Exhibit 99.1
Investors Title Company Announces Fourth Quarter and Fiscal Year 2015 Results
CHAPEL HILL, N.C.--(BUSINESS WIRE)--February 10, 2016--Investors Title Company today announced its results for the fourth quarter and year ended December 31, 2015.
For the year, net income attributable to the Company increased 29.9% to $12.5 million, or $6.30 per diluted share, versus $9.6 million, or $4.74 per diluted share, for the prior year. For the quarter, net income attributable to the Company decreased 18.5% to $2.2 million, or $1.12 per diluted share, versus $2.7 million, or $1.33 per diluted share, for the prior year period.
Revenues for the year reached $127.2 million, a new record for the Company, which represents an increase of 3.3% versus the prior year. Growth in premium revenues was driven primarily by growth in real estate values, higher levels of home sales, and to a lesser extent, higher levels of refinance activity. Revenues from direct operations comprised 25.3% of premiums for the year, up from 21.9% last year.
Operating expenses were $109.4 million, and remained virtually flat with the prior year. Commissions decreased 5.3% due to a favorable mix of direct business. Claims expense, which continues to benefit from the absence of large claims related to defalcations in recent policy years, decreased 14.4% versus the prior year due to fewer new claim filings. Payroll expenses increased 11.2%, due to normal inflationary increases in wages and benefits, higher staffing levels supporting ongoing software development activities, and higher levels of incentive compensation. All other expenses increased 8.7%, mainly due to higher transaction volumes and increased software development activity.
For the quarter, revenues decreased 9.6% versus the prior year period, which can be attributed to lower levels of premiums written in the Texas market, partially offset by growth in other markets. Overall, transaction volume increased substantially versus the prior year period, with increases in both purchase and refinance activity. Operating expenses decreased 8.5%, primarily due to the impact of lower Texas volumes on commissions, as well as overall favorable claims experience. The lower commissions and claims expenses were partially offset by increases in other expense categories, mainly due to the same factors that influenced results for the year.
Chairman J. Allen Fine commented, “I am pleased with the Company’s strong results for both the year and the fourth quarter. The record level of revenues we achieved in 2015 is the result of a strong real estate market as well as our continued efforts to develop relationships in the markets we serve.”
“Revenues in the fourth quarter held up well, considering potential impacts of the new federally mandated disclosure requirements that went into effect during the quarter, as well as the Fed’s first rate hike in almost a decade. In addition, we successfully reached key milestone objectives in our technology program, while investing significant energy into preparing ourselves and our clients for implementation of the new mortgage disclosures.”
“We are optimistic that the strong housing market will continue into 2016, with potential improvements in both transaction levels and home prices,” added Mr. Fine. “For the coming year and beyond, we will remain focused on long-term strategies to enhance our competitive strengths and financial position, and to profitably expand our market presence.”
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.
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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 others, any statements regarding future home price increases, changes in home purchase or refinance activity, 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; the possible loss of agency relationships, or significant reductions in agent-originated business 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, 2014, as filed with the Securities and Exchange Commission, and in subsequent filings.
Investors Title Company and Subsidiaries Consolidated Statements of Income For the Three and Twelve Months Ended December 31, 2015 and 2014 (Unaudited) |
| |
| | Three Months Ended December 31, | | Twelve Months Ended December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Revenues: | | | | | | | | |
| Net premiums written | | $ | 26,103,532 | | | $ | 28,847,616 | | | $ | 112,475,686 | | | $ | 109,963,556 | |
| Investment income – interest and dividends | | 1,104,264 | | | 1,128,655 | | | 4,531,319 | | | 4,259,501 | |
| Net realized (loss) gain on investments | | (717,499 | ) | | (324,614 | ) | | (116,163 | ) | | 268,294 | |
| Other | | 2,384,901 | | | 2,283,772 | | | 10,309,230 | | | 8,627,935 | |
| Total Revenues | | 28,875,198 | | | 31,935,429 | | | 127,200,072 | | | 123,119,286 | |
| | | | | | | | |
| Operating Expenses: | | | | | | | | |
| Commissions to agents | | 13,780,748 | | | 17,389,430 | | | 62,174,301 | | | 65,632,353 | |
| Provision for claims | | 857,093 | | | 1,052,238 | | | 4,478,494 | | | 5,229,716 | |
| Salaries, employee benefits and payroll taxes | | 6,939,258 | | | 5,968,109 | | | 28,041,213 | | | 25,218,225 | |
| Office occupancy and operations | | 1,795,530 | | | 1,365,982 | | | 5,885,336 | | | 5,049,962 | |
| Business development | | 739,912 | | | 751,619 | | | 2,373,270 | | | 2,333,491 | |
| Filing fees, franchise and local taxes | | 160,364 | | | 169,887 | | | 732,985 | | | 817,909 | |
| Premium and retaliatory taxes | | 476,897 | | | 519,275 | | | 2,161,571 | | | 1,851,767 | |
| Professional and contract labor fees | | 764,942 | | | 700,211 | | | 2,691,411 | | | 2,676,483 | |
| Other | | 175,520 | | | 164,229 | | | 884,438 | | | 820,882 | |
| Total Operating Expenses | | 25,690,264 | | | 28,080,980 | | | 109,423,019 | | | 109,630,788 | |
| | | | | | | | |
| Income before Income Taxes | | 3,184,934 | | | 3,854,449 | | | 17,777,053 | | | 13,488,498 | |
| | | | | | | | |
| Provision for Income Taxes | | 978,000 | | | 1,160,000 | | | 5,228,000 | | | 3,816,000 | |
| | | | | | | | |
| Net Income | | 2,206,934 | | | 2,694,449 | | | 12,549,053 | | | 9,672,498 | |
| | | | | | | | |
| Net Income Attributable to Noncontrolling Interests | | (10,612 | ) | | — | | | (15,148 | ) | | (23,523 | ) |
| | | | | | | | |
| Net Income Attributable to the Company | | $ | 2,196,322 | | | $ | 2,694,449 | | | $ | 12,533,905 | | | $ | 9,648,975 | |
| | | | | | | | |
| Basic Earnings per Common Share | | $ | 1.13 | | | $ | 1.33 | | | $ | 6.32 | | | $ | 4.75 | |
| | | | | | | | |
| Weighted Average Shares Outstanding – Basic | | 1,952,077 | | | 2,026,125 | | | 1,984,360 | | | 2,031,760 | |
| | | | | | | | |
| Diluted Earnings per Common Share | | $ | 1.12 | | | $ | 1.33 | | | $ | 6.30 | | | $ | 4.74 | |
| | | | | | | | |
| Weighted Average Shares Outstanding – Diluted | | 1,958,484 | | | 2,031,660 | | | 1,989,799 | | | 2,037,534 | |
Investors Title Company and Subsidiaries Consolidated Balance Sheets As of December 31, 2015 and 2014 (Unaudited) |
| |
| December 31,
2015 | | December 31,
2014 |
| Assets: | | | |
| Investments in securities: | | | |
| Fixed maturities, available-for-sale, at fair value | $ | 106,066,384 | | | $ | 109,048,290 |
| Equity securities, available-for-sale, at fair value | 37,513,464 | | | 39,254,981 |
| Short-term investments | 6,865,406 | | | 2,576,993 |
| Other investments | 10,106,828 | | | 8,530,929 |
| Total investments | 160,552,082 | | | 159,411,193 |
| | | |
| Cash and cash equivalents | 21,790,068 | | | 15,826,515 |
| Premium and fees receivable | 8,392,697 | | | 8,544,183 |
| Accrued interest and dividends | 1,004,126 | | | 1,063,837 |
| Prepaid expenses and other assets | 12,634,105 | | | 7,732,677 |
| Property, net | 7,148,951 | | | 5,460,805 |
| Total Assets | $ | 211,522,029 | | | $ | 198,039,210 |
| | | |
| Liabilities and Stockholders’ Equity | | | |
| Liabilities: | | | |
| Reserves for claims | $ | 37,788,000 | | | $ | 36,677,000 |
| Accounts payable and accrued liabilities | 25,043,588 | | | 18,290,819 |
| Current income taxes payable | 210,355 | | | 92,192 |
| Deferred income taxes, net | 5,703,006 | | | 5,415,493 |
| Total liabilities | 68,744,949 | | | 60,475,504 |
| | | |
| Stockholders’ Equity: | | | |
Common stock - no par value (10,000,000 authorized shares; 1,949,797 and 2,023,270
shares issued and outstanding 2015 and 2014, respectively, excluding 291,676 shares
for 2015 and 2014 of common stock held by the Company's subsidiary) | 1 | | | 1 |
| Retained earnings | 131,186,866 | | | 124,707,196 |
| Accumulated other comprehensive income | 11,483,015 | | | 12,856,509 |
| Total stockholders’ equity attributable to the Company | 142,669,882 | | | 137,563,706 |
| Noncontrolling interests | 107,198 | | | — |
| Total stockholders’ equity | 142,777,080 | | | 137,563,706 |
| Total Liabilities and Stockholders’ Equity | $ | 211,522,029 | | | $ | 198,039,210 |
Investors Title Company and Subsidiaries Net Premiums Written By Branch and Agency For the Three and Twelve Months Ended December 31, 2015 and 2014 (Unaudited) |
| |
| Three Months Ended December 31, | | | Twelve Months Ended December 31, |
| 2015 | % | | | 2014 | % | | | 2015 | % | | | 2014 | % |
| Branch | $ | 7,119,168 | | 27.3 | | | $ | 6,134,866 | | 21.3 | | | $ | 28,400,531 | | 25.3 | | | $ | 24,057,032 | | 21.9 |
| | | | | | | | | | | | | | |
| Agency | 18,984,364 | | 72.7 | | | 22,712,750 | | 78.7 | | | 84,075,155 | | 74.7 | | | 85,906,524 | | 78.1 |
| | | | | | | | | | | | | | |
| Total | $ | 26,103,532 | | 100.0 | | | $ | 28,847,616 | | 100.0 | | | $ | 112,475,686 | | 100.0 | | | $ | 109,963,556 | | 100.0 |
CONTACT:
Investors Title Company
Elizabeth B. Lewter, 919-968-2200
