CHAPEL HILL, N.C., Aug. 7, 2008 (PRIME NEWSWIRE) -- J. Allen Fine, Chairman of Investors Title Company (Nasdaq:ITIC), announced that for the second quarter ended June 30, 2008, the Company reported a net loss of $273,934 compared with net income of $1,154,149 for the same three-month period in 2007. Net loss per diluted share equaled $0.11 compared with net income per diluted share of $0.46 in the same period last year. Net premiums written decreased 2.7% to $18,127,982, investment income decreased 12.5% to $1,112,681 and revenues decreased 7.9% to $20,352,800 compared with the prior year period.
For the six-month period ended June 30, 2008, the Company reported net income of $1,850,446, a decrease of 46.8%, compared with $3,476,363 for the same six-month period in 2007. Diluted earnings per share were $0.76, a decrease of 44.9% compared with $1.38 for the same six-month ended period in 2007. Net premiums written increased 1.5% to $35,941,342, investment income decreased 3.6% to $2,392,040 and revenues decreased 2.9% to $41,213,719 compared with the prior year period.
Net operating results for the quarters ended June 30, 2008 and 2007 were primarily impacted by an increase in the provision for claims of $2.4 million and $2.3 million, respectively, due to the occurrence of large fraud related claims. The claim during the current quarter resulted from the theft of settlement funds from an attorney's trust account intended to satisfy prior deeds of trusts. For the quarter ended June 30, 2008, the exchange services segment experienced a significant decline in revenue related to a decrease in demand and interest income earned on exchange funds compared with the prior year period. In addition, there was a decrease in realized gains on investments along with a decline in investment income due to a lower level of interest income earned on short-term funds.
Chairman Fine added, "Although we have made progress in building our agency business this year, the ongoing decline in real estate activity and the persistence of instances of fraud have combined to make a very challenging operating environment. We continue to direct our efforts towards increasing both our direct and agency business, enhancing our efficiency and improving management of fraud and other related risks that tend to surface in real estate downturns."
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.
The Investors Title Company logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3951
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 Statements of Income
June 30, 2008 and 2007
(Unaudited)
For The Three For The Six
Months Ended Months Ended
June 30 June 30
------------------------ ------------------------
2008 2007 2008 2007
---- ---- ---- ----
Revenues:
Underwriting
income:
Premiums Written $18,178,892 $18,715,760 $36,082,654 $35,590,737
Less-premiums for
reinsurance
ceded 50,910 89,581 141,312 172,016
----------- ----------- ----------- -----------
Net premiums
written 18,127,982 18,626,179 35,941,342 35,418,721
Investment income-
interest and
dividends 1,112,681 1,271,755 2,392,040 2,481,362
Net realized gain
(loss) on
investments (242,272) 200,023 (123,703) 366,203
Exchange services
revenue 66,714 870,083 471,412 2,115,562
Other 1,287,695 1,139,493 2,532,628 2,059,454
----------- ----------- ----------- -----------
Total Revenues 20,352,800 22,107,533 41,213,719 42,441,302
----------- ----------- ----------- -----------
Operating Expenses:
Commissions to
agents 7,949,938 7,733,004 15,269,208 14,578,292
Provision for
claims 4,298,414 4,352,005 6,347,010 6,161,438
Salaries,
employee
benefits and
payroll taxes 5,311,626 5,091,139 10,809,562 10,365,514
Office occupancy
and operations 1,328,083 1,452,901 2,692,335 2,889,024
Business
development 567,881 556,734 1,053,332 1,079,916
Filing fees and
taxes, other
than payroll and
income 138,875 126,455 331,504 291,668
Premium and
retaliatory
taxes 451,728 395,262 819,065 837,182
Professional and
contract labor
fees 502,531 826,140 1,023,940 1,471,150
Other 304,658 278,744 543,317 500,755
----------- ----------- ----------- -----------
Total Operating
Expenses 20,853,734 20,812,384 38,889,273 38,174,939
----------- ----------- ----------- -----------
Income (Loss)
Before Income
Taxes (500,934) 1,295,149 2,324,446 4,266,363
----------- ----------- ----------- -----------
Provision (Benefit)
For Income Taxes (227,000) 141,000 474,000 790,000
----------- ----------- ----------- -----------
Net Income (Loss) $ (273,934) $ 1,154,149 $ 1,850,446 $ 3,476,363
=========== =========== =========== ===========
Basic Earnings
(Loss) Per Common
Share $ (0.11) $ 0.46 $ 0.77 $ 1.40
=========== =========== =========== ===========
Weighted Average
Shares Outstanding
- Basic 2,409,206 2,484,874 2,410,852 2,491,955
=========== =========== =========== ===========
Diluted Earnings
(Loss) Per Common
Share $ (0.11) $ 0.46 $ 0.76 $ 1.38
=========== =========== =========== ===========
Weighted Average
Shares Outstanding
- Diluted 2,409,206 2,518,206 2,434,204 2,526,844
=========== =========== =========== ===========
Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of June 30, 2008 and December 31, 2007
(Unaudited)
June 30, December 31,
2008 2007
------------ ------------
Assets
Investments in securities:
Fixed maturities:
Held-to-maturity,
at amortized cost $ 556,648 $ 1,052,535
Available-for-sale,
at fair value 78,226,868 90,530,946
Equity securities,
available-for-sale,
at fair value 13,769,982 14,586,066
Short-term investments 29,967,654 21,222,533
Other investments 2,398,819 1,634,301
------------ ------------
Total investments 124,919,971 129,026,381
Cash and cash
equivalents 3,136,693 3,000,762
Premiums and fees
receivable, net 7,084,652 6,900,968
Accrued interest and
dividends 1,123,266 1,254,641
Prepaid expenses and
other assets 2,071,246 1,276,806
Property acquired in
settlement of claims 392,609 278,476
Property, net 4,808,139 5,278,891
Deferred income
taxes, net 2,706,061 2,625,495
------------ ------------
Total Assets $146,242,637 $149,642,420
============ ============
Liabilities and Stockholders' Equity
Liabilities:
Reserves for claims $ 37,236,000 $ 36,975,000
Accounts payable and
accrued liabilities 10,023,544 11,236,781
Commissions and
reinsurance payable 227,313 406,922
Current income taxes
payable -- 1,747,877
------------ ------------
Total liabilities 47,486,857 50,366,580
------------ ------------
Stockholders' Equity:
Common stock - no par
value (shares
authorized 10,000,000;
2,400,482 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 96,502,927 95,739,827
Accumulated other
comprehensive income 2,252,852 3,536,012
------------ ------------
Total stockholders'
equity 98,755,780 99,275,840
------------ ------------
Total Liabilities and
Stockholders' Equity $146,242,637 $149,642,420
============ ============
Investors Title Company and Subsidiaries
Net Premiums Written By State
June 30, 2008 and 2007
(Unaudited)
For the Three Months For the Six Months Ended
Ended June 30 June 30
State 2008 2007 2008 2007
---------------------------------------------------------------------
Illinois $ 564,584 $ 460,531 $ 1,154,553 $ 849,488
Kentucky 815,131 675,454 1,631,941 1,225,144
Maryland 105,285 310,321 373,109 597,192
Michigan 904,735 798,861 1,950,562 1,578,186
New York 685,689 658,675 1,197,887 1,165,434
North Carolina 8,767,479 9,218,284 17,716,146 17,131,757
Pennsylvania 522,147 406,236 965,276 732,890
South Carolina 2,012,755 1,857,204 3,916,135 3,573,604
Tennessee 614,000 732,461 1,155,674 1,381,851
Virginia 1,686,833 1,572,652 3,208,627 3,133,156
West Virginia 641,537 545,827 1,112,435 1,013,752
Other 858,517 1,474,517 1,603,765 3,196,616
----------- ----------- ----------- -----------
Direct Premiums $18,178,692 $18,711,023 $35,986,110 $35,579,070
Reinsurance Assumed 200 4,737 96,544 11,667
Reinsurance Ceded (50,910) (89,581) (141,312) (172,016)
----------- ----------- ----------- -----------
Net Premiums
Written $18,127,982 $18,626,179 $35,941,342 $35,418,721
=========== =========== =========== ===========
Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
June 30, 2008 and 2007
(Unaudited)
For The Three Months Ended
June 30
-----------------------------------------------------
2008 % 2007 %
-----------------------------------------------------
Branch $ 6,888,518 38 $ 7,907,600 42
Agency 11,239,464 62 10,718,579 58
-----------------------------------------------------
Total $ 18,127,982 100 $ 18,626,179 100
=====================================================
For The Six Months Ended
June 30
-----------------------------------------------------
2008 % 2007 %
-----------------------------------------------------
Branch $ 14,239,813 40 $ 15,040,911 42
Agency 21,701,529 60 20,377,810 58
-----------------------------------------------------
Total $ 35,941,342 100 $ 35,418,721 100
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