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Investors Title Company announced its results for the second quarter ended June 30, 2013. Net income attributable to the Company increased 19.6% to $4,005,675, or $1.92 per diluted share, compared with $3,349,488, or $1.57 per diluted share, for the prior year quarter.
Revenues increased 29.2% to $33,693,400 versus the prior year quarter, primarily due to a 30.9% increase in net premiums written. The premium growth reflects substantially higher levels of purchase transactions, as well as increases in average home values in many parts of the nation, driven by improvements in the overall economy. Refinance volume was also up slightly as interest rates remained near historically low levels.
Operating expenses increased 29.6% to $27,823,350 versus the prior year quarter, primarily due to increases in agent commissions and other variable expenses which fluctuate with premium volumes. Claims expense was higher than the prior year quarter, but both periods were abnormally low due to adjustments for favorable loss development. Favorable claims expense trends are also impacted by the absence of large fraud-related claims in recent years, as well as an increase in business in states with historically lower loss provision rates. The increase in payroll expense was largely driven by higher staffing levels to support ongoing software development initiatives.
For the six months ended June 30, 2013, net income attributable to the Company increased 54.4% to $7,382,405, or $3.54 per diluted share, compared with $4,781,627, or $2.24 per diluted share, for the prior year period. Revenues increased 24.8% to $60,541,673 and operating expenses increased 19.1% to $49,920,205 versus the prior year period. Results for the first half of the year have been shaped predominantly by the same factors that affected the second quarter.
Chairman J. Allen Fine added, “After a lengthy period of sluggishness in the economy, we are pleased to see the recent increase in home sales, as well as a developing trend of overall increases in real estate prices. Both of these factors, coupled with an active mortgage refinance market, contributed to all-time high revenue for the second quarter. With housing affordability still favorable and consumer confidence improving, we are optimistic that recent trends in home sales will continue. Over the long term, we remain focused on enhancing our competitive strengths and capitalizing on opportunities to profitably expand our market presence.”