Investors Title (NASDAQ:ITIC)
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J. Allen Fine, Chairman of Investors Title Company (NASDAQ: ITIC),
announced that for the quarter ended March 31, 2007, the Company
reported net income of $2,322,214, a decrease of 19% compared with
$2,874,941 for the prior year period. Net income per diluted share
equaled $0.92, a decrease of 17% compared with $1.11 per diluted share
in the same period last year. Net premiums written increased 1% to
$16,792,542 and revenues increased 1% to $20,333,769 compared with the
prior year period.
Revenues slightly exceeded the prior year period primarily due to an
increase in investment income and to a lesser extent, an increase in net
premiums written. Income in the exchange segment also increased
principally due to an increase in interest earned on exchange funds.
Profit margins and net income declined due to a decrease in the net
realized gain on sales of investments and a 6% increase in operating
expenses. The increase in operating expenses was primarily the result of
an increase in commissions to agents due to an increase in agent
premiums. Also contributing to the increase in operating expenses was a
small overall increase in salaries and employee benefits.
Chairman Fine added, “Overall, we are pleased
with our results for the quarter, which is typically a seasonally slow
period of the year. We remain focused on identifying opportunities to
extend our distribution base, operate more efficiently and expand our
business lines.”
Investors Title Company is engaged through its subsidiaries in the
business of issuing and underwriting title insurance policies. The
Company also provides services in connection with tax-deferred exchanges
of like-kind property and investment management services to individuals,
companies, banks and trusts.
Certain statements contained herein may constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include any predictions regarding
activity in the U.S. real estate market. These statements involve a
number of risks and uncertainties that could cause actual results to
differ materially from anticipated and historical results. For more
details on risk, uncertainties and other factors that could affect
expectations, refer to the Company’s Annual
Report on Form 10-K for the year ended December 31, 2006, as filed with
the Securities and Exchange Commission.
Investors Title Company and Subsidiaries
Consolidated Statements of Income
March 31, 2007 and 2006
(Unaudited)
For The Three
Months Ended
March 31
2007
2006
Revenues:
Underwriting income:
Premiums Written
$
16,874,977
$
16,746,269
Less-premiums for reinsurance ceded
82,435
114,643
Net premiums written
16,792,542
16,631,626
Investment income-interest and dividends
1,209,607
994,054
Net realized gain on sales of investments
166,180
561,647
Exchange services revenue
1,245,479
1,027,732
Other
919,961
963,789
Total Revenues
20,333,769
20,178,848
Operating Expenses:
Commissions to agents
6,845,288
6,283,396
Provision for claims
1,809,433
1,855,279
Salaries, employee benefits and payroll taxes
5,274,375
5,005,847
Office occupancy and operations
1,436,123
1,465,313
Business development
523,182
505,658
Filing fees and taxes, other than payroll and income
165,213
150,858
Premium and retaliatory taxes
441,920
342,068
Professional and contract labor fees
645,010
587,622
Other
222,011
218,866
`
Total Operating Expenses
17,362,555
16,414,907
Income Before Income Taxes
2,971,214
3,763,941
Provision For Income Taxes
649,000
889,000
Net Income
$
2,322,214
$
2,874,941
Basic Earnings Per Common Share
$
0.93
$
1.13
Weighted Average Shares Outstanding - Basic
2,499,035
2,549,070
Diluted Earnings Per Common Share
$
0.92
$
1.11
Weighted Average Shares Outstanding - Diluted
2,535,858
2,586,465
Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of March 31, 2007 and December 31, 2006
(Unaudited)
March 31,
2007
Dec. 31, 2006
Assets
Investments in securities:
Fixed maturities:
Held-to-maturity, at amortized cost
$
1,193,959
$
1,195,617
Available-for-sale, at fair value
104,236,975
101,954,292
Equity securities, available-for-sale at fair value
12,677,136
12,495,923
Short-term investments
2,122,879
4,460,911
Other investments
1,623,036
1,473,303
Total investments
121,853,985
121,580,046
Cash and cash equivalents
3,414,489
3,458,432
Premiums and fees receivable, net
6,792,739
6,693,706
Accrued interest and dividends
1,204,662
1,336,790
Prepaid expenses and other assets
1,692,953
1,479,366
Property acquired in settlement of claims
303,538
303,538
Property, net
5,910,789
6,134,304
Deferred income taxes, net
2,308,436
2,530,196
Total Assets
$
143,481,591
$
143,516,378
Liabilities and Stockholders' Equity
Liabilities:
Reserves for claims
$
37,133,000
$
36,906,000
Accounts payable and accrued liabilities
9,522,465
10,537,992
Commissions and reinsurance payables
242,617
470,468
Current income taxes payable
333,704
326,255
Total liabilities
47,231,786
48,240,715
Stockholders' Equity:
Common stock - no par value (shares authorized 10,000,000; 2,486,352
and 2,507,325 shares issued and outstanding 2007 and 2006,
respectively, excluding 291,676 shares for 2007 and 2006 of common
stock held by the Company's subsidiary)
1
1
Retained earnings
93,213,418
92,134,608
Accumulated other comprehensive income
3,036,386
3,141,054
Total stockholders' equity
96,249,805
95,275,663
Total Liabilities and Stockholders' Equity
$
143,481,591
$
143,516,378
Investors Title Company and Subsidiaries
Net Premiums Written By State
For the Three Months Ended March 31, 2007 and 2006
(Unaudited)
2007
2006
Alabama
$
139,360
$
243,636
Florida
828,547
278,335
Illinois
388,957
247,895
Kentucky
549,690
573,498
Maryland
286,871
373,769
Michigan
779,325
877,309
Minnesota
118,682
337,169
Mississippi
263,842
134,452
Nebraska
173,324
134,310
New York
506,759
503,596
North Carolina
7,913,473
8,441,482
Pennsylvania
326,654
315,912
South Carolina
1,716,400
1,402,073
Tennessee
649,390
666,323
Virginia
1,560,504
1,674,103
West Virginia
467,925
455,418
Other States
198,344
80,563
Direct Premiums
16,868,047
16,739,843
Reinsurance Assumed
6,930
6,426
Reinsurance Ceded
(82,435)
(114,643)
Net Premiums Written
$
16,792,542
$
16,631,626
Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
March 31, 2007 and 2006
(Unaudited)
For The Three Months Ended
March 31
2007
%
2006
%
Branch
$
7,133,311
42
$
7,727,025
46
Agency
9,659,231
58
8,904,601
54
Total
$
16,792,542
100
$
16,631,626
100