Investors Title Company Announces Record Third Quarter 2017 Financial Results

Investors Title Company (NASDAQ: ITIC) today announced its results for the third quarter ended September 30, 2017. Net income attributable to the Company was $5.9 million, or $3.13 per diluted share, versus $8.1 million, or $4.29 per diluted share, for the prior year period. The Company set an all-time quarterly record for revenues and net premiums written. In addition, earnings for the current quarter were the second highest in the Company’s history.

Revenues increased 5.2% to $43.1 million, compared with $41.0 million in the prior year quarter. Net premiums written increased 1.0%, primarily due to a higher level of purchase transactions, business from new agencies, and higher average real estate values, partially offset by a decrease in the level of refinance activity. Other income sources, including revenue from ancillary services coincident with providing title insurance, increased 49.7% to $4.6 million.

Operating expenses increased 15.5% versus the prior year quarter, mainly as a result of increases in the provision for claims stemming from recognition of favorable loss development in the prior year quarter that did not repeat in the current year quarter. In addition, the inclusion of expenses for a title insurance agency acquired in the fourth quarter of 2016 contributed to the higher level of expenses. Excluding these two factors, most expense categories were largely in line with the prior year period.

For the nine months ended September 30, 2017, net income attributable to the Company increased 11.1% to $16.1 million, or $8.48 per diluted share, versus $14.5 million, or $7.53 per diluted share, for the prior year period. Revenues increased 21.4% to $121.1 million, from increases in premiums written due to higher transaction volumes, higher real estate values, and from increases in other income sources. Operating expenses increased 22.9% to $97.4 million, mainly due to the same factors that affected the third quarter.

Chairman J. Allen Fine added, "We are pleased to report another quarter of solid operating results. Against the backdrop of historically low interest rates and a strengthening economy, strong transaction volumes in our core markets, coupled with higher home prices and new agency distribution, resulted in the highest quarterly revenue level in the Company’s history.

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 the 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, 2016, as filed with the Securities and Exchange Commission, and in subsequent filings.

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