Investors Title Company today announced its results for the
second quarter ended June 30, 2015. Net income attributable to the
Company increased 22.1% to $4,120,497, or $2.05 per diluted share,
compared with $3,373,598, or $1.65 per diluted share, for the prior
year quarter.
Revenues increased 6.8% to $35,481,807 versus the prior year
quarter, primarily due to net realized gains on investments and
increases in other revenues. Net premiums written also increased
2.1% to a quarterly record level of $30,464,581, even as a greater
share of our policy volume originated in markets with lower average
premium rates versus the prior year quarter. Real estate activity
was up significantly for the quarter, driven by higher levels of
home purchases and increases in mortgage refinances versus the
prior year quarter.
Operating expenses increased 4.0% to $29,695,310 versus the
prior year quarter, primarily due to an increase in the provision
for claims, stemming from recognition of favorable loss development
in the prior year. The increase in the provision for claims was
partially offset by a decrease in agent commissions, reflecting a
higher proportion of business written in markets with direct
operations. Payroll expenses were up 6.4% to $6,866,632 due to
normal inflationary increases in compensation and benefit costs,
and higher staffing levels to support ongoing software development
activities.
For the six months ended June 30, 2015, net income attributable
to the Company increased 34.1% to $5,846,621, or $2.90 per diluted
share, compared with $4,360,036, or $2.14 per diluted share, for
the prior year period. Revenues increased 3.4% to $63,783,616
versus the prior year period, while operating expenses were
virtually flat at $55,627,995. Results for the first half of the
year have been shaped predominantly by the same factors that
affected the second quarter.
Chairman J. Allen Fine added, “Purchase activity improved
substantially for the first half of 2015 across all of our markets,
driven partly by an increase in the share of first-time buyers, as
well as continuing trends of increases in the rate of existing home
sales and higher levels of home prices. With positive trends in
housing affordability, unemployment, and overall economic
conditions, we are optimistic that recent levels of real estate
activity will continue. Over the long term, we remain focused on
enhancing our competitive strengths and profitably expanding our
market presence.”
Investors Title Company’s subsidiaries issue and underwrite
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 others, any statements regarding future home price increases,
changes in home purchase or refinance activity, interest rate
changes, expansion of the Company’s market presence, enhancing
competitive strengths, positive developments 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 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, 2014, 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, 2015 and 2014
Three Months Ended
June 30,
Six Months Ended
June 30,
2015 2014
2015 2014
Revenues: Net premiums written
$
30,464,581 $ 29,849,853
$ 55,426,622 $
54,759,105 Investment income - interest and dividends
1,131,487 1,039,435
2,309,526 2,065,851 Net realized
gain on investments
925,164 92,082
939,967 584,219
Other
2,960,575 2,240,183
5,107,501 4,266,452 Total Revenues
35,481,807 33,221,553
63,783,616 61,675,627
Operating Expenses: Commissions to agents
16,898,691
18,346,381
31,495,230 33,802,659 Provision for claims
2,130,810 294,281
2,917,422 2,669,664 Salaries,
employee benefits and payroll taxes
6,866,632 6,454,930
14,144,081 12,640,691 Office occupancy and operations
1,443,297 1,246,644
2,747,518 2,426,971 Business
development
578,194 511,763
1,065,169 1,029,657
Filing fees, franchise and local taxes
221,098 225,343
437,741 414,943 Premium and retaliatory taxes
634,747
546,091
1,111,338 840,565 Professional and contract labor
fees
680,483 666,909
1,264,590 1,354,967 Other
241,358 250,167
444,906
459,951 Total Operating Expenses
29,695,310 28,542,509
55,627,995 55,640,068
Income
before Income Taxes 5,786,497 4,679,044
8,155,621
6,035,559
Provision for Income Taxes 1,666,000
1,281,000
2,309,000
1,652,000
Net Income 4,120,497
3,398,044
5,846,621 4,383,559
Net Income
Attributable to Redeemable Noncontrolling Interest —
(24,446 )
— (23,523 )
Net Income Attributable to the Company $
4,120,497 $ 3,373,598
$
5,846,621 $ 4,360,036
Basic
Earnings per Common Share $ 2.06 $
1.66
$ 2.91 $ 2.14
Weighted Average Shares Outstanding – Basic
2,004,698 2,034,931
2,008,718 2,036,047
Diluted
Earnings per Common Share $ 2.05 $
1.65
$ 2.90 $ 2.14
Weighted Average Shares Outstanding – Diluted
2,009,495 2,039,202
2,013,878 2,041,268
Investors Title Company and
Subsidiaries
Consolidated Balance Sheets
As of June 30, 2015 and December
31, 2014
(Unaudited)
June 30, 2015 December 31,2014
Assets: Investments in securities: Fixed maturities,
available-for-sale, at fair value
$ 101,686,777 $
109,048,290 Equity securities, available-for-sale, at fair value
38,237,742 39,254,981 Short-term investments
8,588,140 2,576,993 Other investments
8,397,014
8,530,929 Total investments
156,909,673
159,411,193 Cash and cash equivalents
18,823,257 15,826,515 Premium and fees receivable
9,380,604 8,544,183 Accrued interest and dividends
1,039,031 1,063,837 Prepaid expenses and other assets
7,925,283 7,732,677 Property, net
6,121,707
5,460,805
Total Assets $ 200,199,555
$ 198,039,210
Liabilities and Stockholders’
Equity Liabilities: Reserves for claims
$
38,125,000 $ 36,677,000 Accounts payable and accrued
liabilities
16,900,157 18,290,819 Current income taxes
payable
423,908 92,192 Deferred income taxes, net
5,091,797 5,415,493 Total liabilities
60,540,862 60,475,504
Stockholders’
Equity:
Common stock - no par value (10,000,000
authorized shares; 2,001,030 and 2,023,270
shares issued and outstanding 2015
and 2014, respectively, excluding 291,676 shares for
2015 and 2014 of common stock held
by the Company's subsidiary)
1 1 Retained earnings
128,634,895 124,707,196
Accumulated other comprehensive income
11,023,797
12,856,509 Total stockholders’ equity
139,658,693
137,563,706
Total Liabilities and Stockholders’
Equity $ 200,199,555 $ 198,039,210
Investors Title Company and
Subsidiaries
Net Premiums Written By Branch and
Agency
For the Three and Six Months Ended June
30, 2015 and 2014
Three Months Ended June 30, Six
Months Ended June 30, 2015 % 2014 %
2015 % 2014 %
Branch $ 7,707,773 25.3 $
6,275,362 21.0
$ 13,313,537 24.0
$ 11,107,041 20.3
Agency 22,756,808
74.7 23,574,491 79.0
42,113,085 76.0 43,652,064
79.7
Total $ 30,464,581
100.0 $ 29,849,853 100.0
$ 55,426,622 100.0 $
54,759,105 100.0
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version on businesswire.com: http://www.businesswire.com/news/home/20150805005255/en/
Investors Title CompanyElizabeth B. Lewter, 919-968-2200
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