EX-99.1 2 a6183020ex991.htm EXHIBIT 99.1

Exhibit 99.1

Investors Title Company Announces Fourth Quarter and Fiscal Year 2009 Results

CHAPEL HILL, N.C.--(BUSINESS WIRE)--February 17, 2010--Investors Title Company today announced its results for the quarter and year ended December 31, 2009. For the fourth quarter, the Company reported net income of $309,300 compared with a net loss of $3,950,277 for the same three-month period ended in 2008. Net income per diluted share equaled $0.14 compared with a net loss per diluted share of $1.72 in the prior year period. Net premiums written increased 1.3% to $12,550,428; other revenue increased 23.5% to $1,157,938; investment income decreased 15.3% to $921,045; and total revenue increased 18.9% to $14,642,575.

Premiums written were in line with the prior year’s quarter as the ongoing low level of interest rates supported purchase transactions and mortgage refinance activity. Total revenue compared favorably primarily due to the investment losses realized in the prior year period.

Operating expenses continued to decline on a sequential quarter basis and compared favorably to the prior year period primarily due to the spike in fraud and mechanic lien claims experienced at the end of 2008. Salary and related expenses trended in line with the preceding quarter; however they compared unfavorably to the prior year period due to a reduction in 2008 incentive compensation.

For the year ended December 31, 2009, the Company reported net income of $4,828,779, compared with a net loss of $1,182,799 for 2008. Diluted income per share was $2.10, compared with a diluted loss per share of $0.50 for 2008. Net premiums written decreased 2.4% to $62,155,251; other revenue increased 6.4% to $4,957,054; investment income decreased 17% to $3,783,116; net realized loss on investments declined 83% to $498,089; and total revenue increased 0.3% to $71,308,160, all compared with the prior year.

Chairman J. Allen Fine added, “In the past year, conditions in the mortgage lending and real estate market continued to negatively affect net premiums written, although this trend was partially offset by the surge in mortgage refinancing which occurred primarily in the first six months. Our claims experience greatly improved from the prior year although the overall level remains elevated from historic averages due to increased mortgage foreclosure activity, which tends to uncover title defects. Commercial real estate and investment property activity remains subdued which has materially impacted the demand for our tax deferred exchange services.

We expect that mortgage lending and real estate market conditions will continue to exert downward pressure on future premiums written levels. Governmental stimulus efforts aimed at boosting home sales and supporting low mortgage interest rates have had a positive effect; however these programs are slated to end within the next few months. Absent further declines in interest rates, which are already at low levels, we anticipate that the elevated pace of mortgage refinance activity will likely recede and return to a more historical percentage of overall loan origination. Consequently, we expect that the health of real estate markets and volume of loan origination will increasingly depend on a growing economy and job creation.

We are closely monitoring the continually evolving operating environment in order to best position the Company during this downturn while being mindful of opportunities to enhance our competitive strengths and market position.”

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. Such risks and uncertainties include, without limitation: 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; mechanic lien claims; 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, 2008, 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 Twelve Months Ended December 31, 2009 and 2008
(Unaudited)
     
 
Three Months Ended
December 31 		Twelve Months Ended
December 31
2009 2008   2009 2008
Revenues:
Underwriting income:
Premiums Written $ 12,587,939 $ 12,444,198 $ 62,250,774 $ 63,937,276
Less-premiums for reinsurance ceded 37,511   55,173   95,523   275,089  
Net premiums written 12,550,428 12,389,025 62,155,251 63,662,187
Investment income-interest and dividends 921,045 1,086,935 3,783,116 4,558,735
Net realized loss on investments (97,329 ) (2,252,790 ) (498,089 ) (2,922,376 )
Exchange services revenue 110,493 152,201 910,828 1,166,141
Other 1,157,938   937,608   4,957,054   4,658,574  
Total Revenues 14,642,575   12,312,979   71,308,160   71,123,261  
 
Operating Expenses:
Commissions to agents 6,052,270 5,740,911 29,254,311 27,717,807
Provision for claims 1,731,724 6,876,805 8,465,123 15,206,637
Salaries, employee benefits and payroll taxes 4,326,490 3,542,233 18,189,483 19,605,500
Office occupancy and operations 1,041,088 1,267,435 4,333,579 5,107,843
Business development 469,748 482,199 1,398,057 2,104,935
Filing fees and taxes, other than payroll and income 24,603 163,123 571,677 587,235
Premium and retaliatory taxes 255,177 251,999 1,268,301 1,281,297
Professional and contract labor fees 379,758 299,724 1,362,706 1,731,550
Other 185,417   234,827   549,144   997,256  
Total Operating Expenses 14,466,275   18,859,256   65,392,381   74,340,060  
 
Income (Loss) Before Income Taxes 176,300   (6,546,277 ) 5,915,779   (3,216,799 )
 
(Benefit) Provision For Income Taxes (133,000 ) (2,596,000 ) 1,087,000   (2,034,000 )
 
Net Income (Loss) $ 309,300   $ (3,950,277 ) $ 4,828,779   $ (1,182,799 )
 
Basic Earnings (Loss) Per Common Share $ 0.14   $ (1.72 ) $ 2.11   $ (0.50 )
 
Weighted Average Shares Outstanding - Basic 2,285,991   2,293,086   2,291,816   2,364,361  
 
Diluted Earnings (Loss) Per Common Share $ 0.14   $ (1.72 ) $ 2.10   $ (0.50 )
 
Weighted Average Shares Outstanding - Diluted 2,288,814   2,293,086   2,299,429   2,364,361  
 
Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2009 and 2008
(Unaudited)
 
December 31, 2009 December 31, 2008
Assets
Investments in securities:
Fixed maturities:
Held-to-maturity, at amortized cost $ 2,000

 

$

451,681
Available-for-sale, at fair value 88,801,186 87,708,500
Equity securities, available-for-sale, at fair value 11,854,301 9,965,297
Short-term investments 20,717,434 15,725,513
Other investments 2,307,220 2,040,962
Total investments 123,682,141 115,891,953
 
Cash and cash equivalents 8,733,221 5,155,046
Premiums and fees receivable, net 5,170,476 4,933,797
Accrued interest and dividends 1,122,806 1,225,070
Prepaid expenses and other assets 1,815,653 3,992,975
Property acquired in settlement of claims 175,476 395,734
Property, net 3,894,724 4,422,318
Deferred income taxes, net 1,833,207 3,841,295
 
Total Assets $ 146,427,704 $ 139,858,188
 
Liabilities and Stockholders' Equity
Liabilities:
Reserves for claims $ 39,490,000 $ 39,238,000
Accounts payable and accrued liabilities 9,008,337 10,762,300
Current income taxes payable 670,290 -
Total liabilities 49,168,627 50,000,300
 
Stockholders' Equity:
Common stock - no par value (shares authorized 10,000,000; 2,285,289 and 2,293,268 shares issued and outstanding 2009 and 2008, respectively, excluding 291,676 shares for 2009 and 2008 of common stock held by the Company's subsidiary)
 
 
1 1
Retained earnings 92,528,818 88,248,452
Accumulated other comprehensive income 4,730,258 1,609,435
Total stockholders' equity 97,259,077 89,857,888
 
Total Liabilities and Stockholders' Equity $ 146,427,704 $ 139,858,188
 
Investors Title Company and Subsidiaries
Net Premiums Written By State
For the Three and Twelve Months Ended December 31, 2009 and 2008
(Unaudited)
 
Three Months Ended Twelve Months Ended
December 31 December 31
State   2009     2008     2009     2008
Illinois $ 543,516 $ 555,933 $ 2,878,781 $ 2,140,440
Kentucky 660,879 563,858 3,194,530 2,957,744
Michigan 628,320 594,403 4,382,209 3,326,904
New York 466,290 435,994 2,825,762 2,106,033
North Carolina 5,276,957 5,505,815 27,134,685 30,527,923
Pennsylvania 589,231 373,473 2,664,037 1,762,444
South Carolina 1,533,763 1,677,829 5,755,790 7,556,153
Tennessee 487,405 343,527 2,416,019 2,063,411
Virginia 1,087,983 1,087,891 5,015,185 5,789,337
West Virginia 509,296 460,496 2,239,908 2,077,603
Other 800,799   775,680   3,732,218   3,462,391  
Direct Premiums $ 12,584,439 $ 12,374,899 $ 62,239,124 $ 63,770,383
Reinsurance Assumed 3,500 69,299 11,650 166,893
Reinsurance Ceded (37,511 ) (55,173 ) (95,523 ) (275,089 )
Net Premiums Written $ 12,550,428   $ 12,389,025   $ 62,155,251   $ 63,662,187  
 
Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
For the Three and Twelve Months Ended December 31, 2009 and 2008
(Unaudited)
           
 
 
Three Months Ended Twelve Months Ended
December 31 December 31
  2009 %   2008 %   2009 %     2008 %
Branch $ 4,093,859 33 $ 4,360,036 35 $ 21,474,082 35

 

$

24,312,013 38
 
Agency   8,456,569 67   8,028,989 65   40,681,169 65   39,350,174 62
 
Total $ 12,550,428 100 $ 12,389,025 100 $ 62,155,251 100

 

$

63,662,187 100

CONTACT:
Investors Title Company
Elizabeth B. Lewter, 919-968-2200