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
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