Investors Title Company (NASDAQ:ITIC) today announced its
results for the quarter ended March 31, 2017. The Company reported
a record first quarter net income attributable to the Company of
$4,476,055, or $2.36 per diluted share, compared with $1,814,040,
or $0.93 per diluted share, for the prior year period.
Revenues for the quarter increased 52.0% to a new first quarter
record of $37.8 million, compared with $24.9 million in the prior
year. Net premiums written benefitted from higher transaction
volumes, favorable rate changes in certain markets, and rising real
estate values. Despite reductions in refinance activity, higher
levels of home sales drove an increase in transaction volumes in
each of the Company’s primary markets. In addition, premiums
benefitted from the Company’s acquisition of University Title in
the fourth quarter of 2016. Other revenues increased 44.2%,
primarily due to certain non-premium charges which typically
fluctuate with net premiums written.
Operating expenses increased 40.7% versus the prior year period,
mainly due to increases in agent commissions commensurate with the
increase in premium volumes, as well as the inclusion of operating
expenses for University Title in the operating results. In
addition, payroll expenses increased as a result of higher levels
of incentive compensation and normal inflationary increases. The
provision for claims was higher in the current quarter primarily
due to more favorable claims experience recognized in the prior
year period. All other expense categories increased in line with
inflation.
Chairman J. Allen Fine commented, “The housing market continues
to benefit from an improving economy and relatively favorable
interest rates. Record levels of revenues, along with a higher mix
of direct business, continuation of favorable claims experience,
and stable overhead expenses resulted in the strongest first
quarter earnings results in the Company’s history. With the benefit
of improving economic conditions and favorable interest rates, we
are optimistic that the strong housing market will drive higher
levels of home sales throughout the year and in turn support
another year of strong performance for Investors Title.”
Investors Title Company’s subsidiaries issue and underwrite
title insurance policies. The Company also provides investment
management services and services in connection with tax-deferred
exchanges of like-kind property.
Certain statements contained herein constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include, among others, any
statements regarding the Company’s expected performance for this
year, future home price fluctuations, changes in home purchase or
refinance activity and the mix thereof, interest rate changes,
expansion of the Company’s market presence, enhancing competitive
strengths, positive development in housing affordability,
unemployment or overall economic conditions or statements regarding
our actuarial assumptions and the application of recent historical
claims experience to future periods. 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, including
the limited predictive power of historical claims experience;
declines in the performance of the Company’s investments;
government regulation; changes in the economy; loss of agency
relationships, or significant reductions in agent-originated
business; difficulties managing growth, whether organic or through
acquisitions 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, 2016, 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,
2017 and 2016
(Unaudited)
Three Months Ended March 31, 2017
2016
Revenues: Net premiums written
$ 33,641,564 $ 21,508,997 Investment income
–
interest and dividends
1,096,591 1,151,011 Net realized gain
on investments
103,339 149,830 Other
2,959,695
2,052,184 Total Revenues
37,801,189
24,862,022
Operating Expenses:
Commissions to agents
16,331,110 11,532,882 Provision for
claims
719,397 15,959 Salaries, employee benefits and
payroll taxes
9,902,271 7,471,951 Office occupancy and
operations
1,939,055 1,493,860 Business development
612,947 480,390 Filing fees, franchise and local taxes
153,556 230,054 Premium and retaliatory taxes
645,385
311,831 Professional and contract labor fees
439,176 538,653
Other
607,112 202,981 Total Operating
Expenses
31,350,009 22,278,561
Income before Income Taxes 6,451,180 2,583,461
Provision for Income Taxes 1,985,000
779,000
Net Income 4,466,180 1,804,461
Net Loss Attributable to Noncontrolling Interests
9,875 9,579
Net Income
Attributable to the Company $ 4,476,055
$ 1,814,040
Basic Earnings per Common
Share $ 2.37 $ 0.94
Weighted Average Shares Outstanding – Basic 1,885,587
1,934,318
Diluted Earnings per
Common Share $ 2.36 $ 0.93
Weighted Average Shares Outstanding – Diluted
1,894,838 1,940,963
Investors Title Company and
Subsidiaries
Consolidated Balance Sheets
As of March 31, 2017 and December 31,
2016
(Unaudited)
March 31, 2017 December 31,2016
Assets: Investments in securities: Fixed maturities,
available-for-sale, at fair value
$ 98,382,799 $
101,934,077 Equity securities, available-for-sale, at fair value
43,068,433 41,179,259 Short-term investments
13,635,465 6,558,840 Other investments
10,582,877
11,181,531 Total investments
165,669,574 160,853,707 Cash and
cash equivalents
25,718,050 27,928,472 Premium and fees
receivable
8,663,495 8,654,161 Accrued interest and
dividends
1,336,998 1,035,152 Prepaid expenses and other
assets
10,323,199 9,456,523 Property, net
9,477,362
8,753,466 Goodwill and other intangible assets, net
12,023,053 12,256,641
Total
Assets $ 233,211,731 $
228,938,122
Liabilities and Stockholders’ Equity
Liabilities: Reserves for claims
$ 35,445,000
$ 35,305,000 Accounts payable and accrued liabilities
22,577,847 26,146,480 Current income taxes payable
3,479,935 1,232,432 Deferred income taxes, net
11,421,379 11,118,256 Total liabilities
72,924,161 73,802,168
Stockholders’ Equity: Common stock
– no par value
(10,000,000 authorized shares; 1,886,088 and 1,884,283 shares
issued and outstanding as of March 31, 2017 and December 31, 2016,
respectively, excluding in each period 291,676 shares of common
stock held by the Company's subsidiary)
1 1 Retained
earnings
147,405,440 143,283,621 Accumulated other
comprehensive income
12,801,119
11,761,447 Total stockholders’ equity attributable to the Company
160,206,560 155,045,069 Noncontrolling interests
81,010 90,885 Total stockholders’
equity
160,287,570 155,135,954
Total
Liabilities and Stockholders’ Equity $
233,211,731 $ 228,938,122
Investors Title Company and
Subsidiaries
Net Premiums Written By Branch and
Agency
For the Three Months Ended March 31,
2017 and 2016
(Unaudited)
Three Months Ended March 31, 2017
% 2016 %
Branch
$ 9,463,769 28.1 $
5,477,657 25.5
Agency 24,177,795
71.9 16,031,340
74.5
Total $ 33,641,564
100.0 $ 21,508,997
100.0
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version on businesswire.com: http://www.businesswire.com/news/home/20170504005103/en/
Investors Title CompanyElizabeth B. Lewter, 919-968-2200
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