Investors Title (ITIC) 8-K Investors Title Company Announces Second Quarter 2014 Results

Exhibit 99.1

Investors Title Company Announces Second Quarter 2014 Results

CHAPEL HILL, N.C.--(BUSINESS WIRE)--August 4, 2014--Investors Title Company announced its results for the second quarter ended June 30, 2014. Net income attributable to the Company decreased 15.8% to $3,373,598, or $1.65 per diluted share, compared with $4,005,675, or $1.92 per diluted share, for the prior year quarter.

Revenues decreased 1.4% to $33,221,553 versus the prior year quarter, primarily due to a 1.9% decrease in net premiums written. The premium decrease reflects substantially lower levels of refinance activity resulting from higher mortgage interest rates, partially offset by an increase in the level of purchase activity and growth in underlying real estate values upon which premiums are based.

Operating expenses increased 2.6% to $28,542,509 versus the prior year quarter, primarily due to an increase in agent commissions resulting from increased activity in markets which are predominantly agent-based. The increase in agent commissions was partially offset by a reduction in the provision for claims related to favorable experience in recent policy years. All other operating expenses were up slightly in total, primarily due to increases in payroll, equipment, and depreciation related to hardware upgrade projects.

For the six months ended June 30, 2014, net income attributable to the Company decreased 40.9% to $4,360,036, or $2.14 per diluted share, compared with $7,382,405, or $3.54 per diluted share, for the prior year period. Revenues increased 1.9% to $61,675,627 versus the prior year period, primarily due to increases in premium volumes and realized gains on investments. Operating expenses increased 11.5% to $55,640,068 versus the prior year period, driven mostly by an increase in agent commissions and an increase in the provision for claims when compared to unusually high favorable development in the prior year period. Other factors affecting operating results for the first half of the year were driven predominantly by the same factors that affected the second quarter.

Chairman J. Allen Fine added, “As expected, the drop in refinance activity which began late last year led to a reduction in premium volumes for the second quarter. We are, however, pleased to see sustained increases in the level of home prices, coupled with continued strength in home purchase activity. We will continue to monitor and respond to changes in the market, while we remain focused on enhancing our competitive strengths and profitably expanding our market presence over the long term.”

Investors Title Company is engaged through its subsidiaries in the business of issuing and underwriting title insurance policies. The Company also provides investment management services to individuals, companies, banks and trusts, as well as services in connection with tax-deferred exchanges of like-kind property.

Certain statements contained herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, among others, any statements regarding expansion of the Company’s market presence, enhancing competitive strengths or 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; 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, 2013, as filed with the Securities and Exchange Commission, and in subsequent filings.

Investors Title Company and Subsidiaries
Consolidated Statements of Income
For the Three and Six Months Ended June 30, 2014 and 2013
(Unaudited)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2014			2013			2014			2013
Revenues:
Net premiums written	$	29,849,853		$	30,429,761		$	54,759,105		$	54,355,758
Investment income - interest and dividends		1,039,435			925,047			2,065,851			1,845,532
Net realized gain on investments		92,082			55,272			584,219			71,616
Other		2,240,183			2,283,320			4,266,452			4,268,767
Total Revenues		33,221,553			33,693,400			61,675,627			60,541,673
Operating Expenses:
Commissions to agents		18,346,381			17,608,789			33,802,659			31,098,220
Provision for claims		294,281			996,870			2,669,664			607,812
Salaries, employee benefits and payroll taxes		6,454,930			6,249,723			12,640,691			12,400,473
Office occupancy and operations		1,246,644			1,026,108			2,426,971			2,100,341
Business development		511,763			452,353			1,029,657			881,086
Filing fees, franchise and local taxes		225,343			188,950			414,943			369,520
Premium and retaliatory taxes		546,091			530,524			840,565			971,047
Professional and contract labor fees		666,909			535,207			1,354,967			1,110,544
Other		250,167			234,826			459,951			381,162
Total Operating Expenses		28,542,509			27,823,350			55,640,068			49,920,205
Income Before Income Taxes		4,679,044			5,870,050			6,035,559			10,621,468
Provision For Income Taxes		1,281,000			1,846,000			1,652,000			3,211,000
Net Income		3,398,044			4,024,050			4,383,559			7,410,468
Net Income Attributable to Redeemable Noncontrolling Interest		(24,446	)		(18,375	)		(23,523	)		(28,063	)
Net Income Attributable to the Company	$	3,373,598		$	4,005,675		$	4,360,036		$	7,382,405
Basic Earnings Per Common Share	$	1.66		$	1.94		$	2.14		$	3.59
Weighted Average Shares Outstanding - Basic		2,034,931			2,063,797			2,036,047			2,054,300
Diluted Earnings Per Common Share	$	1.65		$	1.92		$	2.14		$	3.54
Weighted Average Shares Outstanding - Diluted		2,039,202			2,089,674			2,041,268			2,087,229

Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of June 30, 2014 and December 31, 2013
(Unaudited)
		June 30, 2014		December 31, 2013
Assets:
Investments in securities:
Fixed maturities, available-for-sale, at fair value	$	90,978,622	$	91,445,413
Equity securities, available-for-sale, at fair value		38,193,808		36,144,065
Short-term investments		9,695,708		7,926,373
Other investments		7,949,171		7,247,831
Total investments		146,817,309		142,763,682
Cash and cash equivalents		19,501,886		23,626,761
Premiums and fees receivable, net		8,630,916		8,750,224
Accrued interest and dividends		981,541		1,006,698
Prepaid expenses and other assets		8,459,543		7,466,141
Property, net		4,981,955		4,325,538
Current income taxes receivable		1,879,224		366,772
Total Assets	$	191,252,374	$	188,305,816
Liabilities and Stockholders' Equity
Liabilities:
Reserves for claims	$	35,628,000	$	35,360,000
Accounts payable and accrued liabilities		17,225,696		20,324,190
Deferred income taxes, net		5,496,643		4,013,983
Total liabilities		58,350,339		59,698,173
Redeemable Noncontrolling Interest		-		545,489
Stockholders' Equity:
Common stock - no par value (shares authorized 10,000,000;
2,029,819 and 2,037,135 shares issued and outstanding as of June 30, 2014 and
December 31, 2013, respectively, excluding 291,676 shares for 2014 and 2013
of common stock held by the Company's subsidiary)		1		1
Retained earnings		120,148,704		116,714,749
Accumulated other comprehensive income		12,753,330		11,347,404
Total stockholders' equity		132,902,035		128,062,154
Total Liabilities and Stockholders' Equity	$	191,252,374	$	188,305,816

Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
For the Three and Six Months Ended June 30, 2014 and 2013
(Unaudited)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014		%	2013		%	2014		%	2013		%
Branch	$	6,275,362	21.0	$	7,332,764	24.1	$	11,107,041	20.3	$	13,116,393	24.1
Agency		23,574,491	79.0		23,096,997	75.9		43,652,064	79.7		41,239,365	75.9
Total	$	29,849,853	100.0	$	30,429,761	100.0	$	54,759,105	100.0	$	54,355,758	100.0

CONTACT:
Investors Title Company
Elizabeth B. Lewter, 919-968-2200