ITIC Investors Title Company

Investors Title Company (NASDAQ: ITIC), today announced its results for the fourth quarter and year ended December 31, 2012. For the quarter, net income increased 68.3% to $3,162,684, or $1.51 per diluted share, compared with $1,879,459, or $0.88 per diluted share, for the prior year period. For the year, net income increased 60.1% to $11,102,496, or $5.24 per diluted share, compared with $6,933,936, or $3.20 per diluted share, for the prior year period.

The increase in net income for the quarter and the year was driven primarily by increases in premium volumes, reflecting widespread increases in overall mortgage lending activity. New premium charges and rate increases in a number of our markets also contributed to the increase.

For the quarter, premium volumes increased 66.8%. Operating expenses increased 62.4% versus the prior year period, primarily due to increases in commissions to agents, claims, and payroll expense. Commissions to agents increased commensurate with the increase in agency premiums. The claims provision rate as a percentage of net premiums written tracked favorably to the long-term trend, and was virtually flat for the quarter compared with the prior year quarter. The increase in payroll expense was primarily driven by an increase in staffing levels in software development.

For the year, revenues increased 26.9% over the prior year to $115,079,092, due to high levels of overall mortgage activity, and new premium charges and rate increases. Operating expenses followed the trend for the quarter, increasing 21.9%.

Chairman J. Allen Fine added, “We are pleased to report record levels of revenue and earnings per share for 2012. A favorable interest rate environment led to high levels of mortgage lending across the industry, with increases in both purchase and refinance activity versus the prior year. In addition, we benefitted from ongoing expansion of our agent base and targeted entry into new markets. Our balance sheet and financial condition remain strong, as total assets reached an all-time high of $171.9 million as of year-end. In the coming year, we will continue to emphasize the expansion of our agency base and operational efficiency.”

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 other statements, any predictions regarding future agency base expansion or increasing operational efficiency. 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; 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, 2011, 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 Twelve Months Ended December 31, 2012 and 2011 (Unaudited)                           Three Months Ended Twelve Months Ended December 31 December 31

2012

2011

2012

2011

Revenues: Net premiums written $ 30,403,989 $ 18,226,131 $ 102,331,102 $ 81,529,333 Investment income - interest and dividends 1,030,659 929,791 3,980,411 3,595,036 Net realized gain on investments 708,420 107,731 1,066,239 28,559 Other 2,164,017   1,563,400 7,701,340 5,532,228 Total Revenues 34,307,085   20,827,053 115,079,092 90,685,156   Operating Expenses: Commissions to agents 18,743,705 10,261,013 59,427,070 49,596,250 Provision for claims 1,647,592 1,041,168 6,072,115 3,342,427 Salaries, employee benefits and payroll taxes 5,799,813 4,442,291 21,877,186 18,552,504 Office occupancy and operations 1,016,904 886,735 3,936,653 3,722,803 Business development 600,832 583,317 1,887,398 1,706,834 Filing fees, franchise and local taxes 172,176 104,483 846,168 516,380 Premium and retaliatory taxes 572,854 361,662 1,885,760 1,729,830 Professional and contract labor fees 832,303 381,158 2,487,582 1,513,466 Other 123,754   112,767 579,253 505,726 Total Operating Expenses 29,509,933   18,174,594 98,999,185 81,186,220   Income Before Income Taxes 4,797,152   2,652,459 16,079,907 9,498,936   Provision For Income Taxes 1,650,000   773,000 4,889,000 2,565,000   Net Income 3,147,152 1,879,459 11,190,907 6,933,936   Less: Net (Loss) Income Attributable to Redeemable Noncontrolling Interests (15,532 ) - 88,411 -   Net Income Attributable to the Company $ 3,162,684   $ 1,879,459 $ 11,102,496 $ 6,933,936   Basic Earnings Per Common Share $ 1.54   $ 0.89 $ 5.33 $ 3.22   Weighted Average Shares Outstanding - Basic 2,055,703   2,112,675 2,081,703 2,151,350   Diluted Earnings Per Common Share $ 1.51   $ 0.88 $ 5.24 $ 3.20   Weighted Average Shares Outstanding - Diluted 2,093,538   2,132,780 2,116,793 2,169,636 Investors Title Company and Subsidiaries Consolidated Balance Sheets As of December 31, 2012 and 2011 (Unaudited)     December 31, 2012   December 31, 2011 Assets: Investments in securities: Fixed maturities, available-for-sale, at fair value $ 81,936,978 $ 85,407,365 Equity securities, available-for-sale, at fair value 28,510,933 22,549,975 Short-term investments 13,567,648 14,112,262 Other investments 6,763,100 3,631,714 Total investments 130,778,659 125,701,316   Cash and cash equivalents 20,810,018 18,042,258 Premiums and fees receivable, net 11,037,714 6,810,000 Accrued interest and dividends 1,037,447 1,108,156 Prepaid expenses and other assets 4,651,115 2,743,517 Property, net 3,603,323 3,553,216   Total Assets $ 171,918,276 $ 157,958,463   Liabilities and Stockholders' Equity Liabilities: Reserves for claims $ 39,078,000 $ 37,996,000 Accounts payable and accrued liabilities 15,477,545 12,330,383 Current income taxes payable 1,336,824 640,533 Deferred income taxes, net 893,156 479,363 Total liabilities 56,785,525 51,446,279   Redeemable Noncontrolling Interest 493,861 -   Stockholders' Equity: Common stock - no par value (shares authorized 10,000,000; 2,043,359 and 2,107,681 shares issued and outstanding as of December 31, 2012 and December 31, 2011, respectively, excluding 291,676 shares for 2012 and 2011 of common stock held by the Company's subsidiary) 1 1 Retained earnings 105,820,459 99,003,018 Accumulated other comprehensive income 8,818,430 7,509,165 Total stockholders' equity 114,638,890 106,512,184   Total Liabilities and Stockholders' Equity $ 171,918,276 $ 157,958,463 Investors Title Company and Subsidiaries Net Premiums Written By Branch and Agency For the Three and Twelve Months Ended December 31, 2012 and 2011 (Unaudited)                       Three Months Ended Twelve Months Ended December 31 December 31     2012  

%

      2011   %     2012   %       2011   % Branch $   6,216,397 20.4 $   4,424,488 24.3 $   23,762,885 23.2 $   16,485,973 20.2   Agency     24,187,592   79.6       13,801,643   75.7     78,568,217   76.8       65,043,360   79.8   Total $   30,403,989   100.0   $   18,226,131   100.0 $   102,331,102   100.0   $   81,529,333   100.0