Investors Title Company today announced its results for the quarter ended March 31, 2011. The Company reported net income of $1,019,207, or $0.46 per diluted share, compared with $17,415, or $0.01 per diluted share, for the prior year period.

Total revenues increased 46.2% versus the prior year period to $20,022,020, primarily due to a 51.6% increase in net premiums written. The premium growth is mainly attributable to the Company’s recent expansion into Texas, as well as to an overall increase in purchase transactions insured.

Agent commissions increased 94.3% over the prior year as a result of growth in agency premiums and an increase in agent business from markets with higher premium rates, primarily Texas. Excluding commissions and premium taxes, which fluctuate with the amount of premiums written, operating expenses decreased 5.1% versus the prior year period, mostly due to the reduction in claims expense. Claims expense benefitted from favorable loss development in recent policy years, as well as from a decline in the relative share of North Carolina business as a percentage of the total. Since North Carolina’s premium rates are less than half the national average, the resulting loss ratio for North Carolina business is higher than for our other markets. In addition, the Company continues to benefit from lower occupancy and operating costs in its branch offices.

Chairman J. Allen Fine added, “We are pleased to report an increase in revenues driven by continued expansion of our agent base, as well as a favorable mix of business. Operating expense comparisons remain favorable, driven by positive developments in claims loss rates and the continued impact of cost reduction initiatives from the past several years. Our balance sheet remains very strong, and we continue to focus on enhancing our competitive strengths and market presence.”

Investors Title Company is engaged through its subsidiaries in issuing and underwriting title insurance policies. The Company also provides investment management services to individuals, companies, and 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 activity in the U.S. real estate market, future enhancement of our operational efficiency or agency-based expansion. 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: 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, 2010, 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, 2011 and 2010
(Unaudited)
     
 
Three Months Ended
March 31

2011

2010
Revenues:
Underwriting income:
Premiums Written $ 17,912,286 $ 11,829,821
Less-premiums for reinsurance ceded 46,698   43,519  
Net premiums written 17,865,588 11,786,302
Investment income-interest and dividends 899,372 906,622
Net realized (loss) gain on investments (26,160 ) 25,150
Other 1,283,220   979,337  
Total Revenues 20,022,020   13,697,411  
 
Operating Expenses:
Commissions to agents 10,879,586 5,599,451
Provision for claims 721,626 1,312,404
Salaries, employee benefits and payroll taxes 4,691,996 4,484,312
Office occupancy and operations 963,927 1,088,405
Business development 387,547 274,296
Filing fees, franchise and local taxes 214,113 145,422
Premium and retaliatory taxes 405,473 300,946
Professional and contract labor fees 308,524 365,078
Other 103,021   111,682  
Total Operating Expenses 18,675,813   13,681,996  
 
Income Before Income Taxes 1,346,207   15,415  
 
Provision (Benefit) For Income Taxes 327,000   (2,000 )
 
Net Income $ 1,019,207   $ 17,415  
 
Basic Earnings Per Common Share $ 0.46   $ 0.01  
 
Weighted Average Shares Outstanding - Basic 2,234,480   2,285,134  
 
Diluted Earnings Per Common Share $ 0.46   $ 0.01  
 
Weighted Average Shares Outstanding - Diluted 2,239,500   2,295,164  

Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of March 31, 2011 and December 31, 2010
(Unaudited)
   
March 31, 2011 December 31, 2010
Assets
Investments in securities:
Fixed maturities:
Available-for-sale, at fair value $ 85,418,326 $ 86,033,557
Equity securities, available-for-sale, at fair value 15,595,241 13,872,370
Short-term investments 20,895,922 27,203,550
Other investments 2,746,936 2,888,958
Total investments 124,656,425 129,998,435
 
Cash and cash equivalents 11,599,535 8,117,031
Premiums and fees receivable, net 5,316,144 7,253,786
Accrued interest and dividends 946,078 1,150,602
Prepaid expenses and other assets 2,509,104 2,688,723
Property acquired in settlement of claims 119,938 127,938
Property, net 3,605,828 3,672,317
Current income taxes receivable 378,256 -
Deferred income taxes, net - 476,534
 
Total Assets $ 149,131,308 $ 153,485,366
 
Liabilities and Stockholders' Equity
Liabilities:
Reserves for claims $ 37,722,000 $ 38,198,700
Accounts payable and accrued liabilities 9,659,492 10,301,495
Current income taxes payable - 1,056,356
Deferred income taxes, net 357,932 -
Total liabilities 47,739,424 49,556,551
 
Stockholders' Equity:

Common stock - no par value (shares authorized 10,000,000; 2,156,078 and 2,282,596 shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively, excluding 291,676 shares for 2011 and 2010 of common stock held by the Company's subsidiary)
1 1
Retained earnings 95,233,547 98,240,109
Accumulated other comprehensive income 6,158,336 5,688,705
Total stockholders' equity 101,391,884 103,928,815
 
Total Liabilities and Stockholders' Equity $ 149,131,308 $ 153,485,366

Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
For the Three Months Ended March 31, 2011 and 2010
(Unaudited)
         
 
 
Three Months Ended
March 31
  2011   %     2010   %
Branch $ 3,696,280 20.7 $ 3,749,800 31.8
 
Agency   14,169,308   79.3     8,036,502   68.2
 
Total $ 17,865,588   100.0   $ 11,786,302   100.0

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