EX-99.1 3 a4819900ex991.txt PRESS RELEASE Exhibit 99.1 Investors Title Company Announces Annual Earnings CHAPEL HILL, N.C.--(BUSINESS WIRE)--Feb. 10, 2005--Investors Title Company (NASDAQ:ITIC) today announced results for the quarter and year ended December 31, 2004. For the quarter ended December 31, 2004, net income increased 17% to $2,689,303 from $2,305,202, and diluted earnings per share increased 17% to $1.03 from $.88, all compared with the same quarter in the prior year. Net premiums written decreased 4% to $16,809,190 and total revenues remained virtually flat at $19,239,796. For the year ended December 31, 2004, net income decreased 2% to $10,719,166 or $4.09 per diluted share versus net income of $10,965,014 or $4.18 per diluted share in the prior year. Net premiums written decreased 14% to $71,775,157 and total revenues decreased 12% to $79,841,176. J. Allen Fine, Chairman and CEO added: "Despite the decline in premiums written, we are pleased with the financial results achieved in 2004. For the year, mortgage lending held up relatively well, even though mortgage refinancing subsided. According to the latest data published by the Mortgage Bankers Association, mortgage refinancing volume declined by half but mortgage lending for purchase transactions actually increased approximately 24% over the previous year. Net income in the quarter was augmented by continued strong growth in our exchange subsidiary, and a decrease in our tax provision due primarily to an increase in tax exempt income and a reduction in our overall effective tax rate." Investors Title Company is engaged through its subsidiaries in the business of issuing and underwriting title insurance policies. Title insurance is typically sold when real estate is purchased and upon refinancing of loans secured by real estate. Premiums are written through 29 branch offices and a network of agents located across 24 states and the District of Columbia. The Company also provides services in connection with taxfree exchanges of like-kind property as well as investment management services to individuals, trusts, foundations and businesses. Certain statements contained herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from anticipated and historical results. For more details on risks, uncertainties and other factors that could affect expectations, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2003, as filed with the Securities and Exchange Commission. Investors Title Company and Subsidiaries Consolidated Statements of Income December 31, 2004 and 2003 (Unaudited) For The Three Months For The Twelve Months Ended Ended December 31 December 31 ----------------------- ----------------------- 2004 2003 2004 2003 ----------- ----------- ----------- ----------- Revenues: Underwriting income: Premiums Written $16,903,011 $17,600,672 $72,069,796 $84,365,541 Less-premiums for reinsurance ceded 93,821 133,564 294,639 438,229 ----------- ----------- ----------- ----------- Net premiums written 16,809,190 17,467,108 71,775,157 83,927,312 Investment income- interest and dividends 830,323 670,853 2,752,838 2,691,687 Net realized gain on sales of investments 53,989 192,674 93,656 258,718 Exchange services revenue 848,244 371,239 2,801,888 1,245,234 Other 698,050 596,672 2,417,637 2,706,920 ----------- ----------- ----------- ----------- Total 19,239,796 19,298,546 79,841,176 90,829,871 ----------- ----------- ----------- ----------- Operating Expenses: Commissions to agents 6,868,738 7,227,935 29,152,645 39,113,544 Provision for claims 1,844,784 1,822,576 7,984,339 9,292,739 Salaries, employee benefits and payroll taxes 4,084,329 4,248,118 16,303,351 15,644,097 Office occupancy and operations 1,562,878 1,364,840 5,384,398 5,149,386 Business development 575,219 430,329 1,899,315 1,905,609 Taxes, other than payroll and income 111,477 70,726 453,354 347,186 Premium and retaliatory taxes 326,444 333,410 1,406,083 1,680,952 Professional fees 395,160 354,584 1,540,066 1,137,648 Other 76,464 100,071 215,459 387,696 ----------- ----------- ----------- ----------- Total 15,845,493 15,952,589 64,339,010 74,658,857 ----------- ----------- ----------- ----------- Income Before Income Taxes 3,394,303 3,345,957 15,502,166 16,171,014 ----------- ----------- ----------- ----------- Provision For Income Taxes 705,000 1,040,755 4,783,000 5,206,000 ----------- ----------- ----------- ----------- Net Income $ 2,689,303 $ 2,305,202 $10,719,166 $10,965,014 =========== =========== =========== =========== Basic Earnings Per Common Share $ 1.08 $ 0.92 $ 4.29 $ 4.38 =========== =========== =========== =========== Weighted Average Shares Outstanding - Basic 2,484,883 2,503,689 2,496,711 2,503,659 =========== =========== =========== =========== Diluted Earnings Per Common Share $ 1.03 $ 0.88 $ 4.09 $ 4.18 =========== =========== =========== =========== Weighted Average Shares Outstanding - Diluted 2,617,022 2,630,855 2,620,916 2,624,473 =========== =========== =========== =========== Investors Title Company and Subsidiaries Consolidated Balance Sheets As of December 31, 2004 and 2003 (Unaudited) December 31, December 31, 2004 2003 ------------------------------ Assets Cash and cash equivalents $ 4,726,443 $ 5,125,356 Investments in securities: Fixed maturities: Held-to-maturity, at amortized cost 2,202,635 2,481,353 Available-for-sale, at fair value 72,471,766 45,100,520 Equity securities, at fair value 7,240,306 14,556,785 Short term investments 10,134,321 16,747,964 Other investments 1,211,517 955,561 ------------ ------------- Total investments 93,260,545 79,842,183 Premiums receivable, net 6,679,994 8,031,803 Accrued interest and dividends 753,638 667,147 Prepaid expenses and other assets 1,410,584 934,345 Property acquired in settlement of claims 322,517 286,517 Property, net 4,592,784 4,099,243 Deferred income taxes, net 1,440,247 1,485,217 ------------ ------------- Total Assets $113,186,752 $ 100,471,811 ============ ============= Liabilities and Stockholders' Equity Liabilities: Reserves for claims $ 31,842,000 $ 30,031,000 Accounts payable and accrued liabilities 7,919,651 6,243,906 Commissions and reinsurance payables 551,662 726,191 Current income taxes payable 366,168 281,968 ------------ ------------- Total liabilities 40,679,481 37,283,065 ------------ ------------- Stockholders' Equity: Common stock - no par value (shares authorized 10,000,000; 2,481,024 and 2,503,923 shares issued and outstanding 2004 and 2003, respectively, excluding 374,720 and 351,821 shares 2004 and 2003, respectively, of common stock held by the Company's subsidiary) 1 1 Retained earnings 69,272,092 59,756,927 Accumulated other comprehensive income 3,235,178 3,431,818 ------------ ------------- Total stockholders' equity 72,507,271 63,188,746 ------------ ------------- Total Liabilities and Stockholders' Equity $113,186,752 $ 100,471,811 ============ ============= Investors Title Company and Subsidiaries Net Premiums Written By State December 31, 2004 and 2003 (Unaudited) For the Three Months For the Twelve Months Ended Ended December 31 December 31 ----------------------- ----------------------- State 2004 2003 2004 2003 --------------------------------------------- ----------------------- Alabama $ 350,050 $ 272,530 $ 1,361,437 $ 1,286,681 Florida 291,783 285,455 1,190,399 392,602 Illinois 205,655 170,983 948,022 1,219,212 Kentucky 392,093 381,715 1,710,387 1,800,258 Maryland 343,137 344,094 1,494,686 1,707,678 Michigan 1,107,046 891,415 4,896,239 7,230,906 Minnesota 233,323 561,252 1,063,819 2,186,522 Mississippi 231,529 165,564 990,203 1,092,772 Nebraska 174,547 170,647 783,398 1,777,174 New York 794,212 808,829 3,495,587 5,605,642 North Carolina 7,458,691 7,593,504 32,446,835 31,102,294 Pennsylvania 559,103 704,222 2,634,407 5,838,436 South Carolina 1,593,239 2,225,256 6,464,495 7,512,259 Tennessee 620,602 672,280 2,954,957 3,686,677 Virginia 1,857,365 1,796,022 7,038,474 9,101,185 West Virginia 470,672 383,906 1,864,216 2,025,557 Other States 214,001 172,998 726,272 793,455 ----------- ----------- ----------- ----------- Direct Premiums 16,897,048 17,600,672 72,063,833 84,359,310 Reinsurance Assumed 5,963 - 5,963 6,231 Reinsurance Ceded (93,821) (133,564) (294,639) (438,229) ----------- ----------- ----------- ----------- Net Premiums Written $16,809,190 $17,467,108 $71,775,157 $83,927,312 =========== =========== =========== =========== Investors Title Company and Subsidiaries Net Premiums Written By Branch and Agency December 31, 2004 and 2003 (Unaudited) For The Three Months Ended For The Twelve Months Ended December 31 December 31 ------------------------------ -------------------------------- 2004 % 2003 % 2004 % 2003 % ------------------------------ -------------------------------- Branch $7,107,292 42 $7,497,052 43 $31,538,621 44 $31,072,768 37 Agency 9,701,898 58 9,970,056 57 40,236,536 56 52,854,544 63 ------------------------------ -------------------------------- Total $16,809,190 100 $17,467,108 100 $71,775,157 100 $83,927,312 100 ============================== ================================ CONTACT: Investors Title Company Elizabeth B. Lewter, 919-968-2200