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Investors Title Company (NASDAQ: ITIC) today announced its results for the quarter ended March 31, 2012. The Company reported net income of $1,432,139, or $0.67 per diluted share, compared with $1,019,207, or $0.46 per diluted share, for the prior year period.
Total revenues increased 11.9% versus the prior year period to $22,414,274, primarily due to a 10.1% increase in net premiums written. Historically low interest rates drove a substantial increase in refinance activity versus the prior year period. Purchase activity was up as well, although to a lesser extent. New industry-wide premium charges for North Carolina that went into effect during the quarter also contributed to growth in premium revenue.
Total expenses increased 9.6% versus the prior year period, primarily due to increases in variable expenses such as commissions and the provision for claims, which fluctuate with premium volumes. The provision for claims as a percentage of net premiums written was 8.3% versus 4.0% in the prior year period due to an increase in volume in states with a higher average loss ratio, and an abnormally low claims expense in the prior year period. In addition, the Company continues to benefit from long-term reductions in operating expenses such as occupancy and operating costs in its branches due to an emphasis on expense control over the past few years.
Chairman J. Allen Fine added, “We are pleased with the uptick in mortgage lending activity and our first quarter results. Operating expenses were largely in line with recent quarterly trends adjusting for the improvement in activity levels, although we expect them to trend higher as we increase our investment in a number of software development initiatives. Our balance sheet remains very strong, and we continue to focus on long-term opportunities to enhance our competitive strengths and market presence.”
Investors Title Company is engaged through its subsidiaries in the business of issuing and underwriting title insurance policies. The Company also provides investment management services to individuals, companies, banks and trusts, as well as services in connection with tax-deferred exchanges of like-kind property.