Investors Title Co. swung to a loss in the fourth quarter as the insurer wrote fewer premiums and recorded a larger provision for claims.
The Chapel Hill insurer said Tuesday that it lost $3.95 million, or $1.72 per diluted share, in the fourth quarter. A year earlier, the company earned $1.07 million, or 43 cents per share.
Total revenue fell, to $12.3 million, from $19.4 million.
Investors Title (Nasdaq: ITIC) sells title insurance, which protects property owners from losses incurred due to defects in a title, liens on a property, or similar circumstances.
In the fourth quarter, the company’s net premiums written fell by 20.4 percent, to $12.4 million. And its provision for claims – the money it sets aside to pay out claims to customers – increased, to $6.9 million, from $1.6 million.
CEO J. Allen Fine said the bulk of the increase in claims was attributable to three occurrences. The largest, at $3.3 million, was related to unpaid mechanic’s liens. The other two, Fine says, were fraud-related.
Fine says the company has had to have a small number of layoffs in the past few months to “rightsize.” Investors Title, which now has about 230 employees, down from about 245 a year ago.
But Investors Title, known for its conservative practices, is still relatively well-off compared to other title insurers. Shares of the company are down by about 20 percent in the past year. Compare that to, say, struggling title insurer LandAmerica, which had offices around the country. LandAmerica filed for bankruptcy in late 2008, selling off much of its business to competitor Fidelity National Financial Inc., and now plans to shut its doors by the end this year.
Still, Fine says, business is slower than it has been in a while.
“We’re seeing a little tiny increase in refis because of the mortgage rates being down,” Fine says. “But we hope home sales pick back up.”
As to when that would happen, Fine says: “We don’t have any way of knowing that.”
North Carolina’s housing markets, particularly in major metro areas, have held up better than many residential markets around the country – particularly when it comes to prices, which have remained steady instead of collapsing as they have elsewhere. But sales volumes still has have slowed by more than 50 percent in the last two years in areas such as Charlotte and Raleigh, and that means less business for a company such as Investors Title.
Investors Title is the largest title insurer in the Triangle, according to Triangle Business Journal research.