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Investors Title Company (NASDAQ: ITIC), today announced its results for the fourth quarter and year ended December 31, 2012. For the quarter, net income increased 68.3% to $3,162,684, or $1.51 per diluted share, compared with $1,879,459, or $0.88 per diluted share, for the prior year period. For the year, net income increased 60.1% to $11,102,496, or $5.24 per diluted share, compared with $6,933,936, or $3.20 per diluted share, for the prior year period.
The increase in net income for the quarter and the year was driven primarily by increases in premium volumes, reflecting widespread increases in overall mortgage lending activity. New premium charges and rate increases in a number of our markets also contributed to the increase.
For the quarter, premium volumes increased 66.8%. Operating expenses increased 62.4% versus the prior year period, primarily due to increases in commissions to agents, claims, and payroll expense. Commissions to agents increased commensurate with the increase in agency premiums. The claims provision rate as a percentage of net premiums written tracked favorably to the long-term trend, and was virtually flat for the quarter compared with the prior year quarter. The increase in payroll expense was primarily driven by an increase in staffing levels in software development.
For the year, revenues increased 26.9% over the prior year to $115,079,092, due to high levels of overall mortgage activity, and new premium charges and rate increases. Operating expenses followed the trend for the quarter, increasing 21.9%.
Chairman J. Allen Fine added, “We are pleased to report record levels of revenue and earnings per share for 2012. A favorable interest rate environment led to high levels of mortgage lending across the industry, with increases in both purchase and refinance activity versus the prior year. In addition, we benefitted from ongoing expansion of our agent base and targeted entry into new markets. Our balance sheet and financial condition remain strong, as total assets reached an all-time high of $171.9 million as of year-end. In the coming year, we will continue to emphasize the expansion of our agency base and operational efficiency.”