Investors Title Company Announces Fourth Quarter and Fiscal Year 2009 Results
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.
Elizabeth B. Lewter, 919-968-2200
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