Landamerica Reports Fourth Quarter & Year 2004 Results

February 18, 2005

Announces Quarterly Dividend

Richmond, Virginia - LandAmerica Financial Group, Inc. (NYSE: LFG) reported operating results for fourth quarter and fiscal year ended December 31, 2004.

Fourth Quarter 2004
Operating revenue $922.6 Million
Net income $30.4 Million
Net income per diluted share $1.70 

Fourth Quarter 2003
Operating revenue $924.4 Million
Net income $24.7 Million
Net income per diluted share $1.32

Year 2004
Operating revenue $3,444.5 Million
Net income $ 146.3 Million
Net income per diluted share $8.01 

Year 2003
Operating revenue $3,345.4 Million
Net income $192.1 Million
Net income per diluted share $10.31

Financial Highlights

  • Operating revenues of $922.6 million for fourth quarter 2004 were in line with fourth quarter 2003. Lower residential revenue volumes were partially offset by the effects of acquisitions and improved revenue from commercial operations.
  • Acquisitions contributed approximately $38.3 million to the operating revenues from our title operations for the fourth quarter of 2004 compared to the fourth quarter of 2003.
  • Title revenue from commercial operations, which the company has typically defined as being premiums from policies providing coverage over $1 million in liability, were a record $209 million for fourth quarter 2004, an increase of 51% over fourth quarter 2003.
  • Revenue from the Lender Services segment for fourth quarter 2004 totaled $38.1 million, compared to $40.2 million for fourth quarter 2003. The decrease in tax and flood zone certification business in fourth quarter 2004 was partially offset by the effects of acquisitions. This revenue was net of deferrals of $7.1 million for fourth quarter 2004 and $5.6 million for fourth quarter 2003.
  • Investment income improved to $21.5 million in fourth quarter 2004 as a result of the purchase of Centennial Bank in November 2003 and an increase in short term interest rates.
  • Operating results in fourth quarter of 2004 were reduced by the previously disclosed title plant write off of $4.1 million ($2.7 million after income taxes) and litigation settlement costs of $9.2 million ($5.9 million after taxes).
  • As previously disclosed, during the fourth quarter of 2004 the Company amended its pension plan to cease future accruals to participants which improved operating results by a $4.8 million ($3.1 million after income taxes) curtailment gain.
  • Cash flow from operations during fourth quarter 2004 was $85.6 million.

“I am pleased that our fourth quarter 2004 net income was better than expected and significantly improved over fourth quarter 2003,” said President and Chief Executive Officer Theodore L. Chandler, Jr. “Our fourth quarter commercial revenue exceeded $200 million for the first time in any quarter in our history. Additionally, we gained advantages from higher interest rates that produced additional investment income. Our focus on cost structure combined with the strong performance of our acquisitions improved our operating margins in the title segment to 8.4 percent for fourth quarter 2004 compared to 7.0 percent for fourth quarter 2003.”

Chandler continued, “At the start of 2004, many predicted that the year would be much tougher than the record-breaking year before. Compared to 2003 levels, interest rates moved higher though still remained at historically low levels throughout the year. Refinance mortgage originations felt the impact of increased rates with 2004 volume declining 50% from 2003 levels. The buy/sell side of the business remained strong, as purchase mortgage origination volume and new and existing home sales all increased in 2004, and we saw an increase in commercial real estate activity.”

“Acquisitions are a core component of our growth strategy. We use strategic acquisitions to achieve greater penetration with all of our services, including traditional title and closing, and as a way to broaden our real estate transaction services offering,” Chandler stated. “During the fourth quarter 2004, we made acquisitions including LoanCare Servicing Center, the tenth largest mortgage subservicer in the United States, and 3 Arch Financial Services Corporation, which expanded our presence in default management services. We’ve invested over $500 million dollars in the last two years buying over 40 companies to make LandAmerica the largest company in the nation focused exclusively on a broad array of real estate transaction services.”

The board of directors has declared a quarterly dividend of $.15 per share payable on March 15, 2005, to shareholders of record on March 1, 2005.

Source: LandAmerica Financial Group, Inc.

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