Investors Title Company today announced its results for the fourth quarter and year ended December 31, 2013. For the year, net income attributable to the Company increased 32.5% to $14,708,210, or $7.08 per diluted share, versus $11,102,496, or $5.24 per diluted share, for the prior year. For the quarter, net income attributable to the Company decreased 42.8% to $1,810,007, or $0.88 per diluted share, versus $3,162,684, or $1.51 per diluted share, for the prior year period.
Revenues for the year increased 9.7% to $126,251,497, primarily due to an increase in premium volume. As the overall economy continued to improve, premiums grew along with higher levels of real estate purchase activity and higher home prices across most of our markets. Rising interest rates however, led to a significant drop in the level of refinance transactions insured over the course of the year. Operating expenses increased 5.8% to $104,708,759 versus the prior year, mostly due to increases in volume-driven expenses such as commissions to agents and premium taxes. The provision for claims includes a reduction in the reserve of approximately $2,200,000, reflecting a change in estimate related to certain actuarial assumptions stemming from improved claims experience in recent post-recession policy years. In addition to the change in estimate, claims experience for several recent policy years continued to emerge favorably in comparison with prior period expectations, resulting in further reductions to the claims provision. The increase in payroll expense was largely driven by higher staffing levels to support ongoing software development activities, and increases in incentive compensation and benefit costs.
Revenues for the quarter decreased 6.4% to $32,104,585 versus the prior year period, primarily due to a 4.3% decrease in net premiums written, as the mid-year interest rate increase negatively impacted mortgage loan refinance activity. Lower investment gains also contributed to the revenue decrease. Operating expenses remained virtually flat as the decline in commission paid to agents was partially offset by a slightly higher claims expense versus the prior year quarter.
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