Investors Title Company (NASDAQ: ITIC) today announced its
results for the third quarter ended September 30, 2017. Net income
attributable to the Company was $5.9 million, or $3.13 per diluted
share, versus $8.1 million, or $4.29 per diluted share, for the
prior year period. The Company set an all-time quarterly record for
revenues and net premiums written. In addition, earnings for the
current quarter were the second highest in the Company’s
history.
Revenues increased 5.2% to $43.1 million, compared with $41.0
million in the prior year quarter. Net premiums written increased
1.0%, primarily due to a higher level of purchase transactions,
business from new agencies, and higher average real estate values,
partially offset by a decrease in the level of refinance activity.
Other income sources, including revenue from ancillary services
coincident with providing title insurance, increased 49.7% to $4.6
million.
Operating expenses increased 15.5% versus the prior year
quarter, mainly as a result of increases in the provision for
claims stemming from recognition of favorable loss development in
the prior year quarter that did not repeat in the current year
quarter. In addition, the inclusion of expenses for a title
insurance agency acquired in the fourth quarter of 2016 contributed
to the higher level of expenses. Excluding these two factors, most
expense categories were largely in line with the prior year
period.
For the nine months ended September 30, 2017, net income
attributable to the Company increased 11.1% to $16.1 million, or
$8.48 per diluted share, versus $14.5 million, or $7.53 per diluted
share, for the prior year period. Revenues increased 21.4% to
$121.1 million, from increases in premiums written due to higher
transaction volumes, higher real estate values, and from increases
in other income sources. Operating expenses increased 22.9% to
$97.4 million, mainly due to the same factors that affected the
third quarter.
Chairman J. Allen Fine added, “We are pleased to report another
quarter of solid operating results. Against the backdrop of
historically low interest rates and a strengthening economy, strong
transaction volumes in our core markets, coupled with higher home
prices and new agency distribution, resulted in the highest
quarterly revenue level in the Company’s history.
Investors Title Company’s subsidiaries issue and underwrite
title insurance policies. The Company also provides investment
management services and services in connection with tax-deferred
exchanges of like-kind property.
Certain statements contained herein constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include, among others, any
statements regarding the Company’s expected performance for the
year, future home price fluctuations, changes in home purchase or
refinance activity and the mix thereof, interest rate changes,
expansion of the Company’s market presence, enhancing competitive
strengths, positive development 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; loss of agency
relationships, or significant reductions in agent-originated
business; difficulties managing growth, whether organic or through
acquisitions 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, 2016, 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 Nine Months Ended
September 30, 2017 and 2016
(Unaudited)
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2017 2016
2017
2016
Revenues: Net
premiums written
$ 36,612,558 $ 36,306,522
$
102,918,454 $ 87,357,972 Investment income
– interest
and dividends
1,087,054 1,160,983
3,297,634 3,478,999
Net realized gain on investments
803,938 439,326
990,118 574,328 Other
4,633,915
3,094,874
13,864,170
8,280,139 Total Revenues
43,137,465
41,001,705
121,070,376
99,691,438
Operating
Expenses: Commissions to agents
17,641,272 18,739,151
50,569,972 45,946,379 Provision (benefit) for claims
1,854,493 (1,067,853 )
2,714,717 (403,982 ) Salaries,
employee benefits and payroll taxes
9,820,578 8,300,823
29,464,824 22,945,972 Office occupancy and operations
2,309,575 1,496,948
6,445,880 4,526,710 Business
development
639,923 608,532
1,987,028 1,695,180
Filing fees, franchise and local taxes
203,912 191,574
935,476 688,731 Premium and retaliatory taxes
673,126
673,551
1,918,951 1,559,631 Professional and contract labor
fees
447,651 523,504
1,375,291 1,599,603 Other
630,320 157,308
1,944,419 629,539 Total
Operating Expenses
34,220,850
29,623,538
97,356,558
79,187,763
Income before Income Taxes
8,916,615 11,378,167
23,713,818 20,503,675
Provision for Income Taxes 2,990,000
3,249,000
7,647,000
6,040,000
Net Income
5,926,615 8,129,167
16,066,818 14,463,675
Net (Gain) Loss Attributable to Noncontrolling Interests
(158 ) (2,228 )
10,886 6,684
Net
Income Attributable to the Company $ 5,926,457
$ 8,126,939
$
16,077,704 $ 14,470,359
Basic Earnings per Common Share $ 3.14
$ 4.30
$ 8.52
$ 7.55
Weighted Average
Shares Outstanding – Basic 1,887,103
1,888,870
1,886,474
1,915,468
Diluted Earnings per
Common Share $ 3.13 $ 4.29
$ 8.48 $
7.53
Weighted Average Shares Outstanding –
Diluted 1,896,229 1,895,592
1,895,957 1,921,999
Investors Title Company and
Subsidiaries
Consolidated Balance Sheets
As of September 30, 2017 and
December 31, 2016
(Unaudited)
September 30,2017
December 31,2016
Assets: Investments in securities: Fixed
maturities, available-for-sale, at fair value
$
100,730,446 $ 101,934,077 Equity securities,
available-for-sale, at fair value
45,116,461 41,179,259
Short-term investments
20,692,763 6,558,840 Other
investments
11,514,780 11,181,531 Total
investments
178,054,450 160,853,707
Cash and cash equivalents
30,890,785 27,928,472 Premium and
fees receivable
10,260,167 8,654,161 Accrued interest and
dividends
1,323,598 1,035,152 Prepaid expenses and other
assets
9,211,784 9,456,523 Property, net
10,029,847
8,753,466 Goodwill and other intangible assets, net
11,785,945 12,256,641 Current income taxes receivable
1,641,144 —
Total Assets $
253,197,720 $ 228,938,122
Liabilities and Stockholders’ Equity Liabilities:
Reserves for claims
$ 35,207,000 $ 35,305,000
Accounts payable and accrued liabilities
31,462,305
26,146,480 Current income taxes payable
— 1,232,432 Deferred
income taxes, net
14,397,180 11,118,256 Total
liabilities
81,066,485 73,802,168
Stockholders’ Equity:
Common stock – no par value
(10,000,000 authorized shares; 1,887,026 and 1,884,283 shares
issued and outstanding as of September 30, 2017 and December 31,
2016, respectively, excluding in each period 291,676 shares of
common stock held by the Company’s subsidiary)
1 1 Retained earnings
157,675,541 143,283,621
Accumulated other comprehensive income
14,375,694
11,761,447 Total stockholders’ equity attributable to the
Company
172,051,236 155,045,069 Noncontrolling interests
79,999 90,885 Total stockholders’ equity
172,131,235 155,135,954
Total Liabilities
and Stockholders’ Equity $ 253,197,720
$ 228,938,122
Investors Title Company and
Subsidiaries
Net Premiums Written By Branch and
Agency
For the Three and Nine Months Ended
September 30, 2017 and 2016
(Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30, 2017
% 2016 %
2017 % 2016
%
Branch $ 10,871,775
29.7 $ 10,672,619 29.4
$ 30,296,701 29.4
$ 24,303,104 27.8
Agency
25,740,783 70.3
25,633,903 70.6
72,621,753 70.6
63,054,868 72.2
Total $
36,612,558 100.0 $
36,306,522 100.0
$
102,918,454 100.0 $
87,357,972 100.0
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version on businesswire.com: http://www.businesswire.com/news/home/20171102005317/en/
Investors Title CompanyElizabeth B. Lewter, 919-968-2200
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