Investors Title Company has a market cap of $65.15 million; its shares were traded at around $28.5 with a P/E ratio of 19.13 and P/S ratio of 0.91. The dividend yield of Investors Title Company stocks is 0.98%.ITIC is in the portfolios of Tom Gayner of Markel Gayner Asset Management Corp.
Highlight of Business Operations:Steps taken by the U.S. government to provide economic stimulus during the past year generally had a positive effect on the Company s sales of title insurance. Under the Home Affordable Refinance Program, certain homeowners were able to get refinancing loans. The Economic Stimulus Bill included an $8,000 tax credit available for certain first time home buyers for the purchase of a principal residence on or after January 1, 2009. On July 2, 2010, the President signed a law which extended the first-time homebuyer credit to persons who signed a binding purchase contact by April 30, 2010 and close on the purchase of their residence by September 30, 2010. A similar credit of $6,500 was also extended for homebuyers who have owned their current home at least five years.
For the quarter ended June 30, 2010, net premiums written decreased 27.9% to $13,638,950, investment income decreased 4.6% to $915,852, total revenues decreased 25.0% to $16,218,766, operating expenses decreased 29.5% to $13,216,206 and net income increased 20.0% to $2,537,560, all compared with the same quarter in 2009. Both net income per basic and diluted common share increased 20.7% to $1.11, compared with the same prior year period.
For the six months ended June 30, 2010, net premiums written decreased 28.0% to $25,425,252, investment income decreased 6.5% to $1,822,474, total revenues decreased 25.8% to $29,916,177, operating expenses decreased 24.6% to $26,898,202 and net income decreased 28.0% to $2,554,975, all compared with the same prior year period. Net income per basic common share decreased 27.7% to $1.12 and net income per diluted common share decreased 27.9% to $1.11, compared with the same prior year period.
Other Revenues: Other revenues primarily include investment management fee income, income related to the Company s equity method investments, exchange service revenues, agency service fees, as well as search fee and other ancillary fees. Other revenues were $1,338,184 and $2,317,521 for the three and six month periods ended June 30, 2010, respectively compared with $1,737,722 and $3,320,613 for the three and six month periods ended June 30, 2009. The decline in other revenues for 2010 is primarily due to decreases from equity in earnings of unconsolidated affiliates, exchange service revenues and fees associated with the title segment, partially offset by an increase in management services income.
Investment income decreased 4.6% to $915,852 for the three months ended June 30, 2010, compared with $960,454 in the same period in 2009. For the six months ended June 30, 2010, investment income decreased 6.5% to $1,822,474 compared with $1,950,089 in the same period in 2009. The decline in investment income for the three and six month periods ended June 30, 2010 was due primarily to lower levels of interest earned on short-term funds and the maturity of older securities which yielded higher rates of interest relative to current investments.
Net realized gain on investments was $350,930 for the six month period ended June 30, 2010, compared with a net realized loss of $289,942 for the same period in 2009. The 2010 year-to-date net gain included impairment charges of $45,400 on certain investments in the Company s portfolio that were deemed to be other-than-temporarily impaired, offset by net realized gains on the sales of investments of $396,330. The 2009 year-to-date net loss for the same period included impairment charges of $512,029 on certain investments offset by net realized gains on the sales of investments of $222,087. Management believes unrealized losses on remaining fixed income and equity securities at June 30, 2010 are temporary in nature.
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