Investors Title Company today
announced results for the second quarter ended June 30, 2021. The
Company reported net income of $19.8 million, or $10.42 per diluted
share, compared to $14.5 million, or $7.65 per diluted share, for
the prior year period. The Company set all-time quarterly records
for total revenues, net premiums written and net income.
Revenues for the quarter increased 37.6% to $85.0 million,
compared with $61.7 million for the prior year quarter. Net
premiums written increased 42.2% versus the prior year period, as
lower average interest rates and ongoing economic recovery
continued to drive strong levels of refinance activity and home
sales. Higher transaction volumes drove a 72.8% increase in escrow
and other title-related fees. Non-title services increased 21.9%
due primarily to higher levels of property exchange transaction
volumes and higher income levels from management services. Other
investment income increased $957,000 due to earnings from
partnership investments. Changes in the estimated fair value of
equity security investments resulted in a benefit of $4.8 million,
which was $3.1 million lower than the prior year quarter, as equity
markets continued to rally following the dip from initial impacts
of the COVID-19 pandemic in the prior year period. Other income
increased $4.0 million due to a gain on the sale of property.
Operating expenses increased 36.2%, as commissions to agents
increased commensurate with the increase in agent premium volume.
Notwithstanding higher premium volumes, claims expense decreased
28.0% due to improved incurred claims experience and higher levels
of favorable loss development related to prior policy years.
Personnel costs were 29.9% higher than the prior year period due to
staffing additions in support of strategic growth initiatives and
volume increases. Higher premium volumes and ongoing technology
initiatives drove the increase in other operating expenses.
Income before income taxes increased 41.1% to $25.3 million for
the current quarter versus $17.9 million in the prior year period.
Excluding the impact of changes in the estimated fair value of
equity security investments, income before income taxes (non-GAAP)
increased 105.6% to $20.5 million for the current quarter versus
$10.0 million in the prior year period (see Appendix A for a
reconciliation of this non-GAAP measure to the most directly
comparable GAAP measure).
For the six months ended June 30, 2021, net income increased
$26.1 million to $33.6 million, or $17.70 per diluted share, versus
$7.5 million, or $3.95 per diluted share, for the prior year
period. Revenues increased 71.3% to $157.0 million, versus $91.6
million in the prior year period. Operating expenses increased
39.1% to $114.4 million, mainly due to increases in agent
commissions and personnel expenses. Aside from changes in the
estimated fair value of equity security investments and claims
expense, overall results for the year-to-date period have been
shaped predominantly by the same factors that affected the second
quarter.
Chairman J. Allen Fine added, “We are pleased to announce
another quarter of record operating results for the Company.
Overall, the trends that began last year following the onset of the
pandemic continued to fuel strong demand for housing as well as
high levels of refinance activity. The Company experienced revenue
growth in all of its key markets and across all channels.
“The outlook for real estate activity for the remainder of the
year continues to be generally positive. The pace of existing home
sales has slowed in recent months as prices have continued to rise,
however mortgage interest rates continue to hover near record low
levels, and have offset some of the impact of higher prices. The
economy overall is showing clear signs of recovery amid strong
government stimulus measures, with more than half of the population
receiving vaccinations, more establishments reopening, and
unemployment levels continuing to fall. With these trends in mind,
we believe 2021 will be another record year for the industry.”
Investors Title Company’s subsidiaries issue and underwrite
title insurance policies. The Company also provides investment
management services and services in connection with tax-deferred
exchanges of like-kind property.
Cautionary Statements Regarding
Forward-Looking Statements
Certain statements contained herein constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements may be identified by the use
of words such as “plan,” expect,” “aim,” “believe,” “project,”
“anticipate,” “intend,” “estimate,” “should,” “could,” “would,” and
other expressions that indicate future events and trends. Such
statements include, among others, any statements regarding the
Company’s expected performance for this year, projections regarding
U.S. recovery from the COVID-19 pandemic, future home price
fluctuations, changes in home purchase or refinance demand,
activity and the mix thereof, interest rate changes, expansion of
the Company’s market presence, enhancing competitive strengths,
positive development in housing affordability, wages, unemployment
or overall economic conditions or statements 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 severity
and duration of the COVID-19 pandemic (including any of its
variants) and its effects (and the effects of measures undertaken
to combat it) on the economy and the Company’s business; 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, including
the limited predictive power of historical claims experience;
declines in the performance of the Company’s investments;
government regulations; changes in the economy; changes resulting
from President Biden’s administration and Congress; loss of agency
relationships, or significant reductions in agent-originated
business; difficulties managing growth, whether organic or through
acquisitions 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, 2020 as filed with the Securities and
Exchange Commission, and in subsequent filings.
Investors Title Company and
Subsidiaries
Consolidated Statements of
Operations
For the Three and Six Months
Ended June 30, 2021 and 2020
(in thousands, except per
share amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenues:
Net premiums written
$
67,527
$
47,479
$
129,004
$
86,106
Escrow and other title-related fees
3,487
2,018
6,285
3,860
Non-title services
2,408
1,975
4,486
4,522
Interest and dividends
898
1,105
1,914
2,282
Other investment income
1,483
526
2,424
966
Net realized investment gains
182
553
503
141
Changes in the estimated fair value of
equity security investments
4,829
7,972
8,068
(6,486
)
Other
4,147
120
4,355
258
Total Revenues
84,961
61,748
157,039
91,649
Operating Expenses:
Commissions to agents
34,346
24,089
64,888
44,276
Provision for claims
1,436
1,994
3,027
2,900
Personnel expenses
15,914
12,248
32,067
24,057
Office and technology expenses
3,211
2,457
5,953
4,872
Other expenses
4,766
3,038
8,501
6,151
Total Operating Expenses
59,673
43,826
114,436
82,256
Income before Income Taxes
25,288
17,922
42,603
9,393
Provision for Income Taxes
5,506
3,427
8,998
1,909
Net Income
$
19,782
$
14,495
$
33,605
$
7,484
Basic Earnings per Common Share
$
10.44
$
7.66
$
17.74
$
3.96
Weighted Average Shares Outstanding –
Basic
1,894
1,892
1,894
1,891
Diluted Earnings per Common
Share
$
10.42
$
7.65
$
17.70
$
3.95
Weighted Average Shares Outstanding –
Diluted
1,899
1,895
1,898
1,895
Investors Title Company and Subsidiaries
Consolidated Balance
Sheets
As of June 30, 2021 and
December 31, 2020
(in thousands)
(unaudited)
June 30, 2021
December 31, 2020
Assets
Cash and cash equivalents
$
31,583
$
13,723
Investments:
Fixed maturity securities,
available-for-sale, at fair value
88,982
117,713
Equity securities, at fair value
69,915
64,919
Short-term investments
44,446
15,170
Other investments
15,031
15,493
Total investments
218,374
213,295
Premiums and fees receivable
21,388
19,427
Accrued interest and dividends
850
1,038
Prepaid expenses and other receivables
13,800
9,418
Property, net
15,010
11,160
Goodwill and other intangible assets,
net
9,980
9,771
Operating lease right-of-use assets
3,383
3,533
Other assets
1,767
1,560
Current income taxes receivable
804
—
Total Assets
$
316,939
$
282,925
Liabilities and Stockholders’
Equity
Liabilities:
Reserve for claims
$
35,303
$
33,584
Accounts payable and accrued
liabilities
34,724
36,020
Operating lease liabilities
3,510
3,669
Current income taxes payable
—
638
Deferred income taxes, net
11,464
8,592
Total liabilities
85,001
82,503
Stockholders’ Equity:
Common stock – no par value (10,000
authorized shares; 1,894 and 1,892 shares issued and outstanding as
of June 30, 2021 and December 31, 2020, respectively, excluding in
each period 292 shares of common stock held by the Company's
subsidiary)
—
—
Retained earnings
228,133
196,096
Accumulated other comprehensive income
3,805
4,326
Total stockholders’ equity
231,938
200,422
Total Liabilities and Stockholders’
Equity
$
316,939
$
282,925
Investors Title Company and Subsidiaries
Net Premiums Written By Branch
and Agency
For the Three and Six Months
Ended June 30, 2021 and 2020
(in thousands)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
%
2020
%
2021
%
2020
%
Branch
$
17,048
25.2
$
12,973
27.3
$
34,408
26.7
$
22,868
26.6
Agency
50,479
74.8
34,506
72.7
94,596
73.3
63,238
73.4
Total
$
67,527
100.0
$
47,479
100.0
$
129,004
100.0
$
86,106
100.0
Investors Title Company and Subsidiaries
Appendix A Non-GAAP Measures Reconciliation For the Three and Six
Months Ended June 30, 2021 and 2020 (in thousands)
(unaudited)
Management uses various financial and operational measurements,
including financial information not prepared in accordance with
generally accepted accounting principles ("GAAP"), to analyze
Company performance. This includes adjusting revenues to remove the
impact of changes in the estimated fair value of equity security
investments, which are recognized in net income under GAAP.
Management believes that these measures are useful to evaluate the
Company's internal operational performance from period to period
because they eliminate the effects of external market fluctuations.
The Company also believes users of the financial results would
benefit from having access to such information, and that certain of
the Company’s peers make available similar information. This
information should not be used as a substitute for, or considered
superior to, measures of financial performance prepared in
accordance with GAAP, and may be different from similarly titled
non-GAAP financial measures used by other companies.
The following tables reconcile non-GAAP financial measurements
used by Company management to the comparable measurements using
GAAP:
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenues
Total revenues (GAAP)
$
84,961
$
61,748
$
157,039
$
91,649
(Subtract) Add: Changes in the estimated
fair value of equity security investments
(4,829
)
(7,972
)
(8,068
)
6,486
Adjusted revenues (non-GAAP)
$
80,132
$
53,776
$
148,971
$
98,135
Income before Income Taxes
Income before income taxes (GAAP)
$
25,288
$
17,922
$
42,603
$
9,393
(Subtract) Add: Changes in the estimated
fair value of equity security investments
(4,829
)
(7,972
)
(8,068
)
6,486
Adjusted income before income taxes
(non-GAAP)
$
20,459
$
9,950
$
34,535
$
15,879
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210804005254/en/
Elizabeth B. Lewter Telephone: (919) 968-2200
Grafico Azioni Investors Title (NASDAQ:ITIC)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Investors Title (NASDAQ:ITIC)
Storico
Da Giu 2023 a Giu 2024