Investors Title Company Announces Second Quarter 2012 Results

Investors Title Company (NASDAQ: ITIC), announced its results for the second quarter ended June 30, 2012. Net income increased 110.0% to $3,349,488, or $1.57 per diluted share, compared with $1,594,805, or $0.74 per diluted share, for the prior year quarter.

Revenues increased 10.0% to $26,080,325 versus the prior year quarter, primarily due to an 8.3% increase in net premiums written. The premium growth reflects widespread volume increases across multiple markets, as overall mortgage activity increased substantially. New industry-wide premium charges for North Carolina that went into effect earlier this year also contributed to the increase in premiums. Premiums in the second quarter related to refinancing transactions declined slightly compared with the first quarter, but were up compared with the prior year quarter.

Operating expenses decreased 1.0% to $21,460,624 versus the prior year quarter, primarily due to decreases in the provision for claims and commissions to agents. The claims provision rate was lower compared with the prior year due to an adjustment for favorable loss development in prior policy years. Commissions to agents decreased 4.8%, as agency premiums declined and the business mix shifted to states with lower average commission rates. These favorable trends helped to offset increased spending on technology and system development.

For the six months ended June 30, 2012, net income increased 82.9% to $4,781,627, or $2.24 per diluted share, compared with $2,614,012, or $1.19 per diluted share, for the prior year period. Revenues increased 10.9% to $48,494,599 as a result of factors noted above, while operating expenses increased 3.9% versus the prior year period.

Chairman J. Allen Fine added, “We are pleased to report a strong quarter, as we benefitted from continued strength in refinance activity, further expansion of our agent base, and favorable claims experience. Our focus remains on enhancing our competitive strengths and capitalizing on opportunities to profitably expand our market presence.”

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 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, 2011, as filed with the Securities and Exchange Commission, and in subsequent filings.
Investors Title Company and Subsidiaries
Consolidated Statements of Income
For the Three and Six Months Ended June 30, 2012 and 2011
(Unaudited)
         
 

Three Months Ended

Six Months Ended
June 30 June 30
2012 2011 2012 2011
Revenues:
Net premiums written $ 23,241,570 $ 21,451,022 $ 42,908,990 $ 39,316,610
Investment income - interest and dividends 1,009,918 878,818 1,987,179 1,778,190
Net realized gain on investments 65,148 147,075 258,029 120,915
Other 1,763,689   1,242,298 3,340,401   2,525,518
Total Revenues 26,080,325   23,719,213 48,494,599   43,741,233
 
Operating Expenses:
Commissions to agents 12,650,817 13,293,828 23,842,944 24,173,414
Provision for claims 361,107 1,229,961 1,992,466 1,951,587
Salaries, employee benefits and payroll taxes 5,489,107 4,639,675 10,479,739 9,331,671
Office occupancy and operations 1,037,835 952,460 1,964,873 1,916,387
Business development 404,718 372,239 798,165 759,786
Filing fees, franchise and local taxes 181,330 118,146 533,252 332,259
Premium and retaliatory taxes 474,486 502,984 889,280 908,457
Professional and contract labor fees 706,690 411,557 1,107,227 720,081
Other 154,534   159,558 321,813   262,579
Total Operating Expenses 21,460,624   21,680,408 41,929,759   40,356,221
 
Income Before Income Taxes 4,619,701   2,038,805 6,564,840   3,385,012
 
Provision For Income Taxes 1,247,000   444,000 1,760,000   771,000
 
Net Income 3,372,701 1,594,805 4,804,840 2,614,012
 
Less: Net Income Attributable to Redeemable Noncontrolling Interests (23,213 ) - (23,213 ) -
 
Net Income Attributable to the Company $ 3,349,488   $ 1,594,805 $ 4,781,627   $ 2,614,012
 
Basic Earnings Per Common Share $ 1.60   $ 0.75 $ 2.28   $ 1.20
 
Weighted Average Shares Outstanding - Basic 2,098,666   2,134,164 2,099,751   2,184,323
 
Diluted Earnings Per Common Share $ 1.57   $ 0.74 $ 2.24   $ 1.19
 
Weighted Average Shares Outstanding - Diluted 2,132,732   2,155,116 2,131,164   2,201,398

       
Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of June 30, 2012 and December 31, 2011
(Unaudited)
   
June 30, 2012 December 31, 2011
Assets:
Investments in securities:
Fixed maturities, available-for-sale, at fair value $ 88,611,642 $ 85,407,365
Equity securities, available-for-sale, at fair value 25,961,611 22,549,975
Short-term investments 8,420,944 14,112,262
Other investments 5,596,960 3,631,714
Total investments 128,591,157 125,701,316
 
Cash and cash equivalents 17,457,651 18,042,258
Premiums and fees receivable, net 8,607,352 6,810,000
Accrued interest and dividends 1,136,981 1,108,156
Prepaid expenses and other assets 4,457,909 2,743,517
Property, net 3,473,408 3,553,216
Current income taxes, net 372,426 -
 
Total Assets $ 164,096,884 $ 157,958,463
 
Liabilities and Stockholders' Equity
Liabilities:
Reserves for claims $ 37,547,000 $ 37,996,000
Accounts payable and accrued liabilities 12,799,616 12,330,383
Current income taxes payable - 640,533
Deferred income taxes, net 1,879,537 479,363
Total liabilities 52,226,153 51,446,279
 
Redeemable Noncontrolling Interest 469,463 -
 
Stockholders' Equity:
Common stock - no par value (shares authorized 10,000,000;
2,099,309 and 2,107,681 shares issued and outstanding as of June 30, 2012 and
December 31, 2011, respectively, excluding 291,676 shares for 2012 and 2011
of common stock held by the Company's subsidiary) 1 1
Retained earnings 103,053,451 99,003,018
Accumulated other comprehensive income 8,347,816 7,509,165
Total stockholders' equity 111,401,268 106,512,184
 
Total Liabilities and Stockholders' Equity $ 164,096,884 $ 157,958,463

 
Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
For the Three and Six Months Ended June 30, 2012 and 2011
(Unaudited)
                   
 
 
Three Months Ended Six Months Ended
June 30 June 30
2012   %   2011   % 2012   %   2011   %
Branch $   6,164,038 26.5 $   3,977,234 18.5 $   10,986,830 25.6 $   7,673,514 19.5
 
Agency     17,077,532   73.5       17,473,788   81.5     31,922,160   74.4       31,643,096   80.5
 
Total $   23,241,570   100.0   $   21,451,022   100.0 $   42,908,990   100.0   $   39,316,610   100.0

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX