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
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