CHAPEL HILL, N.C., May 9, 2008 (PRIME NEWSWIRE) -- J. Allen Fine, Chairman of Investors Title Company (Nasdaq:ITIC), announced that for the quarter ended March 31, 2008, the Company reported net income of $2,124,380, a decrease of 8.5% compared with $2,322,214 for the prior year period. Net income per diluted share equaled $0.87, a decrease of 5.4% compared with $0.92 per diluted share in the same period last year. Net premiums written increased 6.1% to $17,813,360 and total revenues increased 2.6% to $20,860,919 compared with the prior year period.
Revenues exceeded the prior year period primarily due to an increase in net premiums written. The increase was driven by a pick up in mortgage refinancing during the quarter and refinance activity represented approximately 38% of premiums. Investment income and revenue from other sources also increased during the quarter with the gains in other income arising primarily from equity in earnings of unconsolidated affiliates and the Trust division. These increases were offset by a decline in revenue in our exchange segment resulting from continued declines in exchange activity.
The increase in operating expenses was primarily due to a higher level of premiums written by our agents and the corresponding increase in commissions paid, along with an increase in the provision for claims. The claims provision increased during the quarter reflecting slightly higher claims experience during the quarter.
Chairman Fine added, "Our premiums written received a boost from an increase in mortgage refinancing during the first quarter, which is typically a seasonally slow period of the year for real estate activity. We remain watchful over conditions and trends in the real estate marketplace in order to determine how to best position the Company to withstand the current market downturn."
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 risks, 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 Statements of Income March 31, 2008 and 2007 (Unaudited) For The Three Months Ended March 31 ------------------------- 2008 2007 ----------- ----------- Revenues: Underwriting income: Premiums Written $17,903,762 $16,874,977 Less-premiums for reinsurance ceded 90,402 82,435 ----------- ----------- Net premiums written 17,813,360 16,792,542 Investment income-interest and dividends 1,279,359 1,209,607 Net realized gain on sales of investments 118,569 166,180 Exchange services revenue 404,698 1,245,479 Other 1,244,933 919,961 ----------- ----------- Total Revenues 20,860,919 20,333,769 ----------- ----------- Operating Expenses: Commissions to agents 7,319,270 6,845,288 Provision for claims 2,048,596 1,809,433 Salaries, employee benefits and payroll taxes 5,497,936 5,274,375 Office occupancy and operations 1,364,252 1,436,123 Business development 485,451 523,182 Filing fees and taxes, other than payroll and income 192,629 165,213 Premium and retaliatory taxes 367,337 441,920 Professional and contract labor fees 521,409 645,010 Other 238,659 222,011 ----------- ----------- Total Operating Expenses 18,035,539 17,362,555 ----------- ----------- Income Before Income Taxes 2,825,380 2,971,214 ----------- ----------- Provision For Income Taxes 701,000 649,000 ----------- ----------- Net Income $ 2,124,380 $ 2,322,214 =========== =========== Basic Earnings Per Common Share $ 0.88 $ 0.93 =========== =========== Weighted Average Shares Outstanding - Basic 2,412,499 2,499,035 =========== =========== Diluted Earnings Per Common Share $ 0.87 $ 0.92 =========== =========== Weighted Average Shares Outstanding - Diluted 2,437,195 2,535,858 =========== =========== Investors Title Company and Subsidiaries Consolidated Balance Sheets As of March 31, 2008 and December 31, 2007 (Unaudited) March 31, December 31, 2008 2007 ------------ ------------ Assets Investments in securities: Fixed maturities: Held-to-maturity, at amortized cost $ 556,575 $ 1,052,535 Available-for-sale, at fair value 81,252,712 90,530,946 Equity securities, available-for-sale, at fair value 13,220,924 14,586,066 Short-term investments 29,576,039 21,222,533 Other investments 2,377,785 1,634,301 ------------ ------------ Total investments 126,984,035 129,026,381 Cash and cash equivalents 3,209,422 3,000,762 Premiums and fees receivable, net 7,436,409 6,900,968 Accrued interest and dividends 1,088,312 1,254,641 Prepaid expenses and other assets 1,267,623 1,276,806 Property acquired in settlement of claims 278,476 278,476 Property, net 5,066,836 5,278,891 Deferred income taxes, net 2,551,113 2,625,495 ------------ ------------ Total Assets $147,882,226 $149,642,420 ============ ============ Liabilities and Stockholders' Equity Liabilities: Reserves for claims $ 37,079,000 $ 36,975,000 Accounts payable and accrued liabilities 9,423,111 11,236,781 Commissions and reinsurance payable 197,640 406,922 Current income taxes payable 579,877 1,747,877 ------------ ------------ Total liabilities 47,279,628 50,366,580 ------------ ------------ Stockholders' Equity: Common stock - no par value (shares authorized 10,000,000; 2,415,020 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 97,680,946 95,739,827 Accumulated other comprehensive income 2,921,651 3,536,012 ------------ ------------ Total stockholders' equity 100,602,598 99,275,840 ------------ ------------ Total Liabilities and Stockholders' Equity $147,882,226 $149,642,420 ============ ============ Investors Title Company and Subsidiaries Net Premiums Written By State For the Three Months Ended March 31, 2008 and 2007 (Unaudited) 2008 2007 ------------ ------------ Illinois $ 589,969 $ 388,957 Kentucky 816,810 549,690 Maryland 267,824 286,871 Michigan 1,045,827 779,325 New York 512,198 506,759 North Carolina 8,948,667 7,913,473 Pennsylvania 443,129 326,654 South Carolina 1,903,380 1,716,400 Tennessee 541,674 649,390 Virginia 1,521,794 1,560,504 West Virginia 470,898 467,925 Other States 745,248 1,722,099 ------------ ------------ Direct Premiums 17,807,418 16,868,047 Reinsurance Assumed 96,344 6,930 Reinsurance Ceded (90,402) (82,435) ------------ ------------ Net Premiums Written $ 17,813,360 $ 16,792,542 ============ ============ Investors Title Company and Subsidiaries Net Premiums Written By Branch and Agency March 31, 2008 and 2007 (Unaudited) For The Three Months Ended March 31 -------------------------------------------- 2008 % 2007 % -------------------------------------------- Branch $ 7,351,295 41 $ 7,133,311 42 Agency 10,462,065 59 9,659,231 58 -------------------------------------------- Total $17,813,360 100 $16,792,542 100 ============================================