
31, 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
92,396,850 92,528,818 Accumulated other comprehensive income
4,969,835 4,730,258 Total stockholders' equity
97,366,686 97,259,077
Total Liabilities and
Stockholders' Equity $ 144,385,459 $ 146,427,704
Investors Title Company and Subsidiaries Net
Premiums Written By State For the Three Months Ended March
31, 2010 and 2009 (Unaudited) For The
Three Months Ended March 31 2010 2009
Illinois $
435,491 $ 1,091,590 Kentucky
630,798
870,303 Michigan
956,846 852,273 New York
401,560
955,437 North Carolina
4,921,704 7,564,207 Pennsylvania
451,627 609,185 South Carolina
1,369,186 1,185,930
Tennessee
497,838 565,768 Virginia
965,568 1,227,764
West Virginia
412,212 547,581 Other States
777,057
939,759
Direct Premiums 11,819,887 16,409,797
Reinsurance Assumed
9,934 800 Reinsurance Ceded
(43,519) (777)
Net Premiums Written $
11,786,302 $ 16,409,820
Investors Title Company
and Subsidiaries Net Premiums Written By Branch and
Agency For the Three Months Ended March 31, 2010 and
2009 (Unaudited) For The Three Months
Ended March 31
2010 % 2009 %
Branch $ 3,749,800 31.8 $ 6,043,004
36.8
Agency 8,036,502 68.2
10,366,816 63.2
Total $
11,786,302 100 $ 16,409,820 100
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