U.S. Markets open in 7 hrs 8 mins

Investors Title Company Announces Record First Quarter 2017 Financial Results

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

Investors Title Company (ITIC) today announced its results for the quarter ended March 31, 2017. The Company reported a record first quarter net income attributable to the Company of $4,476,055, or $2.36 per diluted share, compared with $1,814,040, or $0.93 per diluted share, for the prior year period.

Revenues for the quarter increased 52.0% to a new first quarter record of $37.8 million, compared with $24.9 million in the prior year. Net premiums written benefitted from higher transaction volumes, favorable rate changes in certain markets, and rising real estate values. Despite reductions in refinance activity, higher levels of home sales drove an increase in transaction volumes in each of the Company’s primary markets. In addition, premiums benefitted from the Company’s acquisition of University Title in the fourth quarter of 2016. Other revenues increased 44.2%, primarily due to certain non-premium charges which typically fluctuate with net premiums written.

Operating expenses increased 40.7% versus the prior year period, mainly due to increases in agent commissions commensurate with the increase in premium volumes, as well as the inclusion of operating expenses for University Title in the operating results. In addition, payroll expenses increased as a result of higher levels of incentive compensation and normal inflationary increases. The provision for claims was higher in the current quarter primarily due to more favorable claims experience recognized in the prior year period. All other expense categories increased in line with inflation.

Chairman J. Allen Fine commented, “The housing market continues to benefit from an improving economy and relatively favorable interest rates. Record levels of revenues, along with a higher mix of direct business, continuation of favorable claims experience, and stable overhead expenses resulted in the strongest first quarter earnings results in the Company’s history. With the benefit of improving economic conditions and favorable interest rates, we are optimistic that the strong housing market will drive higher levels of home sales throughout the year and in turn support another year of strong performance for Investors Title.”

Investors Title Company’s subsidiaries issue and underwrite title insurance policies. The Company also provides investment management services and services in connection with tax-deferred exchanges of like-kind property.

Certain statements contained herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, among others, any statements regarding the Company’s expected performance for this year, future home price fluctuations, changes in home purchase or refinance activity and the mix thereof, interest rate changes, expansion of the Company’s market presence, enhancing competitive strengths, positive development in housing affordability, unemployment or overall economic conditions or statements regarding our actuarial assumptions and the application of recent historical claims experience to future periods. 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, including the limited predictive power of historical claims experience; declines in the performance of the Company’s investments; government regulation; changes in the economy; loss of agency relationships, or significant reductions in agent-originated business; difficulties managing growth, whether organic or through acquisitions 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, 2016, 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, 2017 and 2016

(Unaudited)

 
Three Months Ended March 31,
2017     2016
Revenues:    
Net premiums written $ 33,641,564 $ 21,508,997
Investment income interest and dividends 1,096,591 1,151,011
Net realized gain on investments 103,339 149,830
Other 2,959,695       2,052,184
Total Revenues 37,801,189       24,862,022
 
Operating Expenses:
Commissions to agents 16,331,110 11,532,882
Provision for claims 719,397 15,959
Salaries, employee benefits and payroll taxes 9,902,271 7,471,951
Office occupancy and operations 1,939,055 1,493,860
Business development 612,947 480,390
Filing fees, franchise and local taxes 153,556 230,054
Premium and retaliatory taxes 645,385 311,831
Professional and contract labor fees 439,176 538,653
Other 607,112       202,981
Total Operating Expenses 31,350,009       22,278,561
 
Income before Income Taxes 6,451,180 2,583,461
 
Provision for Income Taxes 1,985,000       779,000
 
Net Income 4,466,180 1,804,461
 
Net Loss Attributable to Noncontrolling Interests 9,875       9,579
 
Net Income Attributable to the Company $ 4,476,055       $ 1,814,040
 
Basic Earnings per Common Share $ 2.37       $ 0.94
 
Weighted Average Shares Outstanding – Basic 1,885,587       1,934,318
 
Diluted Earnings per Common Share $ 2.36       $ 0.93
 
Weighted Average Shares Outstanding – Diluted 1,894,838       1,940,963
       

Investors Title Company and Subsidiaries

Consolidated Balance Sheets

As of March 31, 2017 and December 31, 2016

(Unaudited)

 
March 31,
2017
    December 31,
2016
Assets:
Investments in securities:
Fixed maturities, available-for-sale, at fair value $ 98,382,799 $ 101,934,077
Equity securities, available-for-sale, at fair value 43,068,433 41,179,259
Short-term investments 13,635,465 6,558,840
Other investments 10,582,877       11,181,531
Total investments 165,669,574       160,853,707
 
Cash and cash equivalents 25,718,050 27,928,472
Premium and fees receivable 8,663,495 8,654,161
Accrued interest and dividends 1,336,998 1,035,152
Prepaid expenses and other assets 10,323,199 9,456,523
Property, net 9,477,362 8,753,466
Goodwill and other intangible assets, net 12,023,053       12,256,641
Total Assets $ 233,211,731       $ 228,938,122
 
Liabilities and Stockholders’ Equity
Liabilities:
Reserves for claims $ 35,445,000 $ 35,305,000
Accounts payable and accrued liabilities 22,577,847 26,146,480
Current income taxes payable 3,479,935 1,232,432
Deferred income taxes, net 11,421,379       11,118,256
Total liabilities 72,924,161       73,802,168
 
Stockholders’ Equity:
Common stock no par value (10,000,000 authorized shares; 1,886,088 and 1,884,283 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively, excluding in each period 291,676 shares of common stock held by the Company's subsidiary) 1 1
Retained earnings 147,405,440 143,283,621
Accumulated other comprehensive income 12,801,119       11,761,447
Total stockholders’ equity attributable to the Company 160,206,560 155,045,069
Noncontrolling interests 81,010       90,885
Total stockholders’ equity 160,287,570       155,135,954
Total Liabilities and Stockholders’ Equity $ 233,211,731       $ 228,938,122
   

Investors Title Company and Subsidiaries

Net Premiums Written By Branch and Agency

For the Three Months Ended March 31, 2017 and 2016

(Unaudited)

 
Three Months Ended March 31,
2017     %     2016     %
Branch $ 9,463,769     28.1     $ 5,477,657     25.5
 
Agency 24,177,795       71.9     16,031,340       74.5
 
Total $ 33,641,564       100.0     $ 21,508,997       100.0

View source version on businesswire.com: http://www.businesswire.com/news/home/20170504005103/en/