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
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2008 2007
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Revenues:
Underwriting income:
Premiums Written $17,903,762 $16,874,977
Less-premiums for reinsurance ceded 90,402 82,435
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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
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Total Revenues 20,860,919 20,333,769
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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
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Total Operating Expenses 18,035,539 17,362,555
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Income Before Income Taxes 2,825,380 2,971,214
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Provision For Income Taxes 701,000 649,000
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Net Income $ 2,124,380 $ 2,322,214
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Basic Earnings Per Common Share $ 0.88 $ 0.93
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Weighted Average Shares Outstanding
- Basic 2,412,499 2,499,035
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Diluted Earnings Per Common Share $ 0.87 $ 0.92
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Weighted Average Shares Outstanding
- Diluted 2,437,195 2,535,858
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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
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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
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Total Assets $147,882,226 $149,642,420
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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
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Total liabilities 47,279,628 50,366,580
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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
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Total stockholders' equity 100,602,598 99,275,840
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Total Liabilities and
Stockholders' Equity $147,882,226 $149,642,420
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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
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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
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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
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2008 % 2007 %
--------------------------------------------
Branch $ 7,351,295 41 $ 7,133,311 42
Agency 10,462,065 59 9,659,231 58
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Total $17,813,360 100 $16,792,542 100
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