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Investors Title Company today announced its results for the third quarter ended September 30, 2013. Net income attributable to the Company increased 74.7% to $5,515,798, or $2.66 per diluted share, compared with $3,158,185, or $1.50 per diluted share, for the prior year quarter.
Revenues increased 4.1% to $33,605,239 versus the prior year quarter, primarily due to a 4.9% increase in net premiums written. The premium growth reflects higher levels of purchase transactions, as well as increases in average home values in many parts of the nation, driven by improvement in the overall economy. Refinance volume continued its downward trend, reflecting a rising interest rate environment over the course of 2013.
Operating expenses decreased 8.1% to $25,328,716 versus the prior year quarter due to lower claims expense, partially offset by increases in other expense categories. The provision for claims includes a reduction in the reserves for claims of approximately $2,400,000 reflecting a change in estimate related to certain actuarial assumptions that stems from improved claims experience in recent post-recession policy years. The increase in payroll expense was largely driven by higher staffing levels to support ongoing software development, and increased benefits and incentive compensation. Other operating expenses were higher than the prior year quarter mostly due to volume increases or changes in the mix of business.
For the nine months ended September 30, 2013, net income attributable to the Company increased 62.4% to $12,898,203 or $6.19 per diluted share, compared with $7,939,812, or $3.74 per diluted share, for the prior year period. Revenues increased 16.6% to $94,146,912 and operating expenses increased 8.3% to $75,248,921 versus the prior year period. Results for the first nine months of the year have been shaped predominantly by the same factors that affected the third quarter.
Chairman J. Allen Fine added, “We were pleased to see a continuation in the third quarter of recent increases in the volume of home sales as well as general increases in home prices. Despite moderation in refinance activity, these factors contributed to an all-time high level of revenue for the quarter. Earnings were impacted favorably by changes to actuarial assumptions reflecting improved claims experience in recent years. We continue to focus on enhancing our competitive strengths and capitalizing on opportunities to profitably expand our market presence.”