Exhibit 99.1
Investors Title Company Announces First Quarter 2013 Financial Results
CHAPEL HILL, N.C.--(BUSINESS WIRE)--May 6, 2013--Investors Title Company today announced its results for the quarter ended March 31, 2013. The Company reported net income of $3,376,730, or $1.62 per diluted share, compared with $1,432,139, or $0.67 per diluted share, for the prior year period.
The Company achieved record first quarter revenues totaling $26,848,273, an increase of 19.8% versus the prior year period, resulting from a 21.7% increase in net premiums written. Historically low interest rates continue to help drive increases in mortgage lending activity. Various new premium charges and rate increases which became effective during the preceding twelve months also contributed to the increase.
Operating expenses increased 8.0% versus the prior year period, primarily due to increases in commissions to agents and payroll expense. Commissions to agents increased commensurate with the increase in agency premiums. The increase in payroll expense was largely driven by higher staffing levels to support ongoing software development initiatives. Positive legal developments in several claim matters, coupled with a significant current quarter recovery of a claim payment made in a prior period, contributed to a benefit in the claims provision during the quarter. In addition, claims experience for several recent policy years continued to emerge favorably in comparison with prior expectations.
Chairman J. Allen Fine added, “We are pleased to see continued strength in mortgage lending activity. Premiums written from purchase transactions increased substantially versus the prior year period, while the level of refinance activity has trended slightly downward. Positive revenue trends, coupled with favorable claims experience, led to very strong results for the first quarter.”
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, among other statements, any predictions regarding future agency base expansion or increasing operational efficiency. 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; 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, 2012, as filed with the Securities and Exchange Commission, and in subsequent filings.
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| Investors Title Company and Subsidiaries |
| Consolidated Statements of Income |
| For the Three Months Ended March 31, 2013 and 2012 |
| (Unaudited) |
| | | | | | |
| | | | | | |
| | | Three Months Ended |
| | | March 31 |
| | | 2013 | | 2012 |
| Revenues: | | | | | | |
| Net premiums written | | $ | 23,925,997 | | | $ | 19,667,420 |
| Investment income - interest and dividends | | | 920,485 | | | | 977,261 |
| Net realized gain on investments | | | 16,344 | | | | 192,881 |
| Other | | | 1,985,447 | | | | 1,576,712 |
| Total Revenues | | | 26,848,273 | | | | 22,414,274 |
| | | | | | |
| Operating Expenses: | | | | | | |
| Commissions to agents | | | 13,489,431 | | | | 11,192,127 |
| (Benefit) provision for claims | | | (389,058 | ) | | | 1,631,359 |
| Salaries, employee benefits and payroll taxes | | | 6,149,661 | | | | 4,990,632 |
| Office occupancy and operations | | | 1,048,665 | | | | 927,038 |
| Business development | | | 425,033 | | | | 393,447 |
| Filing fees, franchise and local taxes | | | 180,570 | | | | 351,922 |
| Premium and retaliatory taxes | | | 440,523 | | | | 414,794 |
| Professional and contract labor fees | | | 614,443 | | | | 400,537 |
| Other | | | 137,587 | | | | 167,279 |
| Total Operating Expenses | | | 22,096,855 | | | | 20,469,135 |
| | | | | | |
| Income Before Income Taxes | | | 4,751,418 | | | | 1,945,139 |
| | | | | | |
| Provision For Income Taxes | | | 1,365,000 | | | | 513,000 |
| | | | | | |
| Net Income | | | 3,386,418 | | | | 1,432,139 |
| | | | | | |
| Less: Net Income Attributable to Redeemable Noncontrolling Interests | | | (9,688 | ) | | | - |
| | | | | | |
| Net Income Attributable to the Company | | $ | 3,376,730 | | | $ | 1,432,139 |
| | | | | | |
| Basic Earnings Per Common Share | | $ | 1.65 | | | $ | 0.68 |
| | | | | | |
| Weighted Average Shares Outstanding - Basic | | | 2,044,801 | | | | 2,100,835 |
| | | | | | |
| Diluted Earnings Per Common Share | | $ | 1.62 | | | $ | 0.67 |
| | | | | | |
| Weighted Average Shares Outstanding - Diluted | | | 2,083,999 | | | | 2,128,788 |
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| | | | | | |
| Investors Title Company and Subsidiaries |
| Consolidated Balance Sheets |
| As of March 31, 2013 and December 31, 2012 |
| (Unaudited) |
| | | | | | |
| | | March 31, 2013 | | | December 31, 2012 |
| Assets | | | | | | |
| Investments in securities: | | | | | | |
| Fixed maturities, available-for-sale, at fair value | | $ | 77,498,573 | | $ | 81,936,978 |
| Equity securities, available-for-sale, at fair value | | | 30,809,436 | | | 28,510,933 |
| Short-term investments | | | 19,839,497 | | | 13,567,648 |
| Other investments | | | 6,941,042 | | | 6,763,100 |
| Total investments | | | 135,088,548 | | | 130,778,659 |
| | | | | | |
| Cash and cash equivalents | | | 20,501,601 | | | 20,810,018 |
| Premiums and fees receivable, net | | | 9,404,229 | | | 11,037,714 |
| Accrued interest and dividends | | | 882,517 | | | 1,037,447 |
| Prepaid expenses and other assets | | | 4,521,774 | | | 4,651,115 |
| Property, net | | | 3,737,380 | | | 3,603,323 |
| | | | | | |
| Total Assets | | $ | 174,136,049 | | $ | 171,918,276 |
| | | | | | |
| Liabilities and Stockholders' Equity | | | | | | |
| Liabilities: | | | | | | |
| Reserves for claims | | $ | 38,308,000 | | $ | 39,078,000 |
| Accounts payable and accrued liabilities | | | 12,929,995 | | | 15,477,545 |
| Current income taxes payable | | | 374,766 | | | 1,336,824 |
| Deferred income taxes, net | | | 2,516,444 | | | 893,156 |
| Total liabilities | | | 54,129,205 | | | 56,785,525 |
| | | | | | |
| Redeemable Noncontrolling Interest | | | 503,549 | | | 493,861 |
| | | | | | |
| | | | | | |
| Stockholders' Equity: | | | | | | |
Common stock - no par value (shares authorized 10,000,000; 2,045,968 and 2,043,359 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively, excluding 291,676 shares for 2013 and 2012 of common stock held by the Company's subsidiary) | | | 1 | | | 1 |
| Retained earnings | | | 109,125,314 | | | 105,820,459 |
| Accumulated other comprehensive income | | | 10,377,980 | | | 8,818,430 |
| Total stockholders' equity | | | 119,503,295 | | | 114,638,890 |
| | | | | | |
| Total Liabilities and Stockholders' Equity | | $ | 174,136,049 | | $ | 171,918,276 |
| | | | | | |
| Investors Title Company and Subsidiaries |
| Net Premiums Written By Branch and Agency |
| For the Three Months Ended March 31, 2013 and 2012 |
| (Unaudited) |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | Three Months Ended |
| | March 31 |
| | 2013 | | % | | 2012 | | % |
| Branch | | $ | 5,783,629 | | 24.2 | | $ | 4,822,792 | | 24.5 |
| | | | | | | | |
| Agency | | | 18,142,368 | | 75.8 | | | 14,844,628 | | 75.5 |
| | | | | | | | |
| Total | | $ | 23,925,997 | | 100.0 | | $ | 19,667,420 | | 100.0 |
CONTACT:
Investors Title Company
Elizabeth B. Lewter, 919-968-2200
