Investors Title Company Announces First Quarter 2013 Financial Results

Business Wire

CHAPEL HILL, N.C.--(BUSINESS WIRE)--

Investors Title Company today announced its results for the quarter ended March 31, 2013. The Company reported net income of $3,376,730, or $1.62 per diluted share, compared with $1,432,139, or $0.67 per diluted share, for the prior year period.

The Company achieved record first quarter revenues totaling $26,848,273, an increase of 19.8% versus the prior year period, resulting from a 21.7% increase in net premiums written. Historically low interest rates continue to help drive increases in mortgage lending activity. Various new premium charges and rate increases which became effective during the preceding twelve months also contributed to the increase.

Operating expenses increased 8.0% versus the prior year period, primarily due to increases in commissions to agents and payroll expense. Commissions to agents increased commensurate with the increase in agency premiums. The increase in payroll expense was largely driven by higher staffing levels to support ongoing software development initiatives. Positive legal developments in several claim matters, coupled with a significant current quarter recovery of a claim payment made in a prior period, contributed to a benefit in the claims provision during the quarter. In addition, claims experience for several recent policy years continued to emerge favorably in comparison with prior expectations.

Chairman J. Allen Fine added, “We are pleased to see continued strength in mortgage lending activity. Premiums written from purchase transactions increased substantially versus the prior year period, while the level of refinance activity has trended slightly downward. Positive revenue trends, coupled with favorable claims experience, led to very strong results for the first quarter.”

Investors Title Company is engaged through its subsidiaries in the business of issuing and underwriting title insurance policies. The Company also provides investment management services to individuals, companies, banks and trusts, as well as services in connection with tax-deferred exchanges of like-kind property.

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 other statements, any predictions regarding future agency base expansion or increasing operational efficiency. 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; declines in the performance of the Company’s investments; government regulation; 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, 2012, as filed with the Securities and Exchange Commission, and in subsequent filings.

 
Investors Title Company and Subsidiaries
Consolidated Statements of Income
For the Three Months Ended March 31, 2013 and 2012
(Unaudited)
   
 
Three Months Ended
March 31

2013

2012

Revenues:
Net premiums written $ 23,925,997 $ 19,667,420
Investment income - interest and dividends 920,485 977,261
Net realized gain on investments 16,344 192,881
Other 1,985,447   1,576,712
Total Revenues 26,848,273   22,414,274
 
Operating Expenses:
Commissions to agents 13,489,431 11,192,127
(Benefit) provision for claims (389,058 ) 1,631,359
Salaries, employee benefits and payroll taxes 6,149,661 4,990,632
Office occupancy and operations 1,048,665 927,038
Business development 425,033 393,447
Filing fees, franchise and local taxes 180,570 351,922
Premium and retaliatory taxes 440,523 414,794
Professional and contract labor fees 614,443 400,537
Other 137,587   167,279
Total Operating Expenses 22,096,855   20,469,135
 
Income Before Income Taxes 4,751,418   1,945,139
 
Provision For Income Taxes 1,365,000   513,000
 
Net Income 3,386,418 1,432,139
 
Less: Net Income Attributable to Redeemable Noncontrolling Interests (9,688 ) -
 
Net Income Attributable to the Company $ 3,376,730   $ 1,432,139
 
Basic Earnings Per Common Share $ 1.65   $ 0.68
 
Weighted Average Shares Outstanding - Basic 2,044,801   2,100,835
 
Diluted Earnings Per Common Share $ 1.62   $ 0.67
 
Weighted Average Shares Outstanding - Diluted 2,083,999   2,128,788
 
   
Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of March 31, 2013 and December 31, 2012
(Unaudited)
 
March 31, 2013   December 31, 2012
Assets
Investments in securities:
Fixed maturities, available-for-sale, at fair value $ 77,498,573 $ 81,936,978
Equity securities, available-for-sale, at fair value 30,809,436 28,510,933
Short-term investments 19,839,497 13,567,648
Other investments 6,941,042 6,763,100
Total investments 135,088,548 130,778,659
 
Cash and cash equivalents 20,501,601 20,810,018
Premiums and fees receivable, net 9,404,229 11,037,714
Accrued interest and dividends 882,517 1,037,447
Prepaid expenses and other assets 4,521,774 4,651,115
Property, net 3,737,380 3,603,323
 
Total Assets $ 174,136,049 $ 171,918,276
 
Liabilities and Stockholders' Equity
Liabilities:
Reserves for claims $ 38,308,000 $ 39,078,000
Accounts payable and accrued liabilities 12,929,995 15,477,545
Current income taxes payable 374,766 1,336,824
Deferred income taxes, net 2,516,444 893,156
Total liabilities 54,129,205 56,785,525
 
Redeemable Noncontrolling Interest 503,549 493,861
 
 
Stockholders' Equity:

Common stock - no par value (shares authorized 10,000,000; 2,045,968 and 2,043,359 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively, excluding 291,676 shares for 2013 and 2012 of common stock held by the Company's subsidiary)

1 1
Retained earnings 109,125,314 105,820,459
Accumulated other comprehensive income 10,377,980 8,818,430
Total stockholders' equity 119,503,295 114,638,890
 
Total Liabilities and Stockholders' Equity $ 174,136,049 $ 171,918,276
 
Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
For the Three Months Ended March 31, 2013 and 2012
(Unaudited)
       
 
 
Three Months Ended
March 31
2013   %   2012   %
Branch $ 5,783,629 24.2 $ 4,822,792 24.5
 
Agency   18,142,368   75.8     14,844,628   75.5
 
Total $ 23,925,997   100.0   $ 19,667,420   100.0

Contact:
Investors Title Company
Elizabeth B. Lewter, 919-968-2200
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