Investors Title Company today announced its results for the fourth
quarter and year ended December 31, 2013. For the year, net income
attributable to the Company increased 32.5% to $14,708,210, or $7.08 per
diluted share, versus $11,102,496, or $5.24 per diluted share, for the
prior year. For the quarter, net income attributable to the Company
decreased 42.8% to $1,810,007, or $0.88 per diluted share, versus
$3,162,684, or $1.51 per diluted share, for the prior year period.
Revenues for the year increased 9.7% to $126,251,497, primarily due to
an increase in premium volume. As the overall economy continued to
improve, premiums grew along with higher levels of real estate purchase
activity and higher home prices across most of our markets. Rising
interest rates however, led to a significant drop in the level of
refinance transactions insured over the course of the year. Operating
expenses increased 5.8% to $104,708,759 versus the prior year, mostly
due to increases in volume-driven expenses such as commissions to agents
and premium taxes. The provision for claims includes a reduction in the
reserve of approximately $2,200,000, reflecting a change in estimate
related to certain actuarial assumptions stemming from improved claims
experience in recent post-recession policy years. In addition to the
change in estimate, claims experience for several recent policy years
continued to emerge favorably in comparison with prior period
expectations, resulting in further reductions to the claims provision.
The increase in payroll expense was largely driven by higher staffing
levels to support ongoing software development activities, and increases
in incentive compensation and benefit costs.
Revenues for the quarter decreased 6.4% to $32,104,585 versus the prior
year period, primarily due to a 4.3% decrease in net premiums written,
as the mid-year interest rate increase negatively impacted mortgage loan
refinance activity. Lower investment gains also contributed to the
revenue decrease. Operating expenses remained virtually flat as the
decline in commission paid to agents was partially offset by a slightly
higher claims expense versus the prior year quarter.
Chairman J. Allen Fine added, “We are pleased to report record levels of
revenue and net income for 2013. Although refinance activity slowed from
the prior year, an improving economy and strength in a number of our
core markets led to a substantial increase in purchase-driven volume. In
addition, we continue to benefit from favorable claims experience,
driven by a combination of factors including a decline in foreclosures
and internal risk management efforts. Our balance sheet and financial
condition remain strong, as total assets reached an all-time high of
$188.3 million. As the U.S. housing recovery continues we plan to
continue to focus on enhancing our competitive strengths and
capitalizing on opportunities to profitably expand our market presence.”
Investors Title Company is engaged through its subsidiaries in the
business of issuing and underwriting 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 expansion of the Company’s market presence,
enhancing competitive strengths or 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; 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,
2012, 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, 2013 and
2012
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
2013
|
|
|
|
2012
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written
|
|
$
|
29,098,948
|
|
|
$
|
30,403,989
|
|
$
|
113,886,266
|
|
|
$
|
102,331,102
|
|
Investment income - interest and dividends
|
|
|
1,058,738
|
|
|
|
1,030,659
|
|
|
3,894,608
|
|
|
|
3,980,411
|
|
Net realized (loss) gain on investments
|
|
|
(137,754
|
)
|
|
|
708,420
|
|
|
195,800
|
|
|
|
1,066,239
|
|
Other
|
|
|
2,084,653
|
|
|
|
2,164,017
|
|
|
8,274,823
|
|
|
|
7,701,340
|
|
Total Revenues
|
|
|
32,104,585
|
|
|
|
34,307,085
|
|
|
126,251,497
|
|
|
|
115,079,092
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions to agents
|
|
|
17,909,893
|
|
|
|
18,743,705
|
|
|
67,150,810
|
|
|
|
59,427,070
|
|
Provision (benefit) for claims
|
|
|
1,857,693
|
|
|
|
1,647,592
|
|
|
(571,596
|
)
|
|
|
6,072,115
|
|
Salaries, employee benefits and payroll taxes
|
|
|
5,852,541
|
|
|
|
5,800,901
|
|
|
25,386,511
|
|
|
|
21,881,540
|
|
Office occupancy and operations
|
|
|
1,164,108
|
|
|
|
1,037,774
|
|
|
4,430,220
|
|
|
|
3,994,244
|
|
Business development
|
|
|
658,004
|
|
|
|
602,157
|
|
|
2,145,639
|
|
|
|
1,856,848
|
|
Filing fees, franchise and local taxes
|
|
|
171,042
|
|
|
|
172,176
|
|
|
681,935
|
|
|
|
846,168
|
|
Premium and retaliatory taxes
|
|
|
994,463
|
|
|
|
572,854
|
|
|
2,558,227
|
|
|
|
1,885,760
|
|
Professional and contract labor fees
|
|
|
656,857
|
|
|
|
799,476
|
|
|
2,171,606
|
|
|
|
2,420,387
|
|
Other
|
|
|
195,237
|
|
|
|
133,298
|
|
|
755,407
|
|
|
|
615,053
|
|
Total Operating Expenses
|
|
|
29,459,838
|
|
|
|
29,509,933
|
|
|
104,708,759
|
|
|
|
98,999,185
|
|
Income Before Income Taxes
|
|
|
2,644,747
|
|
|
|
4,797,152
|
|
|
21,542,738
|
|
|
|
16,079,907
|
|
Provision For Income Taxes
|
|
|
802,000
|
|
|
|
1,650,000
|
|
|
6,746,000
|
|
|
|
4,889,000
|
|
Net Income
|
|
|
1,842,747
|
|
|
|
3,147,152
|
|
|
14,796,738
|
|
|
|
11,190,907
|
|
Net (Income) Loss Attributable to Redeemable Noncontrolling
Interest
|
|
|
(32,740
|
)
|
|
|
15,532
|
|
|
(88,528
|
)
|
|
|
(88,411
|
)
|
Net Income Attributable to the Company
|
|
$
|
1,810,007
|
|
|
$
|
3,162,684
|
|
$
|
14,708,210
|
|
|
$
|
11,102,496
|
|
Basic Earnings Per Common Share
|
|
$
|
0.88
|
|
|
$
|
1.54
|
|
$
|
7.15
|
|
|
$
|
5.33
|
|
Weighted Average Shares Outstanding - Basic
|
|
|
2,046,998
|
|
|
|
2,055,703
|
|
|
2,056,169
|
|
|
|
2,081,703
|
|
Diluted Earnings Per Common Share
|
|
$
|
0.88
|
|
|
$
|
1.51
|
|
$
|
7.08
|
|
|
$
|
5.24
|
|
Weighted Average Shares Outstanding - Diluted
|
|
|
2,053,567
|
|
|
|
2,093,538
|
|
|
2,076,628
|
|
|
|
2,116,793
|
|
Investors Title Company and Subsidiaries
|
Consolidated Balance Sheets
|
As of December 31, 2013 and 2012
|
(Unaudited)
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
Assets:
|
|
|
|
|
|
Investments in securities:
|
|
|
|
|
|
Fixed maturities, available-for-sale, at fair value
|
$
|
91,445,413
|
|
$
|
81,936,978
|
Equity securities, available-for-sale, at fair value
|
|
36,144,065
|
|
|
28,510,933
|
Short-term investments
|
|
7,926,373
|
|
|
13,567,648
|
Other investments
|
|
7,247,831
|
|
|
6,763,100
|
Total investments
|
|
142,763,682
|
|
|
130,778,659
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
23,626,761
|
|
|
20,810,018
|
Premiums and fees receivable, net
|
|
8,750,224
|
|
|
11,037,714
|
Accrued interest and dividends
|
|
1,006,698
|
|
|
1,037,447
|
Prepaid expenses and other assets
|
|
7,466,141
|
|
|
4,651,115
|
Property, net
|
|
4,325,538
|
|
|
3,603,323
|
Current income taxes recoverable
|
|
366,772
|
|
|
-
|
|
|
|
|
|
|
Total Assets
|
$
|
188,305,816
|
|
$
|
171,918,276
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Reserves for claims
|
$
|
35,360,000
|
|
$
|
39,078,000
|
Accounts payable and accrued liabilities
|
|
20,324,190
|
|
|
15,477,545
|
Current income taxes payable
|
|
-
|
|
|
1,336,824
|
Deferred income taxes, net
|
|
4,013,983
|
|
|
893,156
|
Total liabilities
|
|
59,698,173
|
|
|
56,785,525
|
|
|
|
|
|
|
Redeemable Noncontrolling Interest
|
|
545,489
|
|
|
493,861
|
|
|
|
|
|
|
Stockholders' Equity:
|
|
|
|
|
|
Common stock - no par value (shares authorized 10,000,000; 2,037,135
and 2,043,359 shares issued and outstanding as of December 31, 2013
and 2012, respectively, excluding 291,676 shares for 2013 and 2012
of common stock held by the Company's subsidiary)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
1
|
Retained earnings
|
|
116,714,749
|
|
|
105,820,459
|
Accumulated other comprehensive income
|
|
11,347,404
|
|
|
8,818,430
|
Total stockholders' equity
|
|
128,062,154
|
|
|
114,638,890
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
$
|
188,305,816
|
|
$
|
171,918,276
|
Investors Title Company and Subsidiaries
|
Net Premiums Written By Branch and Agency
|
For the Three and Twelve Months Ended December 31, 2013 and
2012
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2013
|
|
%
|
|
|
2012
|
|
%
|
|
|
|
2013
|
|
%
|
|
|
2012
|
|
%
|
Branch
|
|
$
|
5,064,864
|
|
17.4
|
|
$
|
6,216,397
|
|
20.4
|
|
|
$
|
24,811,602
|
|
21.8
|
|
$
|
23,762,885
|
|
23.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agency
|
|
|
24,034,084
|
|
82.6
|
|
|
24,187,592
|
|
79.6
|
|
|
|
89,074,664
|
|
78.2
|
|
|
78,568,217
|
|
76.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
29,098,948
|
|
100.0
|
|
$
|
30,403,989
|
|
100.0
|
|
|
$
|
113,886,266
|
|
100.0
|
|
$
|
102,331,102
|
|
100.0
|
Copyright Business Wire 2014