CHAPEL HILL, N.C.--(BUSINESS WIRE)--

Investors Title Company today announced its results for the fourth quarter and year ended December 31, 2016.

For the year, net income attributable to the Company increased 55.8% to an all-time record high of $19.5 million, or $10.19 per diluted share, versus $12.5 million, or $6.30 per diluted share, for the prior year. For the quarter, net income attributable to the Company more than doubled to $5.1 million, or $2.67 per diluted share, versus $2.2 million, or $1.12 per diluted share, for the prior year period.

Revenues for the year increased 8.9% to an annual record of $138.5 million, compared with $127.2 million in the prior year. Premiums increased as a result of growth in average real estate values, coupled with growth in transaction volumes stemming from higher levels of home sales and refinance activity. Non-premium revenue sources, which amounted to $16.4 million, were up 11.4% over the prior year.

Operating expenses increased 0.9% to $110.4 million, primarily due to increases in payroll expense and agent commissions, largely offset by lower claims expense. Payroll expense increased 11.9% as a result of higher levels of incentive compensation, inflationary increases in salaries and benefits, payroll expenses associated with Texas title agency University Title, which was acquired in the fourth quarter, and increases in staffing levels to accommodate higher volume. Agent commissions increased 2.4% due to an increase in agency premiums, while claims expense decreased to $242,953. Claims expense continued to benefit from favorable loss development in recent policy years, as well as lower levels of initial claims filings.

The quarter was shaped predominantly by the same factors that affected the year. Revenues increased 34.4%, while operating expenses increased 21.3%, resulting in net income of $5.1 million. Both the revenue and net income amounts are new records for any fourth quarter in the Company’s history.

Chairman J. Allen Fine commented, “2016 marks the second consecutive year with record levels of revenues, reflecting a strong real estate market as well as the success of our ongoing efforts to create and deepen relationships in the markets we serve. In addition to consistent revenue growth, we remain pleased with the continuation of positive claims experience in recent years, which we think is attributable both to macroeconomic trends, such as low levels of foreclosures, as well as our own internal risk management efforts. Both of these factors, in addition to diligent management of overhead expenses, led to record earnings for the year.”

“We are optimistic that the factors which enabled this strong revenue growth for the past couple of years will continue into 2017,” added Mr. Fine. “Even though the potential for additional Fed rate hikes and other economic factors dampen our expectations for refinance activity, a strengthening economy should provide a tailwind for higher levels of home sales. Regardless of the economic cycle, we will continue to remain focused on long-term strategies to profitably expand our market presence, enhance our competitive strengths, and strengthen our financial position.”

Investors Title Company’s subsidiaries issue and underwrite title insurance policies. The Company also provides investment management services and services in connection with tax-deferred exchanges of like-kind property.

Certain statements contained herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, among others, any statements regarding the Company’s expected performance for this year, future home price fluctuations, changes in home purchase or refinance activity and the mix thereof, interest rate changes, expansion of the Company’s market presence, enhancing competitive strengths, positive development in housing affordability, unemployment or overall economic conditions or statements regarding our actuarial assumptions and the application of recent historical claims experience to future periods. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from anticipated and historical results. Such risks and uncertainties include, without limitation: the cyclical demand for title insurance due to changes in the residential and commercial real estate markets; the occurrence of fraud, defalcation or misconduct; variances between actual claims experience and underwriting and reserving assumptions, including the limited predictive power of historical claims experience; declines in the performance of the Company’s investments; government regulation; changes in the economy; loss of agency relationships, or significant reductions in agent-originated business; difficulties managing growth, whether organic or through acquisitions and other considerations set forth under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission, and in subsequent filings.

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