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What changed in INVESTORS TITLE CO's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of INVESTORS TITLE CO's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+193 added−182 removedSource: 10-K (2025-03-17) vs 10-K (2024-03-15)

Top changes in INVESTORS TITLE CO's 2024 10-K

193 paragraphs added · 182 removed · 168 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeMARKETING The Company markets its title insurance services to a broad range of customers in the residential and commercial market sectors of the real estate industry. Issuing agents are typically real estate attorneys, independent agents or subsidiaries of community and regional mortgage lending institutions, depending on local customs and regulations and the Company’s marketing strategy in a particular territory.
Biggest changeIssuing agents are typically real estate attorneys, independent agents or subsidiaries of community and regional mortgage lending institutions, depending on local customs and regulations and the Company’s marketing strategy in a particular territory. ITIC and NITIC strive to provide superior service to their customers and consider this an important factor in attracting and retaining customers.
The Company has not experienced, and does not anticipate that it or its subsidiaries will incur, any significant expenses related to environmental claims. 9 In connection with tax-deferred exchanges of like-kind property, ITAC may temporarily hold title to property pursuant to an accommodation titleholder agreement.
The Company has not experienced, and does not anticipate that it or its subsidiaries will incur, any significant expenses related to environmental claims. In connection with tax-deferred exchanges of like-kind property, ITAC may temporarily hold title to property pursuant to an accommodation titleholder agreement.
Allen Fine has been Chief Executive Officer and Chairman of the Board of the Company since its incorporation in 1973. He also served as President of the Company until May 1997. He is the father of James A. Fine, Jr. and W. Morris Fine. 10 James A. Fine, Jr. was named Vice President of the Company in 1987.
Allen Fine has been Chief Executive Officer and Chairman of the Board of the Company since its incorporation in 1973. He also served as President of the Company until May 1997. He is the father of James A. Fine, Jr. and W. Morris Fine. James A. Fine, Jr. was named Vice President of the Company in 1987.
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Company’s internet address is www.invtitle.com .
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 10 The Company’s internet address is www.invtitle.com .
At December 31, 2023, both ITIC and NITIC met the statutory premium reserve requirements and the minimum capital and surplus requirements of the states where they are licensed. A substantial portion of the assets of the Company’s title insurance subsidiaries consists of their portfolios of investment securities.
At December 31, 2024, both ITIC and NITIC met the statutory premium reserve requirements and the minimum capital and surplus requirements of the states where they are licensed. A substantial portion of the assets of the Company’s title insurance subsidiaries consists of their portfolios of investment securities.
Executive Officers of the Company Following is information regarding the executive officers of the Company as of February 21, 2024. Each officer is appointed at the annual meeting of the Board of Directors to serve until the next annual meeting of the Board or until his or her respective successor has been elected and qualified.
Executive Officers of the Company Following is information regarding the executive officers of the Company as of February 21, 2025. Each officer is appointed at the annual meeting of the Board of Directors to serve until the next annual meeting of the Board or until his or her respective successor has been elected and qualified.
In addition, at December 31, 2023 and 2022, the Company held investments that are accounted for using the equity method and measurement alternative method (refer to Note 1 of the Notes to the Consolidated Financial Statements).
In addition, at December 31, 2024 and 2023, the Company held investments that are accounted for using the equity method and measurement alternative method (refer to Note 1 of the Notes to the Consolidated Financial Statements).
EMPLOYEES AND HUMAN CAPITAL The Company and its subsidiaries had 545 full-time employees and 26 part-time employees as of December 31, 2023. None of the employees are covered by any collective bargaining agreements. Management considers its relationship with its employees to be favorable. Recruiting and retaining qualified personnel and key talent is important to the Company’s success.
EMPLOYEES AND HUMAN CAPITAL The Company and its subsidiaries had 521 full-time employees and 29 part-time employees as of December 31, 2024. None of the employees are covered by any collective bargaining agreements. Management considers its relationship with its employees to be favorable. Recruiting and retaining qualified personnel and key talent is important to the Company’s success.
Compensation and Benefits The Company strives to provide robust compensation and benefits to its employees. In addition to competitive salaries, compensation and benefit programs include annual bonuses, an employer-sponsored 401(k) plan, employer paid healthcare, life insurance, long and short term disability benefits, flexible spending accounts, an employee assistance program, and paid time off.
In addition to competitive salaries, compensation and benefit programs include annual bonuses, an employer-sponsored 401(k) plan, employer paid healthcare, life insurance, long and short term disability benefits, flexible spending accounts, an employee assistance program, and paid time off.
Name Age Position with Registrant J. Allen Fine 89 Chief Executive Officer and Chairman of the Board James A. Fine, Jr. 61 President, Treasurer, Chief Financial Officer, Chief Accounting Officer and Director W. Morris Fine 57 Executive Vice President, Secretary and Director J.
Name Age Position with Registrant J. Allen Fine 90 Chief Executive Officer and Chairman of the Board James A. Fine, Jr. 62 President, Treasurer, Chief Financial Officer, Chief Accounting Officer and Director W. Morris Fine 58 Executive Vice President, Secretary and Director J.
Because home sales are typically strongest in periods of favorable weather, the first calendar quarter tends to have the lowest activity levels, while the spring and summer quarters tend to be more active.
Because home sales are typically strongest in periods of favorable weather, the first calendar quarter tends to have the lowest activity levels, while the spring and summer quarters tend to be more active. Refinance activity is generally less seasonal, but is subject to interest rate fluctuations.
None of these other lines of business is currently a reportable segment for which separate financial information is presented; instead, they are collectively included and reported in the category “All Other” in the segment information in Note 12 of the Notes to the Consolidated Financial Statements.
None of these other lines of business is currently a reportable segment for which separate financial information is presented; instead, they are collectively included and reported in the category “All Other” in the segment information in Note 12 of the Notes to the Consolidated Financial Statements. 7 CYCLICALITY AND SEASONALITY Real estate activity, home sales and mortgage lending are cyclical in nature.
NITIC was incorporated in South Carolina in 1973, and is licensed to write title insur ance in 20 states and the District of Columbia. In November 2014, NITIC redomesticated to Texas. NITIC currently writes title insurance as a primary insurer in Texas , and as a reinsurer for ITIC.
NITIC was incorporated in South Carolina in 1973, and is licensed to write title insur ance in 20 states and the District of Columbia. In November 2014, NITIC redomesticated to Texas.
Short-term investments, which consist primarily of money market funds and U.S. Treasury bills, have an original maturity of one year or less, are carried at cost, which approximates fair value due to the short duration to maturity.
Treasury bills, have an original maturity of one year or less, are carried at cost, which approximates fair value due to the short duration to maturity.
Other factors include mortgage interest rates, consumer confidence, economic conditions, supply, demand, and family income levels. The Company’s premiums in future periods are likely to fluctuate due to these and other factors which are beyond management’s control. Historically, the title insurance business tends to be seasonal as well as cyclical.
The Company’s premiums in future periods are likely to fluctuate due to these and other factors which are beyond management’s control. Historically, the title insurance business tends to be seasonal as well as cyclical.
The CFPB has the authority to identify and address, through regulation, unfair, deceptive and abusive practices in the mortgage industry and certain other settlement service industries. Increased regulatory involvement may affect the Company and its service providers.
The CFPB has the authority to identify and address, through regulation, unfair, deceptive and abusive practices in the mortgage industry and certain other settlement service industries. Leadership transitions at the CFPB under the new presidential administration may result in changes that could affect the title insurance industry. 8 Increased regulatory involvement may affect the Company and its service providers.
They also assume reinsurance for certain risks of other title insurers for which they receive additional income in the form of reinsurance premiums. For each of the last two years, revenues from reinsurance activities accounted for less than 1% of total premium volume. Exchange Services The Company’s exchange services business includes services offered by wholly owned subsidiaries ITEC and ITAC.
For each of the last two years, revenues from reinsurance activities accounted for less than 1% of total premium volume. Exchange Services The Company’s exchange services business includes services offered by wholly owned subsidiaries ITEC and ITAC.
The Company’s investment policy is designed to maintain a high quality portfolio and maximize income. Some state laws impose restrictions upon the types and amounts of investments that can be made by the Company’s insurance subsidiaries. The Company’s investment portfolio is managed internally and via a wholly owned subsidiary.
Some state laws impose restrictions upon the types and amounts of investments that can be made by the Company’s insurance subsidiaries. The Company’s investment portfolio is managed internally and via a wholly owned subsidiary. The securities in the Company’s portfolio are subject to economic conditions and normal market risks.
These regulations, among other things, require insurance holding companies to register and file certain reports, and require prior regulatory approval of the payment of extraordinary dividends and other intercompany distributions or transfers.
The Company is an insurance holding company and therefore, it is subject to regulation in the states in which its insurance subsidiaries do business. These regulations, among other things, require insurance holding companies to register and file certain reports, and require prior regulatory approval of the payment of extraordinary dividends and other intercompany distributions or transfers.
For a description of the level of net premiums written geographically for significant states, refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K. 6 Each state license authorizing ITIC or NITIC to write title insurance must be renewed annually.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K. Each state license authorizing ITIC or NITIC to write title insurance must be renewed annually. These licenses are necessary for the companies to operate as a title insurer in each state in which they write premiums.
Lending institutions benefit from title insurance policies that are purchased by borrowers on the lending institutions’ behalf as a condition to the making of loans. Refusal by major market lenders to accept our product offerings could have a material adverse effect on the Company.
Lending institutions benefit from title insurance policies that are purchased by borrowers on the lending institutions’ behalf as a condition to the making of loans.
The securities in the Company’s portfolio are subject to economic conditions and normal market risks. Equity securities at December 31, 2023 and 2022 consisted of investments in various industry groups. The Company’s investment portfolio did not include any significant investments in banks, trust or insurance companies at December 31, 2023 or 2022.
Equity securities at December 31, 2024 and 2023 consisted of investments in various industry groups. The Company’s investment portfolio did not include any significant investments in banks, trust or insurance companies at December 31, 2024 or 2023. Short-term investments, which consist primarily of money market funds and U.S.
The Company is an equal opportunity employer, committed to creating an inclusive culture that supports all employees and is free of discrimination based on gender, race, ethnicity, religion, disability or other legally protected characteristic. The current makeup of the Company's Board of Directors complies with the Nasdaq Stock Market LLC's rules related to board diversity.
The Company is an equal opportunity employer, committed to creating an inclusive culture that supports all employees and is free of discrimination based on gender, race, ethnicity, religion, disability or other legally protected characteristic. Compensation and Benefits The Company strives to provide robust compensation and benefits to its employees.
Premiums from title insurance written on properties located in North Carolina, Texas, South Carolina and Georgia represent the largest source of revenue for the title insurance segment. In North Carolina and Texas, the Company’s title insurance commitments and policies are issued directly and through agents. In South Carolina, Georgia and other states, title policies are primarily issued through agents.
In North Carolina and Texas, the Company’s title insurance commitments and policies are issued directly and through agents. In South Carolina, Georgia, Florida and other states, title policies are primarily issued through agents. For a description of the level of net premiums written geographically for significant states, refer to “Item 7.
These licenses are necessary for the companies to operate as a title insurer in each state in which they write premiums. Ratings: The Company’s title insurance subsidiaries are regularly assigned ratings by independent agencies designed to indicate their financial condition and/or their claims paying ability. The rating agencies determine ratings primarily by analyzing financial data.
Ratings: The Company’s title insurance subsidiaries are regularly assigned ratings by independent agencies designed to indicate their financial condition and/or their claims paying ability. The rating agencies determine ratings primarily by analyzing financial data. Reinsurance: The Company assumes and cedes reinsurance with other insurance companies in the normal course of business.
CYCLICALITY AND SEASONALITY Real estate activity, home sales and mortgage lending are cyclical in nature. Title insurance premiums are closely related to the level of real estate activity and the average price of real estate sales. The availability of funds to finance purchases directly affects real estate sales.
Title insurance premiums are closely related to the level of real estate activity and the average price of real estate sales. The availability of funds to finance purchases directly affects real estate sales. Other factors include mortgage interest rates, consumer confidence, economic conditions, supply, demand, and family income levels.
Following the enactment of the California Consumer Privacy Act, the Virginia Consumer Data Protection Act and the European Union General Data Protection Regulation, the Company expects the adoption of comprehensive data privacy laws in more jurisdictions in which it operates. 8 Intermediary services are not federally regulated by any regulatory commissions, and neither ITEC nor ITAC operate in any state that regulates this industry, unless they are in compliance with such state regulations.
Intermediary services are not federally regulated by any regulatory commissions, and neither ITEC nor ITAC operate in any state that regulates this industry, unless they are in compliance with such state regulations.
The Commercial Services Division of ITIC also markets the services offered by ITEC and ITAC to its commercial clients. Marketing of tax-deferred exchange services offered by ITEC and ITAC has been incorporated into the marketing of the core title products offered by ITIC and NITIC.
Marketing of tax-deferred exchange services offered by ITEC and ITAC has been incorporated into the marketing of the core title products offered by ITIC and NITIC. REGULATION Any material change in the Company’s regulatory environment may have an adverse effect on its business.
Refinance activity is generally less seasonal, but is subject to interest rate fluctuations. 7 Seasonal and other factors affecting the level of real estate activity and the volume of title premiums written will also generally affect the demand for exchange services.
Seasonal and other factors affecting the level of real estate activity and the volume of title premiums written will also generally affect the demand for exchange services. MARKETING The Company markets its title insurance services to a broad range of customers in the residential and commercial market sectors of the real estate industry.
ITIC and NITIC strive to provide superior service to their customers and consider this an important factor in attracting and retaining customers. Company personnel strive to develop new business and agency relationships to increase market share while ITIC’s Commercial Services Division focuses on services provided to commercial clients.
Company personnel strive to develop new business and agency relationships to increase market share while ITIC’s Commercial Services Division focuses on services provided to commercial clients. The Commercial Services Division of ITIC also markets the services offered by ITEC and ITAC to its commercial clients.
Ceded reinsurance is comprised of excess of loss treaties, which outline the conditions in which the reinsurance company will pay claims and protect the ceding insurer against losses over certain agreed amounts. In the ordinary course of business, ITIC and NITIC reinsure certain risks with other title insurers to limit their risk exposure and to comply with state insurance regulations.
Reinsurance is a contractual arrangement whereby one insurer assumes some or all of the risk exposure written by another insurer. Ceded reinsurance is comprised of excess of loss treaties, which outline the conditions in which the reinsurance company will pay claims and protect the ceding insurer against losses over certain agreed amounts.
Other laws and regulations regulate the manner in which the Company collects, uses, retains, protects, discloses, transfers, and processes personal data.
Other laws and regulations regulate the manner in which the Company collects, uses, retains, protects, discloses, transfers, and processes personal data. After comprehensive data privacy laws have been enacted in various jurisdictions, the Company expects that additional regions, including its operational areas, will implement comparable legislation.
INVESTMENT POLICIES The Company and its subsidiaries derive a substantial portion of their income from investments in municipal and federal U.S. government securities and investment grade corporate fixed maturity securities and equity securities. The Company’s fixed maturity securities are classified as available for sale and carried at estimated fair value. Equity securities are also carried at estimated fair value.
Refusal by major market lenders to accept our product offerings could have a material adverse effect on the Company. 9 INVESTMENT POLICIES The Company and its subsidiaries derive a substantial portion of their income from investments in municipal and federal U.S. government securities and investment grade corporate fixed maturity securities and equity securities.
Removed
Reinsurance: The Company assumes and cedes reinsurance with other insurance companies in the normal course of business. Reinsurance is a contractual arrangement whereby one insurer assumes some or all of the risk exposure written by another insurer.
Added
NITIC currently writes title insurance as a primary insurer in Texas , and as a reinsurer for ITIC. 6 Premiums from title insurance written on properties located in North Carolina, Texas, South Carolina, Georgia and Florida represent the largest source of revenue for the title insurance segment.
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REGULATION Any material change in the Company’s regulatory environment may have an adverse effect on its business. The Company is an insurance holding company and therefore, it is subject to regulation in the states in which its insurance subsidiaries do business.
Added
In the ordinary course of business, ITIC and NITIC reinsure certain risks with other title insurers to limit their risk exposure and to comply with state insurance regulations. They also assume reinsurance for certain risks of other title insurers for which they receive additional income in the form of reinsurance premiums.
Added
The Company’s fixed maturity securities are classified as available for sale and carried at estimated fair value. Equity securities are also carried at estimated fair value. The Company’s investment policy is designed to maintain a high quality portfolio and maximize income.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Company faces challenges in accurately predicting the consequences of occurrences such as inflation, recession, geopolitical and military conflicts, or political tensions preventing Congress from reaching timely agreements on future increases or suspension of the debt ceiling. These situations could exacerbate market volatility and economic uncertainty.
Biggest changeDemand for title insurance also depends in part upon the requirement by mortgage lenders and other participants in the secondary mortgage market that title insurance policies be obtained on residential and commercial real property. 11 The Company faces challenges in accurately predicting the consequences of occurrences such as inflation, recession, geopolitical and military conflicts, or political tensions preventing Congress from reaching timely agreements on matters impacting the economy such as future increases or suspension of the debt ceiling.
Non-public personal information may include, but is not limited to, names, addresses, social security numbers, and banking information. Additionally, future or past business transactions (such as acquisitions or integrations) could expose the Company to additional cybersecurity risks and vulnerabilities, as the Company’s systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
Non-public personal information may include, but is not limited to, names, addresses, social security numbers, and banking information. 16 Additionally, future or past business transactions (such as acquisitions or integrations) could expose the Company to additional cybersecurity risks and vulnerabilities, as the Company’s systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
The risk of loss is increased during periods of economic uncertainty and tight credit markets as these factors could limit the ability of some issuers to repay their debt obligations. Fixed maturity securities and equity securities are carried at estimated fair value on the Company’s Consolidated Balance Sheets.
The risk of loss is increased during periods of economic uncertainty and tight credit markets as these factors could limit the ability of some issuers to repay their debt obligations. 15 Fixed maturity securities and equity securities are carried at estimated fair value on the Company’s Consolidated Balance Sheets.
A significant downgrade in the ratings of either of the Company’s insurance subsidiaries could negatively impact the ability to compete for new business, retain existing business and maintain the necessary licenses to operate as title insurance companies in various states. Title insurance rate regulation could have an adverse impact on the Company’s results of operations.
A significant downgrade in the ratings of either of the Company’s insurance subsidiaries could negatively impact the ability to compete for new business, retain existing business and maintain the necessary licenses to operate as title insurance companies in various states. 14 Title insurance rate regulation could have an adverse impact on the Company’s results of operations.
Future inquiries could lead to fines for violations, settlements with regulating authorities that could result in fines or requirements to pay claims, and the potential for further regulation. The results of future inquiries could adversely affect the Company’s results of operations and financial condition. 14 The Company relies on distributions from its subsidiaries .
Future inquiries could lead to fines for violations, settlements with regulating authorities that could result in fines or requirements to pay claims, and the potential for further regulation. The results of future inquiries could adversely affect the Company’s results of operations and financial condition. The Company relies on distributions from its subsidiaries .
To the extent that actual claims experience is greater than estimated, the Company could be required to increase the reserve. Competition affects the Company’s results of operations . The title insurance industry is highly competitive with only a few insurers comprising a large percentage of the market.
To the extent that actual claims experience is greater than estimated, the Company could be required to increase the reserve. 12 Competition affects the Company’s results of operations . The title insurance industry is highly competitive with only a few insurers comprising a large percentage of the market.
Misidentified or unanticipated risks could adversely impact the Company and its results of operations. RISKS RELATED TO THE EFFECTS OF CLIMATE CHANGE, SEVERE WEATHER CONDITIONS, POTENTIAL PANDEMICS, HEALTH CRISES, OR OTHER CATASTROPHIC EVENTS Our business could be adversely affected by climate change, severe weather conditions, potential pandemics, health crises, or the occurrence of another catastrophic event.
Misidentified or unanticipated risks could adversely impact the Company and its results of operations. 17 RISKS RELATED TO THE EFFECTS OF CLIMATE CHANGE, SEVERE WEATHER CONDITIONS, POTENTIAL PANDEMICS, HEALTH CRISES, OR OTHER CATASTROPHIC EVENTS Our business could be adversely affected by climate change, severe weather conditions, potential pandemics, health crises, or the occurrence of another catastrophic event.
These risks could be particularly significant if the Company incurs significant costs in pursuing an acquisition or other initiatives. 12 The Company depends on its ability to attract and retain key personnel and agents, and its inability to do so could adversely affect its business.
These risks could be particularly significant if the Company incurs significant costs in pursuing an acquisition or other initiatives. The Company depends on its ability to attract and retain key personnel and agents, and its inability to do so could adversely affect its business.
Furthermore, as technology develops, and as cybercriminals become more capable, the difficulty and expense of maintaining IT security and redundancy may increase. To the extent the Company’s IT systems store non-public personal information, and information about its employees, security breaches may expose the Company to other serious liabilities and reputational harm if such data is misappropriated.
Furthermore, as technology develops, and as cybercriminals become more capable, the difficulty and expense of maintaining IT security and redundancy may increase. To the extent the Company’s IT systems store non-public personal information and data about its employees, customers, and shareholders, security breaches may expose the Company to other serious liabilities and reputational harm if such data is misappropriated.
The Company’s future growth plans involve expansion into new geographic locations and further penetration into established markets through new or existing agents, or through acquisitions.
The Company’s future growth plans involve expansion into new geographic locations and further penetration into established markets through new or existing agents, or through acquisitions or joint ventures.
Unfavorable economic or other conditions could cause the Company to record impairment charges for all or a portion of its goodwill and other intangible assets. As a result of acquisition activity, the Company has goodwill and other intangible assets that comprise approximately 4.9% of total assets as of December 31, 2023.
Unfavorable economic or other conditions could cause the Company to record impairment charges for all or a portion of its goodwill and other intangible assets. As a result of acquisition activity, the Company has goodwill and other intangible assets that comprise approximately 4.5% of total assets as of December 31, 2024.
As of December 31, 2023, approximat ely $113.0 million of c onsolidated shareholders’ equity represented the net assets of the Company’s subsidiaries that cannot be transferred in the form of dividends, loans or advances to the Company. In general, dividends in excess of prescribed limits are deemed “extraordinary” and require prior approval by the appropriate regulatory body.
As of December 31, 2024, approximat ely $118.2 million of c onsolidated shareholders’ equity represented the net assets of the Company’s subsidiaries that cannot be transferred in the form of dividends, loans or advances to the Company. In general, dividends in excess of prescribed limits are deemed “extraordinary” and require prior approval by the appropriate regulatory body.
Unrealized holding gains and losses on equity securities are reported in the Consolidated Statements of Operations as net investment gains (losses), without regard to impairment. Changes in the estimated fair value of securities in the Company’s investment portfolio could have a material adverse effect on the Company’s results of operations and financial condition.
Changes in the estimated fair value of equity security investments are reported in the Consolidated Statements of Operations as net investment gains, without regard to impairment. Fluctuations in the estimated fair value of securities in the Company’s investment portfolio could have a material adverse effect on the Company’s results of operations and financial condition.
Even if the Company is successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Even if the Company is successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees.
There is no guarantee that all title agents and approved providers will comply with contractual limitations, and, due to changes in the regulatory environment and trends in litigation, the Company could be held liable for their actions.
These agents and providers operate with a substantial degree of independence from the Company, subject to certain contractual limitations. There is no guarantee that all title agents and approved providers will comply with contractual limitations, and, due to the regulatory environment and trends in litigation, the Company could be held liable for their actions.
Economic downturns or poor performance of the acquisitions could result in the Company recognizing an impairment of a portion or all of the goodwill and intangible assets on the Company’s books, which could have a material adverse effect on the Company’s results of operations and financial condition.
Economic downturns or poor performance of the acquisitions could result in the Company recognizing an impairment of a portion or all of the goodwill and intangible assets on the Company’s books, which could have a material adverse effect on the Company’s results of operations and financial condition. 13 RISKS RELATED TO REGULATORY AND COMPLIANCE MATTERS The Company’s insurance subsidiaries are subject to complex government regulations.
A decrease in the level of real estate activity in these states, whether driven by weak economic conditions, changes in regulatory environments or other factors that influence demand, could have a negative impact on the Company’s financial results.
In 2024, these states represented 34.5%, 27.9%, 8.8%, 7.6% and 7.2% of total premiums written by the Company, respectively. A decrease in the level of real estate activity in these states, whether driven by weak economic conditions, changes in regulatory environments or other factors that influence demand, could have a negative impact on the Company’s financial results.
RISKS RELATED TO REGULATORY AND COMPLIANCE MATTERS The Company’s insurance subsidiaries are subject to complex government regulations. Changes in regulations may have an adverse effect on the Company’s results of operations. The Company’s title insurance subsidiaries are subject to extensive regulations that are intended to protect policyholders and consumers.
Changes in regulations may have an adverse effect on the Company’s results of operations. The Company’s title insurance subsidiaries are subject to extensive regulations that are intended to protect policyholders and consumers. The Company’s title insurance subsidiaries are subject to regulations by the CFPB, created by the Dodd-Frank Act.
As cybercriminals continue to become more sophisticated, the costs to insure against cyberattacks have risen and may continue to rise in the future. The Company’s coverage under its cyber liability insurance policy may be insufficient to cover all losses that the Company may incur in connection with an unauthorized disclosure of non-public information.
The Company’s coverage under its cyber liability insurance policy may be insufficient to cover all losses that the Company may incur in connection with an unauthorized disclosure of non-public information.
Such an event could potentially result in a breach of contract, and any required notifications could result in, among other things, the loss of customers, negative publicity, distraction of management, fines, lawsuits for breach of contract, regulatory inquiries or involvement and a decline in sales. 16 The Company seeks to mitigate the financial risk associated with unauthorized disclosure of non-public information by maintaining cyber liability insurance coverage.
Such an event could potentially result in a breach of contract, and any required notifications could result in, among other things, the loss of customers, negative publicity, distraction of management, fines, lawsuits for breach of contract, regulatory inquiries or involvement and a decline in sales.
The Company’s title insurance subsidiaries are subject to regulations by the CFPB, created by the Dodd-Frank Act. The CFPB has extensive regulatory and enforcement authority over real estate and mortgage markets, including RESPA, the primary federal regulatory guidance governing the real estate settlement industry.
The CFPB has extensive regulatory and enforcement authority over real estate and mortgage markets, including RESPA, the primary federal regulatory guidance governing the real estate settlement industry.
The manner and extent to which the CFPB will implement new regulations is not fully known; however, any new regulations implemented could result in changes to internal processes, including changes to systems and forms. 13 In addition to federal regulation, title insurance subsidiaries are subject to state regulations.
The manner and extent to which the CFPB will implement new regulations is not fully known; however, any new regulations implemented could result in changes to internal processes, including changes to systems and forms. Leadership transitions at the CFPB under the new presidential administration may result in changes that could affect the title insurance industry.
Although the federal funds rate does not directly impact mortgage interest rates, it can have a significant influence as lenders pass on the costs of rate increases to consumers.
The Company could also be impacted by the governmental responses to such circumstances, such as the Federal Open Market Committee (“FOMC”) of the Federal Reserve raising the target federal funds rate. Although the federal funds rate does not directly impact mortgage interest rates, it can have a significant influence as lenders pass on the costs of rate increases to consumers.
Changes in the economic or regulatory environments in these states could have an adverse impact on the Company. North Carolina, Texas, South Carolina and Georgia are the largest sources of premium revenue for the Company’s title insurance subsidiaries. In 2023, these states represented 37.4%, 27.0%, 9.3% and 6.8% of total premiums written by the Company, respectively.
The Company relies upon the North Carolina, Texas, South Carolina, Georgia and Florida markets for a significant portion of its premiums. Changes in the economic or regulatory environments in these states could have an adverse impact on the Company. North Carolina, Texas, South Carolina, Georgia, and Florida are the largest sources of premium revenue for the Company’s title insurance subsidiaries.
The Company’s net income is affected by the extent to which its actual claims experience differs from the assumptions used in establishing the reserve for claims. The reserve for claims is established based on actuarial estimates of future payments for reported claims, as well as claims which have been incurred but not yet reported.
The reserve for claims is established based on actuarial estimates of future payments for reported claims, as well as claims which have been incurred but not yet reported.
Given the unpredictable nature of these events with respect to size, severity, duration and geographic location, it is not currently possible to quantify the ultimate impact that they may have on the Company’s business. 17 RISKS RELATED TO OWNING THE COMPANY’S COMMON STOCK Certain provisions in the Company’s organizational law, North Carolina law, organizational documents, and the Company’s shareholder rights plan may deter or discourage a takeover of the Company.
Given the unpredictable nature of these events with respect to size, severity, duration and geographic location, it is not currently possible to quantify the ultimate impact that they may have on the Company’s business.
The Company could be affected by these events in various ways, including but not limited to fluctuations in its investment portfolio and potential decreases in net premiums written. The Company could also be impacted by the governmental responses to such circumstances, such as the Federal Open Market Committee (“FOMC”) of the Federal Reserve raising the target federal funds rate.
These situations could exacerbate market volatility and economic uncertainty. The Company could be affected by these events in various ways, including but not limited to fluctuations in its investment portfolio and potential decreases in net premiums written.
There is no guarantee the Company, whether through the Federal Deposit Insurance Corporation or otherwise, would recover the funds it has deposited should one or more of the financial institutions at which the Company maintains deposits fail. 15 RISKS RELATED TO CYBERSECURITY, TECHNOLOGY AND RISK MANAGEMENT Breaches and failures of, and other disruptions to, information technology systems of the Company or its service providers may disrupt the Company’s operations, result in monetary losses and harm the Company’s reputation.
There is no guarantee the Company, whether through the Federal Deposit Insurance Corporation or otherwise, would recover the funds it has deposited should one or more of the financial institutions at which the Company maintains deposits fail.
Misappropriation of funds by any of these parties could result in title claims, some of which could be large and have a material negative impact on the Company’s results of operations and financial condition. 11 The Company relies upon the North Carolina, Texas, South Carolina and Georgia markets for a significant portion of its premiums.
Agents and approved attorneys typically handle large sums of money in trust pursuant to the closing of real estate transactions. Misappropriation of funds by any of these parties could result in title claims, some of which could be large and have a material negative impact on the Company’s results of operations and financial condition.
Underwriting agents and approved settlement providers, which can include issuing agents and approved attorneys, perform a significant portion of the work necessary to issue the Company’s title insurance policies. These agents and providers operate with a substantial degree of independence from the Company, subject to certain contractual limitations.
Higher mortgage interest rates have historically had a negative impact on the demand and pricing of real estate. The Company may experience material losses resulting from fraud, defalcation or misconduct. Underwriting agents and approved settlement providers, which can include issuing agents and approved attorneys, perform a significant portion of the work necessary to issue the Company’s title insurance policies.
Removed
Demand for title insurance also depends in part upon the requirement by mortgage lenders and other participants in the secondary mortgage market that title insurance policies be obtained on residential and commercial real property.
Added
Adverse deviation of actual claims experience from expected claims experience will result in lower net earnings. The Company’s net income is affected by the extent to which its actual claims experience differs from the assumptions used in establishing the reserve for claims.
Removed
Higher mortgage interest rates have historically had a negative impact on the demand and pricing of real estate, which has and could continue to adversely affect the Company’s operations and financial condition.
Added
In addition to federal regulation, title insurance subsidiaries are subject to state regulations.
Removed
Net premiums written for the Company decreased during certain periods of 2023 due to an overall decline in the level of real estate transaction volumes resulting from higher average mortgage interest rates. The Company may experience material losses resulting from fraud, defalcation or misconduct.
Added
Changes being proposed and implemented by the new presidential administration are expected to fundamentally alter the size and scope of the federal government through reduction of the federal work force and the potential reduction, change in direction or possible elimination of, various government agencies and programs.
Removed
Agents and approved attorneys typically handle large sums of money in trust pursuant to the closing of real estate transactions.
Added
The new presidential administration is proposing and seeking to implement significant changes to the size and scope of the federal government.
Removed
Some of these markets, like the overall real estate market, experienced during 2023, and may continue to experience, an overall decline in the level of real estate transaction volumes resulting from higher average mortgage interest rates. Adverse deviation of actual claims experience from expected claims experience will result in lower net earnings.
Added
These changes may include reductions to government funding of various programs and agencies, alteration of the payment systems it uses, changes in policy direction, reduction and possible elimination of various federal agencies and bureaus and reduction of the overall federal government workforce.
Added
These changes, if implemented and taken as a whole, appear unprecedented and may have impacts on the economy as a whole or different regions or segments of the economy or asset classes which are difficult to predict at this time. Accordingly, it is possible that such comprehensive changes could adversely affect the Company’s results of operations and financial condition.
Added
RISKS RELATED TO CYBERSECURITY, TECHNOLOGY AND RISK MANAGEMENT Breaches and failures of, and other disruptions to, information technology systems of the Company or its service providers may disrupt the Company’s operations, result in monetary losses and harm the Company’s reputation.
Added
The Company seeks to mitigate the financial risk associated with unauthorized disclosure of non-public information by maintaining cyber liability insurance coverage. As cybercriminals continue to become more sophisticated, the costs to insure against cyberattacks have risen and may continue to rise in the future.
Added
RISKS RELATED TO OWNING THE COMPANY’S COMMON STOCK Certain provisions in the Company’s organizational law, North Carolina law, organizational documents, and the Company’s shareholder rights plan may deter or discourage a takeover of the Company.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese policies serve as a foundation for secure operations, outlining best practices and compliance standards for our employees. The Company recognizes the crucial role of employees in maintaining a secure environment and conducts regular cybersecurity training programs.
Biggest changeThe Company also employs systems and processes designed to oversee and identify cybersecurity threats associated with third-party vendors. The Company has established robust IT policies and procedures governing the use, access, and protection of our digital assets. These policies serve as a foundation for secure operations, outlining best practices and compliance standards for our employees.
Senior manage ment, including our CISO, periodically briefs the Board of Directors on our cybersecurity framework and assessments of the information security program, key and emerging threats and risks, the status of projects to strengthen our information security systems, and any cybersecurity incidents that could potentially have a material business impact.
Senior manage ment periodically briefs the Board of Directors on our cybersecurity framework and assessments of the information security program, key and emerging threats and risks, the status of projects to strengthen our information security systems, and any cybersecurity incidents that could potentially have a material business impact.
In the event of an incident, the Company would follow a detailed incident response plan, which outlines the steps to be followed, including notification of senior management and the Board of Directors, as appropriate. Our CISO has 25 years of experience in the cybersecurity and technology space.
In the event of an incident, the Company would follow a detailed incident response plan, which outlines the steps to be followed, including notification of senior management and the Board of Directors, as appropriate. Our CISO has more than 25 years of experience in the cybersecurity and technology space.
Our Data Security Committee is composed of key business and functional stakeholders to include Risk, Legal, Finance, IT, Operations, and Business line leads.
Our Data Security Committee is composed of key business and functional stakeholders including Risk, Legal, Finance, IT, Operations, and Business line leads.
Key elements of our risk management and control framework include Information Technology (“IT”) policies and procedures, employee training, annual disaster recovery tests, and penetration tests performed by third-party experts. The Company has established robust IT policies and procedures governing the use, access, and protection of our digital assets.
Our risk management strategy encompasses a range of policies, procedures, and controls designed to safeguard our information assets. Key elements of our risk management and control framework include Information Technology (“IT”) policies and procedures, employee training, annual disaster recovery tests, and penetration tests performed by third-party experts.
These initiatives are designed to empower our staff with the knowledge and skills necessary to identify and respond to potential threats, reducing the risk of human error in cybersecurity matters. To test the preparedness of our operations in the face of unforeseen events, the Company conducts annual disaster recovery tests.
The Company recognizes the crucial role of employees in maintaining a secure environment and conducts regular cybersecurity training programs. These initiatives are designed to empower our staff with the knowledge and skills necessary to identify and respond to potential threats, reducing the risk of human error in cybersecurity matters.
The Company’s IT systems have been, and likely will continue to be, the target of computer viruses, cyberattacks, phishing attacks, and other malicious activity.
The Company regularly reviews and updates its cyber insurance coverage to align with the evolving nature of c yber threats and industry standards. The Company’s IT systems have been, and likely will continue to be, the target of computer viruses, cyberattacks, phishing attacks, and other malicious activity.
These tests are intended to simulate real-world cyber-attacks, allowing us to identify vulnerabilities and address them proactively. The Company’s planned investments in cybersecurity include implementing advanced data loss prevention measures, encryption protocols, and continuous monitoring to safeguard sensitive information and mitigate the risk of unauthorized access or disclosure.
The Company’s planned investments in cybersecurity include implementing advanced data loss prevention measures, encryption protocols, and continuous monitoring to safeguard sensitive information and mitigate the risk of unauthorized access or disclosure. As part of the Company’s risk management strategy, it has secured comprehensive cyber insurance coverage.
The Company’s Chief Information Security Officer (“CISO”), in concert with a Data Security Committee, is responsible for developing and implementing our enterprise information security program and reporting cybersecurity matters to senior management. 18 Our risk management strategy encompasses a range of policies, procedures, and controls designed to safeguard our information assets.
The Company’s Chief Information Security Officer (“CISO”), in concert with a Data Security Committee, is responsible for developing and implementing our enterprise information security program and reporting cybersecurity matters to senior management. T he company's enterprise information security program adheres to the National Institute of Standards and Technology (NIST) Cybersecurity Framework 2.0 and other relevant industry frameworks as necessary.
These tests evaluate our ability to recover critical systems and data in the event of a disruption, contributing to our overall business continuity and risk mitigation efforts. As part of our commitment to maintaining a strong defense against cyber threats, the Company engages third-party experts to conduct regular penetration tests on our network.
As part of our commitment to maintaining a strong defense against cyber threats, the Company engages third-party experts to conduct regular penetration tests on our network. These tests are intended to simulate real-world cyber-attacks, allowing us to identify vulnerabilities and address them proactively.
Removed
As part of the Company’s risk management strategy, it has secured comprehensive cyber insurance coverage. The Company regularly reviews and updates its cyber insurance coverage to align with the evolving nature of c yber threats and industry standards.
Added
To test the preparedness of our operations in the face of unforeseen events, the Company conducts annual disaster recovery tests. These tests evaluate our ability to recover critical systems and data in the event of a disruption, contributing to our overall business continuity and risk mitigation efforts.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeThe Company’s subsidiaries, principally ITIC and NITIC, lease office space throughout North Carolina, South Carolina, Texas, Michigan, Florida, Georgia and Nebraska. The Company believes that each of the office facilities occupied by the Company and its subsidiaries are in good condition, adequately insured and sufficient for its present operations.
Biggest changeThe Company’s subsidiaries, principally ITIC and NITIC, lease office space throughout North Carolina, South Carolina, Texas, Michigan, Florida, Georgia and Nebraska. The Company believes that each of the office facilities occupied by the Company and its subsidiaries are in good condition, adequately insured and sufficient for its present operations. 19

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table provides information about purchases by the Company (and all affiliated purchasers), during the quarter ended December 31, 2023, of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act: Issuer Purchases of Equity Securities (unrounded) Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Maximum Number of Shares that May Yet Be Purchased Under the Plan (1) Beginning of period 420,216 October 1 through October 31, 2023 — $ — — 420,216 November 1 through November 30, 2023 — — — 420,216 December 1 through December 31, 2023 — — — 420,216 Total — $ — — 420,216 (1) On November 9, 2015, the Board of Directors of the Company approved the purchase of an additional 163,335 shares pursuant to the Company’s repurchase plan, such that there was authority remaining under the plan to purchase up to an aggregate of 500,000 shares of the Company’s common stock pursuant to the plan immediately after this approval.
Biggest changeThe following table provides information about purchases by the Company (and all affiliated purchasers), during the quarter ended December 31, 2024, of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act: Issuer Purchases of Equity Securities (unrounded) Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Maximum Number of Shares that May Yet Be Purchased Under the Plan (1) Beginning of period 413,177 October 1 through October 31, 2024 — $ — — 413,177 November 1 through November 30, 2024 — — — 413,177 December 1 through December 31, 2024 — — — 413,177 Total — $ — — 413,177 (1) On November 9, 2015, the Board of Directors of the Company approved the purchase of an additional 163,335 shares pursuant to the Company’s repurchase plan, such that there was authority remaining under the plan to purchase up to an aggregate of 500,000 shares of the Company’s common stock pursuant to the plan immediately after this approval.
The Company anticipates making further purchases under this plan from time to time in the future, depending on such factors as the prevailing market price of the Company’s common stock, the Company’s available cash and the existing alternative uses for such cash. ITEM 6. [Reserved]
The Company anticipates making further purchases under this plan from time to time in the future, depending on such factors as the prevailing market price of the Company’s common stock, the Company’s available cash and the existing alternative uses for such cash.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Data and Dividends The common stock of the Company is traded under the symbol “ITIC” on the Nasdaq Stock Market LLC. The number of record holders of common stock at December 31, 2023 was 209.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Data and Dividends The common stock of the Company is traded under the symbol “ITIC” on the Nasdaq Stock Market LLC. The number of record holders of common stock at December 31, 2024 was 199.
During the quarter and year ended December 31, 2023, the Company purchased 0 and 7,000 shares of common stock under the Company’s repurchase plan, respectively. As of December 31, 2023, there was authority remaining under the plan to purchase up to an aggregate of 420,216 shares of the Company’s common stock.
During the quarter and year ended December 31, 2024, the Company purchased 0 and 7,039 shares of common stock under the Company’s repurchase plan, respectively. As of December 31, 2024, there was authority remaining under the plan to purchase up to an aggregate of 413,177 shares of the Company’s common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

90 edited+12 added−6 removed95 unchanged
Biggest changeThe decrease in 2023, compared with 2022, was primarily attributable to an overall decline in the level of real estate transaction volumes resulting from higher average mortgage interest rates and ongoing housing inventory constraints. 27 The following is a schedule of net premiums written in select states in which the Company’s two insurance subsidiaries, ITIC and NITIC, currently underwrite title insurance: State (in thousands) 2023 2022 North Carolina $ 64,143 $ 88,777 Texas 46,308 72,278 South Carolina 16,023 23,454 Georgia 11,731 22,954 All Others 33,307 41,987 Premiums Written 171,512 249,450 Reinsurance Assumed — — Reinsurance Ceded (354) (818) Net Premiums Written $ 171,158 $ 248,632 Escrow and Other Title-Related Fees Escrow and other title-related fees consists primarily of commission income, escrow and other various fees associated with the issuance of a title insurance policy including settlement, examination and closing fees.
Biggest changeThe increase in 2024, compared with 2023, was primarily driven by increased activity levels, which were influenced by ongoing expansion initiatives and lower average mortgage interest rates, and appreciation in average home prices. 28 The following is a schedule of net premiums written in select states in which the Company’s two insurance subsidiaries, ITIC and NITIC, currently underwrite title insurance: State (in thousands) 2024 2023 North Carolina $ 70,380 $ 64,143 Texas 56,985 46,308 South Carolina 17,940 16,023 Georgia 15,463 11,731 Florida 14,704 6,778 All Others 28,881 26,529 Premiums Written 204,353 171,512 Reinsurance Assumed — — Reinsurance Ceded (89) (354) Net Premiums Written $ 204,264 $ 171,158 Title insurance rates vary by state and are subject to extensive regulation.
Any impairment that is not credit-related is recognized in other comprehensive income (loss), net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses (“ACL”) in the Consolidated Balance Sheets, limited to the amount by which the amortized cost basis exceeds the estimated fair value, with a corresponding adjustment to earnings.
Any impairment that is not credit-related is recognized in other comprehensive (loss) income, net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses (“ACL”) in the Consolidated Balance Sheets, limited to the amount by which the amortized cost basis exceeds the estimated fair value, with a corresponding adjustment to earnings.
Real estate activity is affected by a number of factors, including the availability of mortgage credit, the cost of real estate, consumer confidence, employment and family income levels, and general United States economic conditions. Interest rate volatility is also an important factor in the level of residential and commercial real estate activity.
Real estate activity is affected by a number of factors, including the availability of mortgage credit, the cost of real estate, consumer confidence, employment and family income levels, and general United States economic conditions. Interest rate volatility is also an important factor in the level of residential and commercial real estate activity.
Net Realized Investment Gains and Losses - Dispositions of equity securities at a realized gain or loss reflect such factors as industry sector allocation decisions, ongoing assessments of issuers’ business prospects and tax planning considerations. Additionally, the amounts included in net investment gains (losses) are affected by assessments of securities’ valuation for impairment.
Net Realized Investment Gains and Losses - Dispositions of equity securities at a realized gain or loss reflect such factors as industry sector allocation decisions, ongoing assessments of issuers’ business prospects and tax planning considerations. Additionally, the amounts included in net investment gains are affected by assessments of securities’ valuation for impairment.
Because of the uncertainty of future claims, changes in economic conditions and the fact that many claims do not materialize for several years, reserve estimates are subject to variability. Changes from prior periods in the expected liability for claims reflect the uncertainty of the claims environment, as well as the limited predictive power of historical data.
Because of the uncertainty of future claims, changes in economic conditions and the fact that many claims do not materialize for several years, reserve estimates are subject to variability. 31 Changes from prior periods in the expected liability for claims reflect the uncertainty of the claims environment, as well as the limited predictive power of historical data.
Despite the variability of such estimates, management believes that, based on historical claims experience and actuarial analysis, the Company’s reserve for claims is adequate to cover claim losses resulting from pending and future claims for policies issued through December 31, 2023. The ultimate settlement of claims will likely vary from the reserve estimates included in the accompanying Consolidated Financial Statements.
Despite the variability of such estimates, management believes that, based on historical claims experience and actuarial analysis, the Company’s reserve for claims is adequate to cover claim losses resulting from pending and future claims for policies issued through December 31, 2024. The ultimate settlement of claims will likely vary from the reserve estimates included in the accompanying Consolidated Financial Statements.
Expenses typically associated with premiums, including agent commissions, premium taxes, and a provision for future claims are recognized concurrent with recognition of related premium revenue. 24 Total premiums include an estimate of premiums for policies that have been issued directly and by agents, but not reported to the Company as of the balance sheet date.
Expenses typically associated with premiums, including agent commissions, premium taxes, and a provision for future claims are recognized concurrent with recognition of related premium revenue. 25 Total premiums include an estimate of premiums for policies that have been issued directly and by agents, but not reported to the Company as of the balance sheet date.
The slight increase in office and technology expenses in 2023, compared with 2022, was primarily due to an increase in technology expenses partially offset by a decline in office expenses. Other Expenses: Other expenses primarily include business development expenses, premium-related taxes and licensing, professional services, title and service fees, amortization of intangible assets and other general expenses.
The slight increase in office and technology expenses in 2024, compared with 2023, was primarily due to an increase in technology expenses partially offset by a decline in office expenses. Other Expenses: Other expenses primarily include business development expenses, premium-related taxes and licensing, professional services, title and service fees, amortization of intangible assets and other general expenses.
The total reserve for all losses incurred but unpaid as of December 31, 2023 is represented by the reserve for claims totaling $37.1 million in the Consolidated Balance Sheets included in Item 8 of this Annual Report on Form 10-K (the “Consolidated Balance Sheets”).
The total reserve for all losses incurred but unpaid as of December 31, 2024 is represented by the reserve for claims totaling $37.1 million in the Consolidated Balance Sheets included in Item 8 of this Annual Report on Form 10-K (the “Consolidated Balance Sheets”).
The Company believes it is more likely than not that the tax benefits associated with recognized impairments and unrecognized losses recorded through December 31, 2023 will be realized. However, this judgment could be impacted by further market fluctuations.
The Company believes it is more likely than not that the tax benefits associated with recognized impairments and unrecognized losses recorded through December 31, 2024 will be realized. However, this judgment could be impacted by further market fluctuations.
Regulatory Environment The FOMC issues disclosures on a periodic basis that include projections of the federal funds rate and expected actions. The FO MC maintained a target range between 0.00% and 0.25% from March 2020 until March 2022.
Regulatory Environment The FOMC issues disclosures on a periodic basis that include projections of the federal funds rate and expected actions. The FOMC maintained a target range between 0.00% and 0.25% from March 2020 until March 2022.
The total of undiscounted future minimum lease payments under leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 2023 is $4.3 million, which includes lease payments related to options to extend or cancel the lease term if the Company determined at the date of adoption that the lease was expected to be renewed or extended.
The total of undiscounted future minimum lease payments under leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 2024 is $4.4 million, which includes lease payments related to options to extend or cancel the lease term if the Company determined at the date of adoption that the lease was expected to be renewed or extended.
If one or more of the variables or assumptions used changed such that the Company’s recorded loss ratio, or loss provision as a percentage of net title premiums, increased or decreased three loss ratio percentage points, the impact on after-tax income for the year ended December 31, 2023 would be as follows: (in thousands) Increase in loss ratio of three percentage points $ (4,056) Decrease in loss ratio of three percentage points $ 4,056 Company management believes that using a sensitivity of three loss percentage points for the loss ratio provides a reasonable benchmark for analysis of the calendar year loss provision of the Company based on historical loss ratios by year.
If one or more of the variables or assumptions used changed such that the Company’s recorded loss ratio, or loss provision as a percentage of net title premiums, increased or decreased three loss ratio percentage points, the impact on after-tax income for the year ended December 31, 2024 would be as follows: (in thousands) Increase in loss ratio of three percentage points $ (4,841) Decrease in loss ratio of three percentage points $ 4,841 Company management believes that using a sensitivity of three loss percentage points for the loss ratio provides a reasonable benchmark for analysis of the calendar year loss provision of the Company based on historical loss ratios by year.
The Company monitors any events or changes in circumstances that may have had a significant adverse effect on the fair value of real estate investments and makes any necessary adjustments, with any reductions in the carrying amount of these investments recorded in net realized investment gains in the Consolidated Statement of Operations when recognized.
The Company monitors any events or changes in circumstances that may have had a significant adverse effect on the fair value of real estate investments and makes any necessary adjustments, with any reductions in the carrying amount of these investments recorded in net investment gains in the Consolidated Statements of Operations when recognized.
Contractual Obligations : As of December 31, 2023, the Company had a claims reserve totaling $37.1 million. The amounts and timing of these obligations are estimated and not set contractually.
Contractual Obligations : As of December 31, 2024, the Company had a claims reserve totaling $37.1 million. The amounts and timing of these obligations are estimated and not set contractually.
As of December 31, 2023, both ITIC and NITIC met the minimum capital, surplus and reserve requirements for each state in which they are licensed.
As of December 31, 2024, both ITIC and NITIC met the minimum capital, surplus and reserve requirements for each state in which they are licensed.
The Company anticipates making further purchases under this plan from time to time in the future, depending on such factors as the prevailing market price of the Company’s common stock, the Company’s available cash and the existing alternative uses for such cash. Capital Expenditures : Capital expenditures were approximately $9.2 million and $5.7 million during 2023 and 2022, respectively.
The Company anticipates making further purchases under this plan from time to time in the future, depending on such factors as the prevailing market price of the Company’s common stock, the Company’s available cash and the existing alternative uses for such cash. Capital Expenditures : Capital expenditures were approximately $7.4 million and $9.2 million during 2024 and 2023, respectively.
Of that total, approximately $2.9 million was reserved for specific claims which have been reported to the Company, and approximately $34.3 million was reserved for IBNR claims. A provision for estimated future claims payments is recorded at the time the related policy revenue is recorded. The Company records the claims provision estimate as a percentage of net premiums written.
Of that total, approximately $2.7 million was reserved for specific claims which have been reported to the Company, and approximately $34.4 million was reserved for IBNR claims. A provision for estimated future claims payments is recorded at the time the related policy revenue is recorded. The Company records the claims provision estimate as a percentage of net premiums written.
Total dividends paid per share were $5.84 and $4.84 in 2023 and 2022, respectively. The Company maintains a high degree of liquidity within its investment portfolio in the form of cash, short-term investments, and other readily marketable securities.
Total dividends paid per share were $15.84 and $5.84 in 2024 and 2023, respectively. The Company maintains a high degree of liquidity within its investment portfolio in the form of cash, short-term investments, and other readily marketable securities.
Cash held by the Company for these purposes was approximately $28.2 million and $24.2 million as of December 31, 2023 and 2022, respectively. These amounts are not considered assets of the Company and, therefore, are excluded from the Consolidated Balance Sheets. However, the Company remains contingently liable for the disposition of these deposits.
Cash held by the Company for these purposes was approximately $55.0 million and $28.2 million as of December 31, 2024 and 2023, respectively. These amounts are not considered assets of the Company and, therefore, are excluded from the Consolidated Balance Sheets. However, the Company remains contingently liable for the disposition of these deposits.
Cash flows provided by operating activities differ from net income due to adjustments for non-cash items, such as changes in the estimated fair value of equity security investments, gains and losses on investments and property, the timing of disbursements for taxes, claims and other accrued liabilities, and collections or changes in receivables and other assets. 31 Cash flows from non-operating activities have historically consisted of purchases and proceeds from investing activities, the issuance of dividends and repurchases of common stock.
Cash flows provided by operating activities differ from net income due to adjustments for non-cash items, such as gains and losses on investments and property, the timing of disbursements for taxes, claims and other accrued liabilities, and collections or changes in receivables and other assets. 32 Cash flows from non-operating activities have historically consisted of purchases and proceeds from investing activities, the issuance of dividends and repurchases of common stock.
Exchange services revenue includes earnings on these deposits; therefore, investment income is shown as non-title services rather than investment income. These like-kind exchange funds are primarily invested in money market and other short-term investments. External assets under management of Investors Trust Company totaled approximately $663.9 million and $635.3 million as of December 31, 2023 and 2022, respectively.
Exchange services revenue includes earnings on these deposits; therefore, investment income is shown as non-title services rather than investment income. These like-kind exchange funds are primarily invested in money market and other short-term investments. 34 External assets under management of Investors Trust Company totaled approximately $707.8 million and $663.9 million as of December 31, 2024 and 2023, respectively.
Refer to Note 3 to the Consolidated Financial Statements for further information about the Company’s valuation techniques. 25 Deferred Taxes The Company recorded net deferred tax liabilities at December 31, 2023 and 2022.
Refer to Note 3 to the Consolidated Financial Statements for further information about the Company’s valuation techniques. 26 Deferred Taxes The Company recorded net deferred tax liabilities at December 31, 2024 and 2023.
The Company believes that its significant working capital position and management of operating expenses will aid its ability to manage cash resources through fluctuations in the real estate market. Cash Flows: Net cash flows provided by operating activities were $7.4 million and $36.2 million for 2023 and 2022, respectively.
The Company believes that its significant working capital position and management of operating expenses will aid its ability to manage cash resources through fluctuations in the real estate market. Cash Flows: Net cash flows provided by operating activities were $29.8 million and $7.4 million for 2024 and 2023, respectively.
As of December 31, 2023, approximately $113.0 million of the consolidated shareholders’ equity represented net assets of the Company’s subsidiaries that are restricted by regulation from being transferred in the form of dividends, loans or advances to the parent company without prior approval from the respective state insurance department.
As of December 31, 2024, approximately $118.2 million of the consolidated shareholders’ equity represented net assets of the Company’s subsidiaries that are restricted by regulation from being transferred in the form of dividends, loans or advances to the parent company without prior approval from the respective state insurance department.
The Company believes, however, that amounts available for transfer from the insurance and other subsidiaries are adequate to meet the Company’s current operating needs. During 2024, the maximum distributions the insurance subsidiaries can make to the Company without prior approval from applicable regulators total approximately $17.5 million.
The Company believes, however, that amounts available for transfer from the insurance and other subsidiaries are adequate to meet the Company’s current operating needs. During 2025, the maximum distributions the insurance subsidiaries can make to the Company without prior approval from applicable regulators total approximately $24.8 million.
The amounts accrued for these agreements at December 31, 2023 and 2022 were approximately $15.2 million and $15.0 million, respectively, which includes postretirement compensation and health benefits, and were calculated based on the terms of the contracts. These executive contracts are accounted for on an individual contract basis.
The amounts accrued for these agreements at December 31, 2024 and 2023 were approximately $15.4 million and $15.2 million, respectively, which include postretirement compensation and health benefits, and were calculated based on the terms of the contracts. These executive contracts are accounted for on an individual contract basis.
On a consolidated basis, personnel expenses as a percentage of total revenues were 34.1% and 30.1% in 2023 and 2022, respectively. Office and Technology Expenses: Office and technology expenses primarily include facilities expenses, software and hardware expenses, depreciation expense, telecommunications expenses, and business insurance. Office and technology expenses were $17.4 million and $17.3 million for 2023 and 2022, respectively.
On a consolidated basis, personnel expenses as a percentage of total revenues were 28.1% and 34.1% in 2024 and 2023, respectively. Office and Technology Expenses: Office and technology expenses primarily include facilities expenses, software and hardware expenses, depreciation expense, telecommunications expenses, and business insurance. Office and technology expenses were $17.5 million and $17.4 million for 2024 and 2023, respectively.
Like-kind exchange deposits and reverse exchange property held by the Company for the purpose of completing such transactions totaled approximately $263.7 million and $432.0 million as of December 31, 2023 and 2022, respectively. These exchange deposits are held at third-party financial institutions.
Like-kind exchange deposits and reverse exchange property held by the Company for the purpose of completing such transactions totaled approximately $323.5 million and $263.7 million as of December 31, 2024 and 2023, respectively. These exchange deposits are held at third-party financial institutions.
The effective income tax rates for both 2023 and 2022 differ from the U.S. federal statutory income tax rate of 21% primarily due to the effects of deferred tax adjustments, tax credits, tax-exempt income and state taxes, all of which lowered the effective tax rate.
The effective income tax rates for both 2024 and 2023 differ from the U.S. federal statutory income tax rate of 21% primarily due to the effects of deferred tax adjustments, tax credits, tax-exempt income and state taxes.
Adjustments may be required as new information develops which often varies from past experience. Income Taxes The provision for income taxes was $4.5 million and $6.2 million for 2023 and 2022, respectively. Income tax expense, including federal and state taxes, as a percentage of income before income taxes was 17.3% and 20.6% for 2023 and 2022, respectively.
Adjustments may be required as new information develops which often varies from past experience. Income Taxes The provision for income taxes was $8.4 million and $4.5 million for 2024 and 2023, respectively. Income tax expense, including federal and state taxes, as a percentage of income before income taxes was 21.3% and 17.3% for 2024 and 2023, respectively.
Net Investment Gains (Losses) Net investment gains (losses) include realized gains and losses on the sale of investment securities and changes in the estimated fair value of equity security investments. Net investment gains (losses) were $3.4 million and $(11.2) million in 2023 and 2022, respectively.
Net Investment Gains Net investment gains include realized gains and losses on the sale of investment securities and changes in the estimated fair value of equity security investments. Net investment gains were $4.7 million and $3.4 million in 2024 and 2023, respectively.
As a result of the interaction of these factors and considerations, the net realized investment gain or loss can vary significantly from period to period. The net realized investment gains were $15.6 million for 2023, compared with $9.7 million for 2022.
As a result of the interaction of these factors and considerations, the net realized investment gain or loss can vary significantly from period to period. The net realized investment gains were $5.0 million for 2024, compared with $15.6 million for 2023.
Securities purchased may include a combination of taxable or tax-exempt fixed maturity securities and equity securities. The Company also invests in short-term investments that typically include money market funds, U.S. Treasury bills, commercial paper and certificates of deposit. The Company strives to maintain a high quality investment portfolio.
Securities purchased may include a combination of taxable or tax-exempt fixed maturity securities and equity securities. The Company also invests in short-term investments that typically include money market funds, U.S. Treasury bills, commercial paper and certificates of deposit.
The Company is carefully monitoring inflation, geopolitical and military conflicts, and other trends that could potentially result in material adverse liquidity changes, and will continually assess its capital allocation strategy, including decisions relating to payment of dividends, repurchasing the Company’s common stock and/or conserving cash. 32 Purchase of Company Stock : On November 9, 2015, the Board of Directors of the Company approved the purchase of an additional 163,335 shares pursuant to the Company’s repurchase plan, such that there was authority remaining under the plan to purchase up to an aggregate of 500,000 shares of the Company’s common stock pursuant to the plan immediately after this approval.
The Company is carefully monitoring inflation, changes in market conditions and the regulatory environment resulting from changes in the U.S. presidential administrations and control of Congress, geopolitical and military conflicts, and other trends that could potentially result in material adverse liquidity changes, and will continually assess its capital allocation strategy, including decisions relating to payment of dividends, repurchasing the Company’s common stock and/or conserving cash. 33 Purchase of Company Stock: On November 9, 2015, the Board of Directors of the Company approved the purchase of an additional 163,335 shares pursuant to the Company’s repurchase plan, such that there was authority remaining under the plan to purchase up to an aggregate of 500,000 shares of the Company’s common stock pursuant to the plan immediately after this approval.
The Federal Open Market Committee (“FOMC”) of the Federal Reserve has been highly attentive to the risks that these events have created, and in response raised the target federal funds rate at several meetings held during 2022 and 2023.
The Federal Open Market Committee (“FOMC”) of the Federal Reserve has been highly attentive to the risks that these events have created, and in response adjusted the target federal funds rate at several meetings held from 2022 to 2024.
Other investment income was $3.8 million in 2023, compared with $3.9 million in 2022. Changes in other investment income are impacted by fluctuations in the carrying value of the underlying investment and/or distributions received.
Other investment income was $2.6 million in 2024, compared with $3.8 million in 2023. Changes in other investment income are impacted by fluctuations in the carrying value of the underlying investment and/or distributions received.
Actual payments of claims, net of recoveries, were $4.8 million and $3.8 million in 2023 and 2022, respectively. 30 Reserve for Claims: At December 31, 2023, the total reserve for claims was $37.1 million. Of that total, approximately $2.9 million was reserved for specific claims, and approximately $34.3 million was reserved for claims for which the Company had no notice.
Actual payments of claims, net of recoveries, were $4.6 million and $4.8 million in 2024 and 2023, respectively. Reserve for Claims: At December 31, 2024, the total reserve for claims was $37.1 million. Of that total, approximately $2.7 million was reserved for specific claims, and approximately $34.4 million was reserved for claims for which the Company had no notice.
In 2023, purchase activity accounted for 80.8% of all mortgage originations and is projected in the MBA Forecast to represent 76.5% of all mortgage originations in 2024. According to data published by Freddie Mac, the average 30-year fixed mortgage interest rates in the United States were 6.8% and 5.3% for the years ended December 31, 2023 and 2022, respectively.
In 2024, purchase activity accounted for 72.4% of all mortgage originations and is projected in the MBA Forecast to represent 67.8% of all mortgage originations in 2025. According to data published by Freddie Mac, the average 30-year fixed mortgage interest rates in the United States were 6.7% and 6.8% for the years ended December 31, 2024 and 2023, respectively.
The Company’s title insurance premiums in future periods are likely to fluctuate due to these and other factors which are beyond management’s control. 21 Exchange Services The Company’s exchange services division, consisting of the operations of ITEC and ITAC, provides customer services in connection with tax-deferred real property exchanges.
The Company’s title insurance premiums in future periods are likely to fluctuate due to these and other factors which are beyond management’s control. 22 Exchange Services The Company’s exchange services division, consisting of the operations of Investors Title Exchange Corporation (“ITEC”) and Investors Title Accommodation Corporation (“ITAC”), provides customer services in connection with tax-deferred real property exchanges.
Starting at the March 2022 meeting of the FOMC, the FOMC consistently raised the target federal funds rate range through July 2023, when the FOMC increased the target range to between 5.25% and 5.50%. No additional changes to the target federal funds rate have been made since the July 2023 meeting.
Starting at the March 2022 meeting of the FOMC, the FOMC consistently raised the target federal funds rate range through July 2023, when the FOMC increased the target range to between 5.25% and 5.50%.
Total revenues from the title segment accounted for 89.4% of the Company’s revenues in 2023. Through ITIC and NITIC, the Company underwrites land title insurance for owners and mortgagees as a primary insurer. Title insurance protects against loss or damage resulting from title defects that affect real property and customarily arising prior to the policy date.
Through ITIC and NITIC, the Company underwrites land title insurance for owners and mortgagees as a primary insurer. Title insurance protects against loss or damage resulting from title defects that affect real property and customarily arising prior to the policy date.
The average effective maturity of the majority of the fixed maturity securities is less than 10 years. The Company’s invested assets are managed to fund its obligations and evaluated to ensure long term stability of capital accounts. As the Company generates cash from operations, it is invested in accordance with the Company’s investment policy and corporate goals.
The Company’s invested assets are managed to fund its obligations and evaluated to ensure long term stability of capital accounts. As the Company generates cash from operations, it is invested in accordance with the Company’s investment policy and corporate goals.
Title insurance companies typically issue title insurance policies directly or through title agencies. Following is a breakdown of net premiums generated by direct and agency operations for the years ended December 31, 2023 and 2022, with certain balances for 2022 reclassified to conform to the 2023 presentation.
Title insurance companies typically issue title insurance policies directly or through title agencies. Following is a breakdown of net premiums generated by direct and agency operations for the years ended December 31, 2024 and 2023.
The provision for claims reflects actual payments of claims, net of recovery amounts, plus adjustments to the specific and incurred but not reported claims reserves, the latter of which are actuarially determined based on historical claims experience.
Title claims are typically reported and paid within the first several years of policy issuance. The provision for claims reflects actual payments of claims, net of recovery amounts, plus adjustments to the specific and incurred but not reported claims reserves, the latter of which are actuarially determined based on historical claims experience.
In normal economic situations, future adjustments to the FOMC’s stance of monetary policy are expected to be based on realized and expected economic developments to achieve maximum employment and inflation near the FOMC 's symmetric long-term 2.0% objective. 22 Real Estate Environment The Mortgage Bankers Association's (“MBA”) January 19, 2024 Mortgage Finance Forecast (“MBA Forecast”) projects 2024 purchase activity to increase 15.9% to $1,536 billion and refinance activity to increase 50.0% to $471 billion, resulting in an increase in total mortgage originations of 22.5% to $2,007 billion, all from 2023 levels.
In normal economic situations, future adjustments to the FOMC’s stance of monetary policy are expected to be based on realized and expected economic developments to achieve maximum employment and inflation near the FOMC's symmetric long-term 2.0% objective. 23 Real Estate Environment The Mortgage Bankers Association's (“MBA”) January 19, 2025 Mortgage Finance Forecast (“MBA Forecast”) projects 2025 purchase activity to increase 8.1% to $1,392 billion and refinance activity to increase 34.4% to $660 billion, resulting in an increase in total mortgage originations of 15.3% to $2,052 billion, all from 2024 levels.
In the Company's direct operations, the Company issues a title insurance policy and retains the entire premium, as no commissions are recognized in connection with these policies. Net premiums written from direct operations decreased 32.2% in 2023 to $58.1 million, compared with $85.7 million in 2022.
In the Company's direct operations, the Company issues a title insurance policy and retains the entire premium, as no commissions are recognized in connection with these policies. Net premiums written from direct operations increased 4.4% in 2024 to $60.6 million, compared with $58.1 million in 2023.
Such commitments are not expected to have a material adverse effect on the Company’s liquidity. 33 Off-Balance Sheet Arrangements As a service to its customers, the Company, through ITIC, administers escrow and trust deposits representing earnest money received under real estate contracts, undisbursed amounts received for settlement of mortgage loans and indemnities against specific title risks.
Off-Balance Sheet Arrangements As a service to its customers, the Company, through ITIC, administers escrow and trust deposits representing earnest money received under real estate contracts, undisbursed amounts received for settlement of mortgage loans and indemnities against specific title risks.
Other revenues were virtually unchanged at $1.0 million in 2023, compared with $1.1 million for 2022. 29 Expenses The Company's operating expenses consist primarily of commissions to agents, personnel expenses, office and technology expenses and the provision for claims.
Other revenues were virtually unchanged at $947 thousand in 2024, compared with $991 thousand for 2023. 30 Expenses The Company's operating expenses consist primarily of commissions to agents, personnel expenses, office and technology expenses and the provision for claims.
Changes in the Estimated Fair Value of Equity Security Investments - Changes in the estimated fair value of equity security investments were $(12.2) million in 2023 and $(21.0) million in 2022.
Changes in the Estimated Fair Value of Equity Security Investments - Changes in the estimated fair value of equity security investments were $(318) thousand in 2024 and $(12.2) million in 2023.
(in thousands, except percentages) 2023 % 2022 % Title Insurance $ 187,333 94.4 $ 242,280 95.7 Exchange Services 2,414 1.2 2,588 1.0 All Other 8,773 4.4 8,416 3.3 Total $ 198,520 100.0 $ 253,284 100.0 Total Company Personnel Expenses : Personnel expenses include base salaries, benefits and payroll taxes, bonuses paid to employees and contract labor expenses.
(in thousands, except percentages) 2024 % 2023 % Title Insurance $ 207,189 94.7 $ 187,333 94.4 Exchange Services 2,665 1.2 2,414 1.2 All Other 8,981 4.1 8,773 4.4 Total $ 218,835 100.0 $ 198,520 100.0 Total Company Personnel Expenses : Personnel expenses include base salaries, benefits and payroll taxes, bonuses paid to employees and contract labor expenses.
As the most recent claims experience develops and new information becomes available, the loss reserve estimate related to prior periods will change to more accurately reflect updated and improved emerging data. The Company reflects any adjustments to the reserve in the results of operations in the period in which new information (principally claims experience) becomes available.
As the most recent claims experience develops and new information becomes available, the loss reserve estimate related to prior periods will change to more accurately reflect updated and improved emerging data.
Personnel expenses were $76.7 million and $85.3 million for 2023 and 2022, respectively. Personnel expenses decreased by 10.1% in 2023, compared with 2022, primarily due to reductions in incentive compensation and reductions in staffing levels. Employee headcount decreased by 12.8%, when compared to the same prior year period, primarily due to the Company's cost saving measures.
Personnel expenses were $72.5 million and $76.7 million for 2024 and 2023, respectively. Personnel expenses decreased by 5.5% in 2024, compared with 2023, primarily due to lower staffing levels. Employee headcount decreased by 3.7%, when compared to the same prior year period, primarily due to the Company's cost saving measures.
Information regarding leases can be found in Note 9 to the Consolidated Financial Statements. In the normal course of business, the Company enters into other contractual commitments for goods and services needed for operations.
Information regarding leases can be found in Note 9 to the Consolidated Financial Statements. In the normal course of business, the Company enters into other contractual commitments for goods and services needed for operations. Such commitments are not expected to have a material adverse effect on the Company’s liquidity.
Non-title services revenue, investment-related revenues and other revenues are discussed separately below. Net Premiums Written Net premiums written decreased 31.2% in 2023 to $171.2 million, compared with $248.6 million in 2022.
Non-title services revenue, investment-related revenues and other revenues are discussed separately below. Net Premiums Written Net premiums written increased 19.3% in 2024 to $204.3 million, compared with $171.2 million in 2023.
The loss provision rate is set to provide for losses on current year policies and changes in prior year estimates. Management also considers actuarial analyses in evaluating the claims reserve.
The estimated development of large claims by policy year is, therefore, subject to significant changes as experience develops. The loss provision rate is set to provide for losses on current year policies and changes in prior year estimates. Management also considers actuarial analyses in evaluating the claims reserve.
(in thousands, except percentages) 2023 % 2022 % Title Insurance $ 200,937 89.4 $ 269,004 94.9 Exchange Services 13,467 6.0 8,082 2.9 All Other 10,346 4.6 6,306 2.2 Total $ 224,750 100.0 $ 283,392 100.0 Title Insurance Revenues Title insurance revenues include net premiums written and escrow and other title-related income that includes escrow fees, commissions and settlement fees.
(in thousands, except percentages) 2024 % 2023 % Title Insurance $ 235,487 91.2 $ 200,937 89.4 Exchange Services 11,104 4.3 13,467 6.0 All Other 11,707 4.5 10,346 4.6 Total $ 258,298 100.0 $ 224,750 100.0 Title Insurance Revenues Title insurance revenues include net premiums written and escrow and other title-related income that includes escrow fees, commissions and settlement fees.
Refer to Note 3 to the Consolidated Financial Statements for further information about the Company’s investments in equity securities. Other Investments: Other investments consist of investments in real estate and unconsolidated affiliated entities, typically structured as limited liability companies ("LLCs"), without readily determinable fair values. Real estate investments are reported at amortized cost.
Other Investments: Other investments consist of investments in real estate and unconsolidated affiliated entities, typically structured as limited liability companies ("LLCs"), without readily determinable fair values. Real estate investments are reported at amortized cost.
In 2023, the Company had higher investment purchase activity, higher levels of proceeds from investment sales activity and higher dividends paid when compared to 2022. In the fourth quarters of 2023 and 2022, the Company paid special cash dividends in the amounts of $4.00 and $3.00 per share, respectively, in addition to regular cash dividends.
In 2024, the Company distributed more dividends while reducing investment purchase activity and generating lower proceeds from investment sales and maturities, compared to 2023. In the fourth quarters of 2024 and 2023, the Company paid special cash dividends in the amounts of $14.00 and $4.00 per share, respectively, in addition to regular cash dividends.
These transactions include reverse exchanges when taxpayers decide to acquire replacement property before selling the relinquished property, or “build to suit” exchanges, when improvements must be made to the replacement property before the taxpayer acquires the improved replacement property. The services provided by the Company’s exchange services division, ITEC and ITAC, are pursuant to provisions in the IRC.
These transactions include reverse exchanges when taxpayers decide to acquire replacement property before selling the relinquished property, or “build to suit” exchanges, when improvements must be made to the replacement property before the taxpayer acquires the improved replacement property.
(in thousands, except percentages) 2023 % 2022 % Direct $ 58,063 33.9 $ 85,676 34.5 Agency 113,095 66.1 162,956 65.5 Total $ 171,158 100.0 $ 248,632 100.0 Direct Net Premiums : The Company's direct business consists of operations at the home office, branch offices, and wholly owned title insurance agencies.
(in thousands, except percentages) 2024 % 2023 % Direct $ 60,626 29.7 $ 58,063 33.9 Agency 143,638 70.3 113,095 66.1 Total $ 204,264 100.0 $ 171,158 100.0 Direct Net Premiums : The Company's direct business consists of operations at the home office, branch offices, and wholly owned title insurance agencies.
Results of Operations The following table presents certain Consolidated Statements of Operations data for the years ended December 31, 2023 and 2022: For the Years Ended December 31, (in thousands) 2023 2022 Revenues: Net premiums written $ 171,158 $ 248,632 Escrow and other title-related fees 17,109 22,314 Non-title services 19,237 13,931 Interest and dividends 9,055 4,704 Other investment income 3,752 3,896 Net investment gains (losses) 3,448 (11,226) Other 991 1,141 Total Revenues 224,750 283,392 Operating Expenses: Commissions to agents 83,374 121,566 Provision for claims 4,762 4,255 Personnel expenses 76,706 85,331 Office and technology expenses 17,359 17,323 Other expenses 16,319 24,809 Total Operating Expenses 198,520 253,284 Income before Income Taxes 26,230 30,108 Provision for Income Taxes 4,544 6,205 Net Income $ 21,686 $ 23,903 26 Revenues The following is a summary of the Company’s total revenue broken out between the title insurance segment, exchange services segment and all other income with intersegment, eliminations netted with each segment; therefore, the individual segment amounts will not agree to Note 12 in the accompanying Consolidated Financial Statements.
Results of Operations The following table presents certain Consolidated Statements of Operations data for the years ended December 31, 2024 and 2023: For the Years Ended December 31, (in thousands) 2024 2023 Revenues: Net premiums written $ 204,264 $ 171,158 Escrow and other title-related fees 17,954 17,109 Non-title services 17,193 19,237 Interest and dividends 10,657 9,055 Other investment income 2,600 3,752 Net investment gains 4,683 3,448 Other 947 991 Total Revenues 258,298 224,750 Operating Expenses: Commissions to agents 107,343 83,374 Provision for claims 4,530 4,762 Personnel expenses 72,513 76,706 Office and technology expenses 17,505 17,359 Other expenses 16,944 16,319 Total Operating Expenses 218,835 198,520 Income before Income Taxes 39,463 26,230 Provision for Income Taxes 8,390 4,544 Net Income $ 31,073 $ 21,686 27 Revenues The following is a summary of the Company’s total revenue broken out between the title insurance segment, exchange services segment and all other income with intersegment eliminations netted with each segment; therefore, the individual segment amounts will not agree to Note 12 in the accompanying Consolidated Financial Statements.
Agency net premiums written decreased 30.6% in 2023 to $113.1 million, compared with $163.0 million in 2022.
Agency net premiums written increased 27.0% in 2024 to $143.6 million, compared with $113.1 million in 2023.
Refer to Note 3 in the accompanying Consolidated Financial Statements for the major categories of investments, scheduled maturities, amortized costs, estimated fair values of investment securities and earnings by security category.
The increase in 2024 primarily related to elevated levels of interest income, predominantly influenced by the amount of fixed maturity securities held, interest rates, and general market performance. Refer to Note 3 in the accompanying Consolidated Financial Statements for the major categories of investments, scheduled maturities, amortized costs, estimated fair values of investment securities and earnings by security category.
The securities in the Company’s investment portfolio are subject to economic conditions and market risks. The Company considers relevant facts and circumstances in evaluating whether a credit or interest-related impairment of a fixed maturity security has occurred. Relevant facts and circumstances include the extent and length of time the fair value of an investment has been below cost.
Management believes unrealized losses on the remaining fixed maturity securities at December 31, 2024 are not credit-related. The securities in the Company’s investment portfolio are subject to economic conditions and market risks. The Company considers relevant facts and circumstances in evaluating whether a credit or interest-related impairment of a fixed maturity security has occurred.
Investments in Equity Securities: Equity securities represent ownership interests held by the Company in entities for investment purposes. Unrealized holding gains and losses are reported in the Consolidated Statements of Operations as net investment gains (losses). Realized investment gains and losses from sales are recorded on the trade date and are determined using the specific identification method.
Investments in Equity Securities: Equity securities represent ownership interests held by the Company in entities for investment purposes. Realized gains and losses on the sale of investment securities and changes in the estimated fair value of equity security investments are reported in the Consolidated Statements of Operations as net investment gains.
In 2023, escrow and other title-related fee revenue decreased 23.3% to $17.1 million, compared with $22.3 million in 2022, primarily due to the decline in real estate transactions volume. Revenue from Non-Title Services Revenue from non-title services includes trust services, agency management services and exchange services income.
In 2024, escrow and other title-related fee revenue increased 4.9% to $18.0 million, compared with $17.1 million in 2023, primarily due to an increase in real estate activity levels. Revenue from Non-Title Services Revenue from non-title services includes trust services, agency management services and exchange services income.
As of December 31, 2023, the Company held cash and cash equivalents of $24.0 million, short-term investments of $110.2 million, available-for-sale fixed maturity securities of $63.8 million and equity securities of $37.2 million. The net effect of all activities on total cash and cash equivalents was a decrease of $11.3 million for 2023.
As of December 31, 2024, the Company held cash and cash equivalents of $24.7 million, short-term investments of $59.1 million, available-for-sale fixed maturity securities of $113.0 million and equity securities of $39.9 million. The net effect of all activities on total cash and cash equivalents was an increase of $623 thousand for 2024.
Due to the small volume of large claims, the long-tail nature of title insurance claims and the inherent uncertainty in loss emergence patterns, large claim activity can vary significantly between policy years. The estimated development of large claims by policy year is, therefore, subject to significant changes as experience develops.
Management defines a large loss as one where incurred losses exceed $500,000. Due to the small volume of large claims, the long-tail nature of title insurance claims and the inherent uncertainty in loss emergence patterns, large claim activity can vary significantly between policy years.
Changes in either of these areas, in addition to any inventory constraints or volatility in the cost and availability of building materials, could impact the Company's results of operations in future periods. A recent period of inflation, as well as ongoing geopolitical and military conflicts, have created additional volatile market conditions and uncertainties in the global economy.
Changes in either of these areas, in addition to any inventory constraints or volatility in the cost and availability of building materials, could impact the Company's results of operations in future periods.
There are a number of risks and uncertainties inherent in the process of monitoring impairments and determining if an impairment exists.
Relevant facts and circumstances include the extent and length of time the fair value of an investment has been below cost. There are a number of risks and uncertainties inherent in the process of monitoring impairments and determining if an impairment exists.
Investment Related Revenues Investment related revenues include interest and dividends, other investment income, and net investment gains (losses). Interest and Dividends The Company derives a substantial portion of its income from investments in short-term investments, fixed maturity securities, which are primarily municipal and corporate fixed maturity securities, and equity securities.
Interest and Dividends The Company derives a substantial portion of its income from investments in short-term investments, fixed maturity securities, which are primarily corporate and municipal fixed maturity securities, and equity securities. The Company’s investment policy is designed to comply with regulatory requirements and to balance the competing objectives of asset quality and investment returns.
Commission expense as a percentage of net premiums written by agents was 73.7% and 74.6% in 2023 and 2022, respectively. The decrease in commission expense, when comparing 2023 with 2022, was commensurate with the decrease in agent premium volume. Commission rates vary by market due to local practice, competition and state regulations.
In 2024, commissions to agents increased 28.7% to $107.3 million, compared with $83.4 million in 2023. Commission expense as a percentage of net premiums written by agents was 74.7% and 73.7% in 2024 and 2023, respectively. The increase in commission expense, when comparing 2024 with 2023, was commensurate with the increase in agent premium volume.
Per the MBA Forecast, mortgage interest rates are projected to decrease in subsequent periods, reaching 5.5% in 2025. Due to the rapidly changing environment brought on by inflationary pressures, inventory constraints, geopolitical and military conflicts and COVID-19, these projections and the impact of actual future developments on the Company could be subject to material change.
Due to the rapidly changing environment brought on by inflationary pressures, inventory constraints, geopolitical and military conflicts, and changes in government regulations and policy, including as a result of the recent change in presidential administration, these projections and the impact of actual future developments on the Company could be subject to material change.
Provision for Claims : The provision for claims increased 11.9% in 2023, compared to 2022. The provision for claims as a percentage of net premiums written was 2.8% and 1.7% in 2023 and 2022, respectively.
Commission rates vary by market due to local practice, competition and state regulations. Provision for Claims : The provision for claims decreased 4.9% in 2024, compared to 2023. The provision for claims as a percentage of net premiums written was 2.2% and 2.8% in 2024 and 2023, respectively.
These forward-looking statements are based on certain assumptions and expectations of future events that are subject to a number of risks and uncertainties. Actual results may vary.
These forward-looking statements are based on certain assumptions and expectations of future events that are subject to a number of risks and uncertainties. Actual results may vary. See the sections in this Annual Report on Form 10-K titled “Safe Harbor and Forward-Looking Statements” and “Risk Factors” included in Part I, Item 1A that could affect forward-looking statements.
Interest and investment income levels are primarily a function of general market performance, interest rates and the amount of cash available for investment. The increase in 2023 primarily related to an increase in interest received in conjunction with higher interest rates.
The Company strives to maintain a high quality investment portfolio. 29 Interest and dividends were $10.7 million in 2024, compared with $9.1 million in 2023. Interest and investment income levels are primarily a function of general market performance, interest rates and the amount of cash available for investment.
Fixed maturity securities totaling approximately $6.7 million at December 31, 2023 and 2022, were deposited with the insurance departments of the states in which business is conducted. The Company’s investment strategy emphasizes after-tax income and principal preservation. The Company’s investments are primarily in short-term investments and fixed maturity securities and, to a lesser extent, equity securities.
The Company’s investment strategy emphasizes after-tax income and principal preservation. The Company’s investments are primarily in fixed maturity securities and short-term investments and, to a lesser extent, equity securities. The average effective maturity of the majority of the fixed maturity securities is less than 10 years.
Pursuant to the Company’s ongoing purchase program, the Company purchased 7,000 shares at an average per share price of $137.00 and 945 shares at an average per share price of $141.01 in 2023 and 2022, respectively.
Unless terminated earlier by resolution of the Board of Directors, the plan will expire when all shares authorized for purchase under the plan have been purchased. Pursuant to the Company’s ongoing purchase program, the Company purchased 7,039 shares at an average price of $155.95 and 7,000 shares at an average per share price of $137.00 in 2024 and 2023, respectively.
The net realized gains in 2023 and 2022 included impairment charges of $201 thousand and $172 thousand, respectively, for certain fixed maturity securities where the intent to hold had changed. Management believes unrealized losses on the remaining fixed maturity securities at December 31, 2023 are not credit-related.
The net realized gains in 2024 and 2023 included impairment charges of $74 thousand and $201 thousand, respectively, for certain fixed maturity securities where the intent to hold had changed. There was also an impairment charge of $309 thousand in 2024 related to a write-down of other assets and investments.

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