EXHIBIT 99.1
Investors Title Company Announces Fourth Quarter and Fiscal Year 2008 Results
CHAPEL HILL, N.C., Feb. 17, 2009 (GLOBE NEWSWIRE) -- Investors Title Company (Nasdaq:ITIC) today announced its results for the quarter and year ended December 31, 2008. For the fourth quarter ended December 31, 2008, the Company reported a net loss of $3,950,278 compared with net income of $1,068,080 for the same three-month period in 2007. Net loss per diluted share equaled $1.72 compared with net income per diluted share of $0.43 in the same period last year. Net premiums written decreased 20.4% to $12,389,025; investment income decreased 23.1% to $1,086,935; and exchange services revenue decreased 87.1% to $152,201.
For the year ended December 31, 2008, the Company reported a net loss of $1,182,799, compared with net income of $8,402,335 for 2007. Diluted loss per share was $0.50, compared with diluted income per share of $3.35 for 2007. Net premiums written decreased 9.0% to $63,662,187; investment income decreased 12.3% to $4,558,735; and revenues decreased 16.3% to $71,123,261 compared with the prior year.
Operating results for the fourth quarter ended December 31, 2008 were primarily impacted by an increase in the provision for claims, which included $5.2 million for three large claims, and $2.25 million in realized losses on investments which include approximately $1.4 million of losses on sales related to tax planning and $855,000 of charges due to impairments. Ongoing weakness in real estate activity led to a 19.2% decline in net premiums written from the third quarter level. Lower transaction volumes along with declining values of investment properties dramatically lowered the demand for tax-deferred exchange services.
"Operating conditions remained extremely challenging during the fourth quarter as we experienced not only a continued decline in sales but a spike in claims," commented J. Allen Fine, the Company's Chairman. "The bulk of the increase in claims was comprised of three occurrences and they are generally attributable to extreme conditions in the real estate market. The largest, at $3.3 million, was for unpaid mechanic liens by a large regional builder and the other two were both fraud-related, where funds intended to pay off mortgages were diverted out of trust accounts for personal use by individuals."
"As sales of new homes continued to deteriorate rapidly in the last quarter of 2008, we tightened underwriting procedures for providing mechanic lien coverage in our core market in order to improve the process for discovering the presence of unpaid subcontractors at the time of a new home sale," Mr. Fine continued. "Although fraud-related claims can be difficult to detect, we continually work to further refine risk management practices to mitigate this type of risk."
"We are closely monitoring conditions in the current real estate market in order to best position the Company during this downturn while being mindful of opportunities to enhance our competitive strengths and marketing position, and prepare ourselves for when the market stabilizes."
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 and investment management services to individuals, companies, banks and trusts.
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, 2007, as filed with the Securities and Exchange Commission.
Investors Title Company and Subsidiaries Consolidated Balance Sheets As of December 31, 2008 and 2007 (Unaudited) December 31, December 31, 2008 2007 ------------ ------------ Assets Investments in securities: Fixed maturities: Held-to-maturity, at amortized cost $ 451,681 $ 1,052,535 Available-for-sale, at fair value 87,708,500 90,530,946 Equity securities, available-for-sale, at fair value 9,965,297 14,431,866 Short-term investments 15,725,513 21,222,533 Other investments 2,040,962 1,788,501 ------------ ------------ Total investments 115,891,953 129,026,381 Cash and cash equivalents 5,155,046 3,000,762 Premiums and fees receivable, net 4,933,797 6,900,968 Accrued interest and dividends 1,225,070 1,254,641 Prepaid expenses and other assets 3,992,975 1,276,806 Property acquired in settlement of claims 395,734 278,476 Property, net 4,422,318 5,278,891 Deferred income taxes, net 3,841,295 2,625,495 ------------ ------------ Total Assets $139,858,188 $149,642,420 ============ ============ Liabilities and Stockholders' Equity Liabilities: Reserves for claims $ 39,238,000 $ 36,975,000 Accounts payable and accrued liabilities 10,294,912 11,236,781 Commissions and reinsurance payable 467,388 406,922 Current income taxes payable -- 1,747,877 ------------ ------------ Total liabilities 50,000,300 50,366,580 ------------ ------------ Stockholders' Equity: Common stock - no par value (shares authorized 10,000,000; 2,293,268 and 2,411,318 shares issued and outstanding 2008 and 2007, respectively, excluding 291,676 shares for 2008 and 2007 of common stock held by the Company's subsidiary) 1 1 Retained earnings 88,248,452 95,739,827 Accumulated other comprehensive income 1,609,435 3,536,012 ------------ ------------ Total stockholders' equity 89,857,888 99,275,840 ------------ ------------ Total Liabilities and Stockholders' Equity $139,858,188 $149,642,420 ============ ============
Investors Title Company and Subsidiaries Consolidated Statements of Income December 31, 2008 and 2007 (Unaudited) For The Three For The Twelve Months Ended Months Ended December 31 December 31 -------------------------- -------------------------- 2008 2007 2008 2007 ------------ ------------ ------------ ------------ Revenues: Underwriting income: Premiums Written $ 12,444,198 $ 15,622,242 $ 63,937,276 $ 70,248,166 Less- premiums for reinsurance ceded 55,173 51,427 275,089 264,177 ------------ ------------ ------------ ------------ Net premiums written 12,389,025 15,570,815 63,662,187 69,983,989 Investment income- interest and dividends 1,086,935 1,413,938 4,558,735 5,197,178 Net realized (loss) gain on investments (2,252,790) 34,660 (2,922,376) 921,871 Exchange services revenue 152,201 1,182,189 1,166,141 4,340,062 Other 937,608 1,240,400 4,658,574 4,499,187 ------------ ------------ ------------ ------------ Total Revenues 12,312,979 19,442,002 71,123,261 84,942,287 ------------ ------------ ------------ ------------ Operating Expenses: Commissions to agents 5,740,911 6,386,094 27,717,807 28,424,960 Provision for claims 6,876,805 1,609,440 15,206,637 10,134,719 Salaries, employee benefits and payroll taxes 3,542,233 5,317,243 19,605,500 20,819,094 Office occupancy and operations 1,267,435 1,419,183 5,107,843 5,598,576 Business development 482,199 625,540 2,104,935 2,183,853 Filing fees and taxes, other than payroll and income 163,123 62,192 587,235 531,777 Premium and retaliatory taxes 251,999 317,516 1,281,297 1,496,448 Professional and contract labor fees 289,146 712,420 1,684,208 2,789,878 Other 245,406 377,294 1,044,598 1,138,647 ------------ ------------ ------------ ------------ Total Operating Expenses 18,859,257 16,826,922 74,340,060 73,117,952 ------------ ------------ ------------ ------------ (Loss) Income Before Income Taxes (6,546,278) 2,615,080 (3,216,799) 11,824,335 ------------ ------------ ------------ ------------ (Benefit) Provision For Income Taxes (2,596,000) 1,547,000 (2,034,000) 3,422,000 ------------ ------------ ------------ ------------ Net (Loss) Income $(3,950,278) $ 1,068,080 $(1,182,799) $ 8,402,335 ============ ============ ============ ============ Basic (Loss) Earnings Per Common Share $ (1.72) $ 0.44 $ (0.50) $ 3.39 ============ ============ ============ ============ Weighted Average Shares Outstanding - Basic 2,293,086 2,452,416 2,364,361 2,479,321 ============ ============ ============ ============ Diluted (Loss) Earnings Per Common Share $ (1.72) $ 0.43 $ (0.50) $ 3.35 ============ ============ ============ ============ Weighted Average Shares Outstanding - Diluted 2,293,086 2,473,049 2,364,361 2,508,609 ============ ============ ============ ============
Investors Title Company and Subsidiaries Net Premiums Written By State December 31, 2008 and 2007 (Unaudited) For the For the Three Months Ended Twelve Months Ended December 31 December 31 State 2008 2007 2008 2007 ------------------------------------------------------------------ Illinois $ 555,933 $ 372,152 $ 2,140,440 $ 1,653,518 Kentucky 563,858 683,496 2,957,744 2,563,039 Michigan 594,403 723,256 3,326,904 3,073,006 New York 435,994 605,560 2,106,033 2,412,625 North Carolina 5,505,815 7,678,826 30,527,923 34,544,366 Pennsylvania 373,473 370,792 1,762,444 1,512,745 South Carolina 1,677,829 1,886,231 7,556,153 7,637,330 Tennessee 343,527 565,678 2,063,411 2,599,686 Virginia 1,087,891 1,274,943 5,789,337 6,121,746 West Virginia 460,496 484,318 2,077,603 2,029,885 Other 775,680 945,841 3,462,391 6,057,404 ----------- ----------- ----------- ----------- Direct Premiums $12,374,899 $15,591,093 $63,770,383 $70,205,350 Reinsurance Assumed 69,299 31,149 166,893 42,816 Reinsurance Ceded (55,173) (51,427) (275,089) (264,177) ----------- ----------- ----------- ----------- Net Premiums Written $12,389,025 $15,570,815 $63,662,187 $69,983,989 =========== =========== =========== ===========
Investors Title Company and Subsidiaries Net Premiums Written By Branch and Agency December 31, 2008 and 2007 (Unaudited) For The Three Months Ended December 31 ---------------------------------------------- 2008 % 2007 % ----------- --- ----------- --- Branch $ 4,360,037 35 $ 6,746,222 43 Agency 8,028,988 65 8,824,593 57 ----------- --- ----------- --- Total $12,389,025 100 $15,570,815 100 =========== === =========== ===
For The Twelve Months Ended December 31 ---------------------------------------------- 2008 % 2007 % ----------- --- ----------- --- Branch $24,312,013 38 $30,144,691 43 Agency 39,350,174 62 39,839,298 57 ----------- --- ----------- --- Total $63,662,187 100 $69,983,989 100 =========== === =========== ===
CONTACT: Investors Title Company Elizabeth B. Lewter (919) 968-2200