Investors Title Company (NASDAQ:ITIC) today announced its results for the quarter ended March 31, 2014. The Company reported net income of $986,438, or $0.48 per diluted share, compared with $3,376,730, or $1.62 per diluted share, for the prior year period.
The Company achieved record first quarter revenues totaling $28,454,074, an increase of 6.0% versus the prior year period, resulting primarily from increases in premium volumes and realized gains on investments. As the overall economy has continued to improve, higher levels of real estate purchase activity and higher home prices across many of our markets helped drive an increase in premiums during the period. Rising interest rates however, led to a significant drop in refinance activity, which partially offset the increased purchase-related business.
Operating expenses increased 22.6% versus the prior year period, mainly due to increases in variable expenses such as the provision for claims and commissions. Overall, the trend in new claim filings continued to improve. During the first quarter however, the occurrence of a few large claims related to older policy years contributed to the increase in the claims provision. Positive legal developments in several claim matters and a significant recovery in the prior year period also contributed to an unfavorable comparison. Commissions increased at a higher rate than premiums because there was a greater proportion of agent business than in the prior year period. Other operating expenses, as a whole, were largely in line with the prior year quarter.
Chairman J. Allen Fine added, “We are pleased to see increases in the level of home prices as well as continued strength in home purchase activity. As expected, however, the drop in refinance activity had a significant impact on premium volumes for the quarter. Although a few unusual claims matters led to an unfavorable comparison to the prior year, we remain encouraged by the general long-term trend of claims activity.”