Investors Title Company Announces Second Quarter 2007 Results
August 7, 2007
CHAPEL HILL, N.C.,-- J. Allen Fine, Chairman of Investors Title Company (NasdaqGM:ITIC), announced that for the second quarter ended June 30, 2007, the Company reported net income of $1,154,149, a decrease of 73.3% compared with $4,315,537 for the same three-month period in 2006. Net income per diluted share equaled $0.46, a decrease of 72.6% compared with $1.68 per diluted share in the same period last year. Net premiums written decreased 2.6% to $18,626,179, investment income increased 22.9% to $1,271,755 and revenues decreased 4.4% to $22,107,533 compared with the prior year period.
For the six-month period ended June 30, 2007, the Company reported net income of $3,476,363, a decrease of 51.7%, compared with $7,190,478 for the same six-month period in 2006. Diluted earnings per share were $1.38, a decrease of 50.5% compared with $2.79 for the same six-month ended period in 2006. Net premiums written decreased 0.9% to $35,418,721, investment income increased 22.3% to $2,481,362 and revenues decreased 2.0% to $42,441,302 compared with the prior year.
Chairman Fine added, ``Net income was significantly impacted by an increase in the provision for claims resulting from the occurrence of two large fraud claims. Revenues in the title segment held up relatively well given ongoing weakness in real estate transaction volume and mortgage originations. The exchange services segment experienced a decline in revenue related to a decrease in demand and interest income earned on exchange funds. Commissions to agents were higher due to an increase in agency premiums.''
``We are pleased to see some relative strength in revenue in our title segment given the soft conditions in the housing market,'' Fine continued, ``and will continue to direct our efforts toward managing operations during a softening period for real estate activity.''
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.
Investors Title Company and Subsidiaries Consolidated Statements of Income June 30, 2007 and 2006
(Unaudited)
| For The Three Months Ended June 30 |
For The Six Months Ended June 30 |
|||
| Revenues: |
2007 |
2006 |
2007 |
2006 |
| Underwriting income: | ||||
| Premiums Written | $18,715,760 | $19,222,175 | $35,590,737 | $35,968,444 |
| Less-premiums for reinsurance ceded | 89,581 | 98,584 | 172,016 | 213,227 |
| ----------- | ---------- | ---------- | ---------- | |
| Net premiums written | 18,626,179 | 19,123,591 |
35,418,721 |
35,755,217 |
| Investment income-interest and dividends | 1,271,755 | 1,034,696 | 2,481,362 | 2,028,750 |
| Net realized gain (loss) on sales of investments | 200,023 | (17,190) | 366,203 | 544,457 |
| Exchange services revenue | 870,083 |
1,908,357 | 2,115,562 | 2,936,089 |
| Other | 1,139,493 | 1,077,167 | 2,059,454 | 2,040,956 |
| ---------- | ---------- | ---------- | ---------- | |
| Total Revenues | 22,107,533 | 23,126,621 |
42,441,302 |
43,305,469 |
| ---------- | ---------- | ---------- | ---------- | |
| Operating Expenses: | ||||
| Commissions to agents | 7,733,004 |
7,289,322 | 14,578,292 | 13,572,718 |
| Provision for claims | 4,352,005 |
2,030,412 |
6,161,438 |
3,885,691 |
| Salaries, employee benefits and payroll taxes | 5,091,139 | 4,917,022 |
10,365,514 |
9,922,869 |
| Office occupancy and operations | 1,452,901 |
1,266,042 | 2,889,024 |
2,731,355 |
| Business development | 556,734 | 547,505 | 1,079,916 | 1,053,163 |
| Filing fees and taxes, other than payroll and income | 293,708 | 126,455 |
142,850 |
291,668 |
| Premium and retaliatory taxes | 670,610 | 395,262 |
328,542 |
837,182 |
| Professional and contract labor fees | 1,325,156 | 826,140 |
737,534 |
1,471,150 |
| Other | 278,744 |
222,885 |
500,755 |
441,751 |
| ---------- | ---------- | ---------- | ---------- | |
| Total Operating | ||||
| Expenses | 20,812,384 |
17,482,114 |
38,174,939 |
33,897,021 |
| ----------- | ----------- | ----------- | ----------- | |
| Income Before Income Taxes | 1,295,149 |
5,644,507 |
4,266,363 |
9,408,448 |
| ----------- | ----------- | ----------- | ----------- | |
| Provision For Income Taxes | 141,000 |
1,328,970 | 790,000 | 2,217,970 |
| ----------- | ----------- | ----------- | ----------- | |
| Net Income | $ 1,154,149 | $ 4,315,537 | $ 3,476,363 | $ 7,190,478 |
| =========== | ---------- | ---------- | ---------- | |
| Basic Earnings Per Common Share | $ 0.46 | $ 1.70 | $ 1.40 | $ 2.83 |
| =========== | =========== | =========== | =========== | |
| Weighted Average Shares Outstanding - Basic | 2,484,874 |
2,537,883 |
2,491,955 |
2,543,475 |
| =========== | =========== | =========== | =========== | |
| Diluted Earnings | ||||
| Per Common Share | $ 0.46 | $ 1.68 | $ 1.38 | $ 2.79 |
| =========== | =========== | =========== | =========== | |
| Weighted Average Shares Outstanding - Diluted | 2,518,206 |
2,572,062 |
2,526,844 |
2,578,743 |
| =========== | =========== | =========== | ========== | |
Investors Title Company and Subsidiaries Consolidated Balance Sheets As of June 30, 2007 and December 31, 2006 (Unaudited)