Exhibit 99.1
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INVESTORS TITLE COMPANY ANNOUNCES THIRD QUARTER 2006 RESULTS
Contact: Elizabeth B. Lewter | |
October 31, 2006 | |
Telephone: (919) 968-2200 | |
NASDAQ Symbol: ITIC |
FOR IMMEDIATE RELEASE:
Chapel Hill, NC - J. Allen Fine, Chairman of Investors Title Company, announced that for the third quarter ended September 30, 2006, the Company reported net income of $3,672,069, a decrease of 15.2% compared with $4,329,529 for the prior year period. Net income per diluted share equaled $1.44, a decrease of 13.8% compared with $1.67 per diluted share in the same period last year. Net premiums written decreased 13.1% to $18,242,676 and revenues decreased 9.6% to $21,722,334 compared with the prior year period.
For the nine-month period ended September 30, 2006, the Company reported net income of $10,862,547, an increase of 11.2%, compared with $9,772,021 for the same nine-month period in 2005. Diluted earnings per share were $4.23, an increase of 13.1% compared with $3.74 for the same nine-month period in 2005. Net premiums written decreased 7.1% to $53,997,893 and revenues decreased 1.8% to $65,027,803 compared with the prior year.
Premiums written declined during the latest reporting period as mortgage originations and real estate activity continued to slow from the record levels of the prior year. Slowing real estate sales also led to a decline in tax-deferred exchange volume. Revenue in the exchange segment increased due to higher rates of interest earned on funds. Also slightly offsetting the decline in premium revenue was an increase in investment income.
Chairman Fine added “As generally expected, transaction volume and mortgage loan origination has continued to slow as a result of higher interest rates, inventory imbalances and other market factors. We continue to monitor conditions in the real estate market in order to best align expenditures with changing activity levels, while looking for opportunities to extend our distribution base and further improve operating efficiencies.”
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.
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Investors Title Company and Subsidiaries | |||||||||||||
Consolidated Statements of Income | |||||||||||||
September 30, 2006 and 2005 | |||||||||||||
(Unaudited) | |||||||||||||
For The Three Months Ended September 30 | For The Nine Months Ended September 30 | ||||||||||||
2006 | 2005 | 2006 | 2005 | ||||||||||
Revenues: | |||||||||||||
Underwriting income: | |||||||||||||
Premiums written | $ | 18,347,342 | $ | 21,035,519 | $ | 54,315,786 | $ | 58,333,687 | |||||
Less-premiums for reinsurance ceded | 104,666 | 49,419 | 317,893 | 234,234 | |||||||||
Net premiums written | 18,242,676 | 20,986,100 | 53,997,893 | 58,099,453 | |||||||||
Investment income-interest and dividends | 1,036,155 | 812,659 | 3,064,905 | 2,373,983 | |||||||||
Net realized gain (loss) on sales of investments | (55,930 | ) | 69,597 | 488,527 | 89,504 | ||||||||
Exchange services revenue | 1,604,992 | 1,222,602 | 4,541,081 | 3,272,034 | |||||||||
Other | 894,441 | 942,365 | 2,935,397 | 2,381,990 | |||||||||
Total | 21,722,334 | 24,033,323 | 65,027,803 | 66,216,964 | |||||||||
Operating Expenses: | |||||||||||||
Commissions to agents | 6,796,146 | 8,209,799 | 20,368,864 | 23,050,329 | |||||||||
Provision for claims | 1,992,901 | 2,283,372 | 5,878,592 | 6,354,485 | |||||||||
Salaries, employee benefits and payroll taxes | 4,901,427 | 4,540,061 | 14,824,296 | 14,320,940 | |||||||||
Office occupancy and operations | 1,247,299 | 1,133,563 | 3,978,654 | 3,722,639 | |||||||||
Business development | 568,982 | 591,506 | 1,622,145 | 1,483,367 | |||||||||
Taxes, other than payroll and income | 196,707 | 67,234 | 493,599 | 387,218 | |||||||||
Premium and retaliatory taxes | 396,851 | 411,084 | 1,067,461 | 1,204,399 | |||||||||
Professional fees | 554,487 | 370,297 | 1,879,643 | 1,461,478 | |||||||||
Other | 92,435 | 186,878 | 531,002 | 298,088 | |||||||||
Total | 16,747,235 | 17,793,794 | 50,644,256 | 52,282,943 | |||||||||
Income Before Income Taxes | 4,975,099 | 6,239,529 | 14,383,547 | 13,934,021 | |||||||||
Provision For Income Taxes | 1,303,030 | 1,910,000 | 3,521,000 | 4,162,000 | |||||||||
Net Income | $ | 3,672,069 | $ | 4,329,529 | $ | 10,862,547 | $ | 9,772,021 | |||||
Basic Earnings Per Common Share | $ | 1.46 | $ | 1.69 | $ | 4.29 | $ | 3.81 | |||||
Weighted Average Shares Outstanding - Basic | 2,517,691 | 2,559,154 | 2,534,883 | 2,562,247 | |||||||||
Diluted Earnings Per Common Share | $ | 1.44 | $ | 1.67 | $ | 4.23 | $ | 3.74 | |||||
Weighted Average Shares Outstanding - Diluted | 2,550,607 | 2,600,289 | 2,569,585 | 2,611,073 | |||||||||
Investors Title Company and Subsidiaries | ||||
Consolidated Balance Sheets | ||||
As of September 30, 2006 and December 31, 2005 | ||||
(Unaudited) |
September 30, 2006 | December 31, 2005 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 3,957,098 | $ | 14,608,481 | |||
Investments in securities: | |||||||
Fixed maturities: | |||||||
Held-to-maturity, at amortized cost | 1,200,276 | 1,648,708 | |||||
Available-for-sale, at fair value | 96,677,536 | 75,472,342 | |||||
Equity securities, available-for-sale at fair value | 12,363,984 | 9,437,678 | |||||
Short-term investments | 3,000,463 | 7,257,734 | |||||
Other investments | 1,629,631 | 1,336,111 | |||||
Total investments | 114,871,890 | 95,152,573 | |||||
Premiums and fees receivable, net | 7,326,398 | 7,818,558 | |||||
Accrued interest and dividends | 1,081,266 | 1,010,198 | |||||
Prepaid expenses and other assets | 6,796,132 | 1,592,326 | |||||
Property acquired in settlement of claims | 417,800 | 359,980 | |||||
Property, net | 6,119,700 | 5,466,765 | |||||
Deferred income taxes, net | 2,011,981 | 2,462,647 | |||||
Total Assets | $ | 142,582,265 | $ | 128,471,528 | |||
Liabilities and Stockholders' Equity | |||||||
Liabilities: | |||||||
Reserves for claims | $ | 36,477,000 | $ | 34,857,000 | |||
Accounts payable and accrued liabilities | 12,758,421 | 7,928,384 | |||||
Commissions and reinsurance payables | 353,362 | 442,098 | |||||
Current income taxes payable | 126,255 | 946,790 | |||||
Total liabilities | 49,715,038 | 44,174,272 | |||||
Stockholders' Equity: | |||||||
Common stock - no par value (shares authorized 10,000,000; | |||||||
2,506,784 and 2,549,434 shares issued and outstanding 2006 and 2005, | |||||||
respectively, excluding 291,676 and 297,783 shares 2006 and 2005, | |||||||
respectively, of common stock held by the Company's subsidiary) | 1 | 1 | |||||
Retained earnings | 90,002,406 | 81,477,022 | |||||
Accumulated other comprehensive income (net unrealized gain on investments) | 2,864,820 | 2,820,233 | |||||
Total stockholders' equity | 92,867,227 | 84,297,256 | |||||
Total Liabilities and Stockholders' Equity | $ | 142,582,265 | $ | 128,471,528 | |||
Investors Title Company and Subsidiaries | ||||||||
Net Premiums Written By State | ||||||||
September 30, 2006 and 2005 | ||||||||
(Unaudited) |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||
September 30 | September 30 | ||||||||||||
State | 2006 | 2005 | 2006 | 2005 | |||||||||
Alabama | $ | 185,318 | $ | 304,229 | $ | 759,499 | $ | 1,034,232 | |||||
Florida | 359,531 | 410,075 | 965,822 | 1,182,015 | |||||||||
Illinois | 291,810 | 244,111 | 819,718 | 735,441 | |||||||||
Kentucky | 618,829 | 616,986 | 1,775,866 | 1,601,826 | |||||||||
Maryland | 344,598 | 471,464 | 1,126,272 | 1,331,992 | |||||||||
Michigan | 825,711 | 1,229,606 | 2,584,541 | 3,614,984 | |||||||||
Minnesota | 200,469 | 227,850 | 842,538 | 756,642 | |||||||||
Mississippi | 225,319 | 249,728 | 526,996 | 811,321 | |||||||||
Nebraska | 172,005 | 212,204 | 503,451 | 597,899 | |||||||||
New York | 602,667 | 998,587 | 1,815,458 | 2,358,964 | |||||||||
North Carolina | 9,185,274 | 10,111,914 | 27,400,208 | 27,477,382 | |||||||||
Pennsylvania | 373,498 | 460,000 | 1,100,005 | 1,287,648 | |||||||||
South Carolina | 2,045,816 | 1,748,951 | 4,984,670 | 5,136,939 | |||||||||
Tennessee | 686,497 | 775,812 | 1,967,589 | 2,066,396 | |||||||||
Virginia | 1,515,282 | 2,078,630 | 5,087,324 | 6,032,643 | |||||||||
West Virginia | 577,884 | 728,273 | 1,673,725 | 1,740,338 | |||||||||
Other States | 135,101 | 167,099 | 373,945 | 552,979 | |||||||||
Direct Premiums | 18,345,609 | 21,035,519 | 54,307,627 | 58,319,641 | |||||||||
Reinsurance Assumed | 1,733 | - | 8,159 | 14,046 | |||||||||
Reinsurance Ceded | (104,666 | ) | (49,419 | ) | (317,893 | ) | (234,234 | ) | |||||
Net Premiums Written | $ | 18,242,676 | $ | 20,986,100 | $ | 53,997,893 | $ | 58,099,453 | |||||
Investors Title Company and Subsidiaries | |||||||||||
Net Premiums Written By Branch and Agency | |||||||||||
September 30, 2006 and 2005 | |||||||||||
(Unaudited) | |||||||||||
For The Three Months Ended | For The Nine Months Ended | ||||||||||||||||||||||||
September 30 | September 30 | ||||||||||||||||||||||||
2006 | % | 2005 | % | 2006 | % | 2005 | % | ||||||||||||||||||
Branch | $ | 8,602,081 | 47 | $ | 9,636,878 | 46 | $ | 25,333,046 | 47 | $ | 26,017,989 | 45 | |||||||||||||
Agency | $ | 9,640,595 | 53 | $ | 11,349,222 | 54 | $ | 28,664,847 | 53 | $ | 32,081,464 | 55 | |||||||||||||
Total | $ | 18,242,676 | 100 | $ | 20,986,100 | 100 | $ | 53,997,893 | 100 | $ | 58,099,453 | 100 | |||||||||||||