Exhibit 99.1
Investors Title Company Announces First Quarter 2010 Results
CHAPEL HILL, N.C.--(BUSINESS WIRE)--April 30, 2010--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 |
CONTACT:
Investors Title Company
Elizabeth B. Lewter, 919-968-2200