What changed in INVESTORS TITLE CO's 2023 10-K compared to 2022?

Across the narrative sections we track, INVESTORS TITLE CO (ITIC) added 198 paragraphs, removed 204, and edited 171 between the 2022 and 2023 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+106/−115), Item 1A. Risk Factors (+47/−49), Item 1. Business (+42/−37).

Did INVESTORS TITLE CO add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 47 new/edited paragraphs and 49 removed paragraphs versus the 2022 10-K.

What changed in INVESTORS TITLE CO's MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 106 new/edited paragraphs and 115 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Where does this ITIC 10-K diff come from?

The source filings are INVESTORS TITLE CO's official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in INVESTORS TITLE CO's 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of INVESTORS TITLE CO's 2022 and 2023 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 2023 report.

+198 added−204 removedSource: 10-K (2024-03-15) vs 10-K (2023-03-14)

Top changes in INVESTORS TITLE CO's 2023 10-K

198 paragraphs added · 204 removed · 171 edited across 4 sections

Item 7. Management's Discussion & Analysis+106 / −115 · 94 edited
Item 1A. Risk Factors+47 / −49 · 38 edited
Item 1. Business+42 / −37 · 36 edited
Item 5. Market for Registrant's Common Equity+3 / −3 · 3 edited

Item 1. Business

Business — how the company describes what it does

36 edited+6 added−1 removed60 unchanged

2022 filing

2023 filing

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.

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.

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.

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.

INVESTMENT POLICIES The Company and its subsidiaries derive a substantial portion of their income from investments in municipal and 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.

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.

ITEC acts as a qualified intermediary in tax-deferred exchanges of real property held for productive use in a trade or business or for investment, and its income is derived from fees for handling exchange transactions and interest earned on client deposits held by the Company.

ITEC acts as a qualified intermediary in tax-deferred exchanges of real property held for productive use in a trade or business or for investment, and its income is derived from fees for handling exchange transactions and a portion of the interest earned on client deposits held by the Company.

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.

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.

In 1993, he was named Treasurer of the Company and served in that capacity until 1997. In 1997, he was named Executive Vice President and Secretary of the Company. In 1999, he was appointed as a Director of the Company. He is the son of J. Allen Fine and the brother of James A. Fine, Jr. 10

Such risks include title being vested in an individual or entity other than the insured, lack of a right of access to the property, invalidity or unenforceability of the insured mortgage, or other liens or encumbrances that make the property unmarketable.

Such risks may include title being vested in an individual or entity other than the insured, lack of a right of access to the property, invalidity or unenforceability of the insured mortgage, or other liens or encumbrances that make the property unmarketable.

The securities in the Company’s portfolio are subject to economic conditions and normal market risks. Equity securities at December 31, 2022 and 2021 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, 2022 or 2021.

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.

At December 31, 2022, 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, 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.

Executive Officers of the Company Following is information regarding the executive officers of the Company as of February 21, 2023. 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, 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.

NITIC was incorporated in South Carolina in 1973, and is licensed to write title insurance 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. NITIC currently writes title insurance as a primary insurer in Texas , and as a reinsurer for ITIC.

In addition, at December 31, 2022 and 2021, 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, 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).

ITIC currently writes title insurance as a primary insurer in 22 states and the District of Columbia, primarily located in the eastern half of the United States, and as a reinsurer for NITIC and third-party title insurance companies.

ITIC currently writes title insurance as a primary insurer in 21 states and the District of Columbia, primarily located in the eastern half of the United States, and as a reinsurer for NITIC and third-party title insurance companies.

In the alternative, the insurer may opt to pay the policy limits to the insured or, if the loss is less than the policy limits, the amount of the insured’s actual loss due to such title defects, at which time the insurer’s duty to defend the claim and all other obligations of the insurer with respect to the claim are satisfied.

In the alternative, the insurer may opt to pay the policy limits to the insured or, if the loss is less than the policy limits, the amount of the insured’s actual loss due to such title defects as defined by the policy, at which time the insurer’s duty to defend the claim and all other obligations of the insurer with respect to the claim are satisfied.

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, a majority of the Company’s title insurance commitments and policies are issued directly. In Texas, South Carolina, Georgia and other states, title policies are primarily issued through issuing agents.

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.

Short-term investments, which consist primarily of money market funds and US 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.

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.

The four largest title insurance companies typically maintain greater than 80% of the market for title insurance in the United States, with smaller regional companies holding the balance of the market. The number and size of competing companies varies in the respective geographic areas in which the Company conducts business.

COMPETITION The title insurance industry is highly competitive. The four largest title insurance companies typically maintain greater than 80% of the market for title insurance in the United States, with smaller regional companies holding the balance of the market. The number and size of competing companies varies in the respective geographic areas in which the Company conducts business.

Refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 12 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K (the “Consolidated Financial Statements”) for additional information related to the revenues, income and assets attributable to the Company’s primary operating segment.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 12 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K (the “Consolidated Financial Statements”) for additional information related to the revenues, income and assets attributable to the Company’s operating segments.

EMPLOYEES AND HUMAN CAPITAL The Company and its subsidiaries had 626 full-time employees and 29 part-time employees as of December 31, 2022. None of the employees are covered by any collective bargaining agreements. Management considers its relationship with its employees to be favorable. 9 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 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.

Name Age Position with Registrant J. Allen Fine 88 Chief Executive Officer and Chairman of the Board James A. Fine, Jr. 60 President, Treasurer, Chief Financial Officer, Chief Accounting Officer and Director W. Morris Fine 56 Executive Vice President, Secretary and Director J.

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.

The title search documents the current status of title to the property. There are two basic types of title insurance policies – one for the mortgage lender and one for the real property owner.

Title Insurance Policies: The Company issues title insurance policies based on a search of public records. The title search documents the current status of title to the property. There are two basic types of title insurance policies – one for the mortgage lender and one for the real property owner.

OVERVIEW OF THE BUSINESS The Company’s primary business activity, and its only reportable operating segment, is the issuance of residential and commercial title insurance through ITIC and NITIC.

OVERVIEW OF THE BUSINESS The Company has two reportable segments. The Company’s primary business activity, and one of its reportable operating segments, is the issuance of residential and commercial title insurance through ITIC and NITIC.

ITMS offers various consulting and management services to provide clients with the technical expertise to start and successfully operate a title insurance agency.

ITMS offers various consulting and management services to provide clients with the technical expertise to start and successfully operate a title insurance agency. Investors Trust provides investment management and trust services to individuals, companies, banks and trusts.

Title insurance may also protect against deeds or mortgages that were forged or improperly acknowledged or delivered, that were executed by spouses without the other spouse’s signature or that were conveyed by minors or other persons who lack legal capacity. Title Insurance Policies: The Company issues title insurance policies based on a search of public records.

Title insurance may also protect against deeds or mortgages in the insured’s chain of title that were forged or improperly acknowledged or delivered, that were executed by spouses without the other spouse’s signature or that were conveyed by minors or other persons who lack legal capacity.

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.

From time to time, these laws are subject to review and changes, which may negatively affect the demand for tax-deferred exchanges in general, and consequently, the revenues and profitability of the Company’s exchange services division. Investors Trust provides investment management and trust services to individuals, companies, banks and trusts.

From time to time, these laws are subject to review and changes, which may negatively affect the demand for tax-deferred exchanges in general, and consequently, the revenues and profitability of the Company’s exchange services division. Management Services, Investment Management and Trust Services The Company’s other lines of business include services offered by wholly owned subsidiaries ITMS and Investors Trust.

Title Insurance 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.

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.

Although the Company regularly monitors such proposals, the likelihood and timing of passage of any such regulation, and the possible effects of any such regulation on the Company and its subsidiaries, cannot be determined at this time. Certain laws and regulations, such as the cybersecurity requirements of governmental authorities, require the Company to maintain certain information security standards and practices.

Additionally, the Company provides (i) tax-deferred real property exchange services through its subsidiaries, Investors Title Exchange Corporation (“ITEC”) and Investors Title Accommodation Corporation (“ITAC”); (ii) investment management and trust services to individuals, trusts and other entities through its subsidiary Investors Trust Company (“Investors Trust”); and (iii) management services to title insurance agencies through its subsidiary, Investors Title Management Services (“ITMS”).

Additionally, the Company provides management services to title insurance agencies through its subsidiary, Investors Title Management Services (“ITMS”), and investment management and trust services to individuals, trusts and other entities through its subsidiary Investors Trust Company (“Investors Trust”). Refer to “Item 7.

Exchange Services, Investment Management and Trust Services, and Management Services The Company’s other lines of business include services offered by wholly owned subsidiaries ITEC, ITAC, Investors Trust, and ITMS. In 1988, the Company established ITEC to provide services in connection with tax-deferred exchanges of like-kind property pursuant to §1031 of the Internal Revenue Code of 1986, as amended (the “IRC”).

In 1988, the Company established ITEC to provide services in connection with tax-deferred exchanges of like-kind property pursuant to §1031 of the Internal Revenue Code of 1986, as amended (the “IRC”).

CUSTOMER AND LENDER CONCENTRATION The Company is not dependent upon any single title insurance customer or a few customers, and the loss of any single customer would not have a material adverse effect on the Company.

Exchange services are not a regulated industry; there is no market data available regarding the Company’s market position in this industry. CUSTOMER AND LENDER CONCENTRATION The Company is not dependent upon any single customer or a few customers, and the loss of any single customer would not have a material adverse effect on the Company.

The commitments and policies are predominantly issued using standard forms approved by the American Land Title Association (“ALTA”). Title insurance protects against losses resulting from title defects affecting real property. Upon a real estate closing, the seller of real property executes a deed to the new owner, and typically, the property is encumbered with a new mortgage.

Certain laws and regulations, such as the cyber security requirements of governmental authorities, require the Company to maintain certain information security standards and practices. 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.

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.

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. REGULATION Any material change in the Company’s regulatory environment may have an adverse effect on its business.

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.

Refinance activity is generally less seasonal, but is subject to interest rate fluctuations. 7 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.

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.

Removed

Exchange Services, Investment Management and Trust Services, and Management Services Investors Trust is regulated by the North Carolina Commissioner of Banks. 8 COMPETITION The title insurance industry is highly competitive.

Added

The Company’s second reportable operating segment is providing tax-deferred real property exchange services through its subsidiaries, Investors Title Exchange Corporation (“ITEC”) and Investors Title Accommodation Corporation (“ITAC”).

Added

Upon a real estate closing, the seller of real property executes a deed to the new owner, and typically, the property is encumbered with a new mortgage.

Added

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.

Added

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

ITEC and ITAC both provide services to taxpayers pursuant to Internal Revenue Service regulations that provide taxpayers a safe harbor by using a qualified intermediary to structure tax-deferred exchanges of property and using an exchange accommodation titleholder to hold property in reverse exchange transactions. Investors Trust is regulated by the North Carolina Commissioner of Banks.

Added

Competition for ITEC and ITAC comes from other title insurance companies and agents, banks, attorneys, and other independently-owned, qualified intermediaries that offer exchange services. Key elements that affect competition are price, expertise, timeliness and quality of service and the financial strength and size of the exchange service provider.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

38 edited+9 added−11 removed59 unchanged

2022 filing

2023 filing

Biggest changeThese events have impacted and could continue to impact the Company in a number of ways including, but not limited to, future fluctuations in the Company's investment portfolio and potential decreases in net premiums written.

Biggest changeThe 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.

Also, the Company’s results of operations and financial condition could be adversely affected if it is unsuccessful in attracting and retaining new agents. 12 Mortgage lending is highly concentrated and changes in relationships with lenders or reform of government-sponsored entities could adversely affect the Company.

Also, the Company’s results of operations and financial condition could be adversely affected if it is unsuccessful in attracting and retaining new agents. Mortgage lending is highly concentrated and changes in relationships with lenders or reform of government-sponsored entities could adversely affect the Company.

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. 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. 13 In addition to federal regulation, title insurance subsidiaries are subject to state regulations.

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.

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.

The demand for the Company’s title insurance and other real estate transaction products and services varies from year to year and is dependent upon, among other factors, the volume of residential and commercial real estate transactions and mortgage financing transactions.

The demand for the Company’s title insurance, exchange services, and other real estate transaction products and services varies from year to year and is dependent upon, among other factors, the volume of residential and commercial real estate transactions and mortgage financing transactions.

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 insurance 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. 14 The Company relies on distributions from its subsidiaries .

Some of these markets, like the overall real estate market, experienced during 2022 and may continue to experience, an overall decline in the level of real estate transaction volumes resulting from higher average mortgage interest rates. 11 Adverse deviation of actual claims experience from expected claims experience will result in lower net earnings.

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.

For example, net premiums written for the Company decreased during certain periods of 2022 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.

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.

Unrealized holding gains and losses on equity securities are reported in the Consolidated Statements of Operations as changes in the estimated fair value of equity security investments, 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.

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.

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 and could have a material adverse effect on the Company’s results of operations.

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.

Higher mortgage interest rates have and could continue to negatively impact the demand and pricing of real estate, which has and could continue to adversely affect the Company’s operations and financial condition.

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.

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. 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.

As of December 31, 2022, approximately $110.3 million of consolidated 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, 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.

The Company’s investment portfolio is subject to risk from changes in general economic conditions, prices of marketable fixed maturity securities and equity securities, interest rates, liquidity, credit markets, and other external factors.

The Company’s investment policy is designed to comply with regulatory requirements and to balance the competing objectives of asset quality and investment returns. The Company’s investment portfolio is subject to risk from changes in general economic conditions, prices of marketable fixed maturity securities and equity securities, interest rates, liquidity, credit markets, and other external factors.

In addition, the Company’s ability to pay dividends may be constrained by business considerations, such as the impact of dividends on insurer ratings or competitive position.

In addition, the Company’s ability to pay dividends may be constrained by business considerations, such as the impact of dividends on insurer ratings or competitive position. These dividend restrictions could limit the Company’s ability to pay dividends to its shareholders or fund growth opportunities.

In 2022, these states represented 35.6%, 29.0%, 9.4% and 9.2% 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.

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.

Furthermore, government-sponsored entities, the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), often require the purchase of title insurance for home loans they securitize. Changes by these regulatory entities could impact the entire mortgage loan process and as a result, could impact the demand for title insurance.

Technological changes in the title insurance industry are driven primarily by evolution in technology, competitive factors and regulatory changes. These changes have resulted in faster information delivery and efficient, highly automated production processes. The inability of the Company to manage, develop or successfully implement new systems or technological changes could negatively impact profitability.

Insurance holding companies are subject to periodic examinations and the regulation of acquisitions, intercompany transactions and changes in control, among other regulations, by state regulators.

Insurance holding companies are subject to periodic examinations and the regulation of acquisitions, intercompany transactions and changes in control, among other regulations, by state regulators. The Company and its subsidiaries are also subject to certain federal regulations established by the Office of the Comptroller of Currency, the Federal Reserve and various other governmental agencies.

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.

The Company relies upon the North Carolina, Texas, South Carolina and Georgia 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 and Georgia are the largest sources of premium revenue for the Company’s title insurance subsidiaries.

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 has policies and procedures in place to help identify, analyze, and measure the risks associated with the issuance of title insurance policies, investment risks, interest rate risks and legal risks, among others. In evaluating risks, the Company considers enterprise risk management, information technology risk management, disaster recovery, business continuity, and vendor risk management.

Policies and procedures for the mitigation of risk may not be sufficient. The Company has policies and procedures in place to help identify, analyze, and measure the risks associated with the issuance of title insurance policies, investment risks, interest rate risks and legal risks, among others.

Real estate activity generally decreases when the economy is weak or uncertain, home prices are increasing, housing inventory is limited, the availability of mortgage credit is limited, or mortgage interest rates are increasing. The cyclical nature of the Company’s business has caused volatility in revenue and profitability in the past and could do so in the future.

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.

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.

These provisions are described in further detail in “Description of the Company’s Securities” incorporated by reference as Exhibit 4.1 to this Annual Report on Form 10-K. 17 The Company’s Bylaws provide that, unless the Company consents in writing to the selection of an alternative forum, the state courts of North Carolina will be the sole and exclusive forum for substantially all disputes between the Company’s and its shareholders.

The Company’s Bylaws provide that, unless the Company consents in writing to the selection of an alternative forum, the state courts of North Carolina will be the sole and exclusive forum for substantially all disputes between the Company’s and its shareholders.

Any of these events could disrupt operations both internally and externally, which may result in the loss of revenues.

Any of these events could disrupt operations both internally and externally, which may result in the loss of revenues. These events could also result in the unauthorized release of proprietary and/or non-public information, or even defalcation of corporate or client funds.

Best Company and Demotech, Inc. The ratings issued by independent rating agencies are not credit ratings, but represent the opinion of the individual rating agency regarding the title insurance subsidiaries’ financial strength, operating performance, and ability to meet policyholder obligations.

The ratings issued by independent rating agencies are not credit ratings, but represent the opinion of the individual rating agency regarding the title insurance subsidiaries’ financial strength, operating performance, and ability to meet policyholder obligations. These insurer ratings are subject to periodic review and there can be no assurance that the Company’s insurance subsidiaries will maintain their current respective ratings.

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.

Because a significant degree of judgment is involved with the establishment of policies and processes as well as the measurement of risks, it is possible not all risks have been identified or anticipated. Misidentified or unanticipated risks could adversely impact the Company and its results of operations.

In evaluating risks, the Company considers enterprise risk management, information technology risk management, disaster recovery, business continuity, and vendor risk management. Because a significant degree of judgment is involved with the establishment of policies and processes as well as the measurement of risks, it is possible not all risks have been identified or anticipated.

These events could also result in the unauthorized release of proprietary and/or non-public information, or even defalcation of corporate or client funds. 15 Like all companies, 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.

Like all companies, 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.

A downgrade from a rating agency could result in a loss of underwriting business. The competitive positions of title insurance companies rely partly on ratings published by independent rating services. Government-sponsored entities and lending institutions utilize these ratings, among other items, to evaluate a title insurer’s strength and stability. The Company’s title insurance subsidiaries are currently rated by A.M.

Government-sponsored entities and lending institutions utilize these ratings, among other items, to evaluate a title insurer’s strength and stability. The Company’s title insurance subsidiaries are currently rated by A.M. Best Company and Demotech, Inc.

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.

As a result of acquisition activity, the Company has goodwill and other intangible assets that comprise approximately 5.2% of total assets as of December 31, 2022. Quarterly, the Company performs an impairment analysis that reviews changes in events or circumstances that could lead to the carrying value not being recoverable.

Quarterly, the Company performs an impairment analysis that reviews changes in events or circumstances that could lead to the carrying value not being recoverable.

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.

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.

Competition among the major providers of title insurance or the acceptance of alternative products to traditional title products by the regulatory authorities and the marketplace could adversely affect the Company’s operations and financial condition. The Company may encounter difficulties managing growth, which could adversely affect its operating results.

Competition among the major providers of title insurance or the acceptance of alternative products to traditional title products by the regulatory authorities and the marketplace could adversely affect the Company’s operations and financial condition. Competition for exchange services comes from other title insurance companies and agents, banks, attorneys, and other independently-owned, qualified intermediaries that offer exchange services.

These dividend restrictions could limit the Company’s ability to pay dividends to its shareholders or fund growth opportunities. 14 RISKS RELATED TO INVESTMENTS AND DEPOSITS Deterioration in financial markets may cause a decline in the performance of the Company’s investments and could have a material adverse impact on net income.

RISKS RELATED TO INVESTMENTS AND DEPOSITS Deterioration in financial markets may cause a decline in the performance of the Company’s investments and could have a material adverse impact on net income. The Company derives a substantial portion of its income from its investment portfolio that primarily includes fixed maturity securities, equity securities and short-term investments.

Any changes in the regulatory environment could restrict its existing or future operations and could possibly make it more burdensome and costly to conduct them. New regulations, or differing interpretations of existing laws, could change business processes, products and services and have a negative impact on the Company’s results of operations and financial condition.

The Company’s other businesses also operate within state and federal guidelines. Any changes in the regulatory environment could restrict its existing or future operations and could possibly make it more burdensome and costly to conduct them.

The timing and results of reform are currently unknown; however, changes to these entities could adversely impact the Company and its results of operations. 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.

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.

Removed

The current period of inflation, as well as ongoing military conflict between Russia and Ukraine, has created additional volatile market conditions and uncertainties in the global economy.

Added

The cyclical nature of the Company’s business has caused in the past, and is currently causing, volatility in revenue and profitability and could do so in the future.

Removed

Current political tensions may make it difficult for Congress to agree on any further increases to or suspension of the debt ceiling in a timely manner or at all, further increasing market volatility and economic uncertainty.

Added

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 future increases or suspension of the debt ceiling. These situations could exacerbate market volatility and economic uncertainty.

Removed

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 has been raising the target federal funds rate at recent meetings.

Added

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.

Removed

This includes the recent promotion of the use of alternative products in lieu of title insurance, such as attorney opinion letters, in certain circumstances to lower closing costs. In addition, the federal government has had discussions about the possible reform of Fannie Mae and Freddie Mac.

Added

Agents and approved attorneys typically handle large sums of money in trust pursuant to the closing of real estate transactions.

Removed

The Company and its subsidiaries are also subject to certain federal regulations established by the Office of the Comptroller of Currency, the Federal Reserve and various other governmental agencies. 13 The Company’s other businesses also operate within state and federal guidelines.

Added

Key elements that affect competition are price, expertise, timeliness and quality of service and the financial strength and size of the exchange service provider. Exchange services are not a regulated industry; there is no market data available regarding the Company’s market position in this industry. The Company may encounter difficulties managing growth, which could adversely affect its operating results.

Removed

These insurer ratings are subject to periodic review and there can be no assurance that the Company’s insurance subsidiaries will maintain their current respective ratings.

Added

Any alterations made by these regulatory entities, such as modifying the requirements for title insurance or allowing the use of alternative products in lieu of title insurance, could impact the entire mortgage loan process and, as a result, could impact the demand for title insurance.

Removed

The Company derives a substantial portion of its income from its investment portfolio that primarily includes fixed maturity securities, equity securities and short-term investments. The Company’s investment policy is designed to comply with regulatory requirements and to balance the competing objectives of asset quality and investment returns.

Added

In addition, the federal government has had discussions about the possible reform of Fannie Mae and Freddie Mac. The timing and results of reform are currently unknown; however, changes to these entities could adversely impact the Company and its results of operations.

Removed

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

New regulations, or differing interpretations of existing laws, could change business processes, products and services and have a negative impact on the Company’s results of operations and financial condition. A downgrade from a rating agency could result in a loss of underwriting business. The competitive positions of title insurance companies rely partly on ratings published by independent rating services.

Removed

The inability of the Company to manage, develop or successfully implement new systems or technological changes could negatively impact profitability. 16 Policies and procedures for the mitigation of risk may not be sufficient.

Added

These provisions are described in further detail in “Description of the Company’s Securities” incorporated by reference as Exhibit 4.1 to this Annual Report on Form 10-K.

Removed

COVID-19 or other potential pandemics could continue to affect the Company in a number of ways including, but not limited to, the impact of employees becoming ill, quarantined, or otherwise unable to work or travel due to illness or governmental restriction, potential decreases in net premiums written in the future, and future fluctuations in the Company's investment portfolio.

Removed

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 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed5 unchanged

2022 filing

2023 filing

Biggest changeThe following table provides information about purchases by the Company (and all affiliated purchasers), during the quarter ended December 31, 2022, 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 427,532 October 1 through October 31, 2022 — $ — — 427,532 November 1 through November 30, 2022 — — — 427,532 December 1 through December 31, 2022 316 146.11 316 427,216 Total 316 $ 146.11 316 427,216 (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, 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.

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, 2022 was 212.

During the quarter and year ended December 31, 2022, the Company purchased 316 and 945 shares of common stock under the Company’s repurchase plan, respectively. As of December 31, 2022, there was authority remaining under the plan to purchase up to an aggregate of 427,216 shares of the Company’s common stock.

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.

Item 7. Management's Discussion & Analysis

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

94 edited+12 added−21 removed85 unchanged

2022 filing

2023 filing

Biggest changeResults of Operations The following table presents certain Consolidated Statements of Operations data for the years ended December 31, 2022 and 2021: For the Years Ended December 31, (in thousands) 2022 2021 Revenues: Net premiums written $ 248,632 $ 273,885 Escrow and other title-related fees 21,721 13,678 Non-title services 14,524 9,667 Interest and dividends 4,704 3,773 Other investment income 3,896 6,920 Net realized investment gains 9,735 1,869 Changes in the estimated fair value of equity security investments (20,961) 14,934 Other 1,141 4,772 Total Revenues 283,392 329,498 Operating Expenses: Commissions to agents 121,566 142,815 Provision for claims 4,255 5,686 Personnel expenses 85,331 64,193 Office and technology expenses 17,323 13,059 Other expenses 24,809 18,813 Total Operating Expenses 253,284 244,566 Income before Income Taxes 30,108 84,932 Provision for Income Taxes 6,205 17,912 Net Income $ 23,903 $ 67,020 25 Insurance Revenues Insurance revenues include net premiums written and escrow and other title-related income that includes escrow fees, commissions and settlement fees.

Biggest changeResults 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.

Critical Accounting Estimates and Policies The Consolidated Financial Statements of the Company are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and follow general practices within the industries in which it operates. This preparation requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

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.

These risks and uncertainties include the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated; the risk that the Company’s assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the characteristics of that issuer; the risk that information obtained by the Company or changes in other facts and circumstances leads management to change its intent to sell the fixed maturity security; and the risk that management is making decisions based on inaccurate information in the financial statements provided by issuers.

Net Realized Investment Gains 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 realized investment gains 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 (losses) are affected by assessments of securities’ valuation for impairment.

ITEC acts as a qualified intermediary in tax-deferred exchanges of real property held for productive use in a trade or business or for investment, and its income is derived from fees for handling exchange transactions and a portion of the interest earned on client deposits held by the Company.

Loss provision rates are subject to variability and are reviewed and adjusted as experience develops. 29 Title claims are typically reported and paid within the first several years of policy issuance.

Loss provision rates are subject to variability and are reviewed and adjusted as experience develops. Title claims are typically reported and paid within the first several years of policy issuance.

Such commitments are not expected to have a material adverse effect on the Company’s liquidity. 32 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.

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.

These estimates and assumptions are based on information available as of the date of the financial statements; accordingly, as this information changes, actual results could differ from the estimates and assumptions reflected in the financial statements.

These estimates and assumptions are based on information available as of the date of the consolidated financial statements; accordingly, as this information changes, actual results could differ from the estimates and assumptions reflected in the consolidated financial statements.

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. 19 Overview Investors Title Company (the “Company”) is a holding company that engages primarily in issuing title insurance through two subsidiaries, Investors Title Insurance Company (“ITIC”) and National Investors Title Insurance Company (“NITIC”).

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. 20 Overview Title Insurance Investors Title Company (the “Company”) is a holding company that engages primarily in issuing title insurance through two subsidiaries, Investors Title Insurance Company (“ITIC”) and National Investors Title Insurance Company (“NITIC”).

The Company initially reserves for each known claim based upon an assessment of specific facts and updates the reserve amount as necessary over the course of administering each claim. 22 The Company assumes the reported liability for known claims and IBNR, in the aggregate, will be comparable to its historical claims experience unless factors, such as loss experience and charged premium rates, change significantly.

The Company initially reserves for each known claim based upon an assessment of specific facts and updates the reserve amount as necessary over the course of administering each claim. 23 The Company assumes the reported liability for known claims and IBNR, in the aggregate, will be comparable to its historical claims experience unless factors, such as loss experience and charged premium rates, change significantly.

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, 2022. 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, 2023. 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. 23 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. 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.

Any impairment that is not credit-related is recognized in other comprehensive loss, net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses (“ACL”) on 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 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.

In establishing the reserve, actuarial projections are compared with recorded reserves to evaluate the adequacy of such recorded claims reserves and any necessary adjustments are then recorded in the current period’s Consolidated Statement of Operations. Loss ratios for earlier years tend to be more reliable than recent policy years as those years are more fully developed.

In establishing the reserve, actuarial projections are compared with recorded reserves to evaluate the adequacy of such recorded claims reserves and any necessary adjustments are then recorded in the current period’s Consolidated Statement of Operations. Loss ratios for older years tend to be more reliable than recent policy years as those years are more fully developed.

The deferred tax liabilities recorded during both periods primarily relate to net unrealized gains on investments, the excess of tax over book depreciation, intangible assets, and the recorded statutory premium reserve, net of reserve for claims. Refer to Note 8 to the Consolidated Financial Statements for further information on the Company’s deferred taxes.

The deferred tax liabilities recorded during both periods primarily relate to net unrealized gains on investments, the excess of tax over book depreciation, recorded statutory premium reserve, net of reserve for claims, 1031 exchange gains, and intangible assets. Refer to Note 8 to the Consolidated Financial Statements for further information on the Company’s deferred taxes.

In 2022, ongoing evaluation of changing business and financial market conditions led to portions of cash flow from operations, and certain amounts resulting from sales and maturities in the company’s investment portfolio, to be invested in short term investments to take advantage of elevated short-term interest rates.

Beginning in late 2022, ongoing evaluation of changing business and financial market conditions led to portions of cash flow from operations, and certain amounts resulting from sales and maturities in the company’s investment portfolio, to be invested in short term investments to take advantage of elevated short-term interest rates.

The Company believes it is more likely than not that the tax benefits associated with recognized impairments and unrecognized losses recorded through December 31, 2022 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, 2023 will be realized. However, this judgment could be impacted by further market fluctuations.

Of that total, approximately $3.3 million was reserved for specific claims which have been reported to the Company, and approximately $33.9 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 $2.9 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.

As of December 31, 2022, both ITIC and NITIC met the minimum capital, surplus and reserve requirements for each state in which they are licensed.

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.

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, 2022 would be as follows: (in thousands) Increase in loss ratio of three percentage points $ (5,893) Decrease in loss ratio of three percentage points $ 5,893 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, 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.

The total reserve for all losses incurred but unpaid as of December 31, 2022 is represented by the reserve for claims totaling $37.2 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, 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 Company reviews and adjusts lag time estimates periodically, using historical experience and other factors, and reflects any adjustments in the result of operations in the period in which new information becomes available. Quarterly, the Company evaluates the collectability of receivables. Write-offs of receivables have not been material to the Company.

The Company reviews and adjusts lag time estimates periodically, using historical experience and other factors, and reflects any adjustments in the result of operations in the period in which new information becomes available. Quarterly, the Company evaluates the collectability of receivables. Receivables deemed uncollectible have not been material to the Company.

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, and, at times, the Company has or could invest in 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 strives to maintain a high quality investment portfolio.

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, 2022 is $5.2 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, 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.

Cash held by the Company for these purposes was approximately $24.2 million and $27.5 million as of December 31, 2022 and 2021, 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 $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.

The amounts accrued for these agreements at December 31, 2022 and 2021 were approximately $15.0 million and $13.4 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, 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.

Refer to Note 3 to the Consolidated Financial Statements for further information about the Company’s valuation techniques. 24 Deferred Taxes The Company recorded net deferred tax liabilities at December 31, 2022 and 2021.

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.

As of December 31, 2022, approximately $110.3 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, 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.

Other investment income was $3.9 million in 2022, compared with $6.9 million in 2021. 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 $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.

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 $9.7 million for 2022, compared with $1.9 million for 2021.

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.

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 $635.3 m illion and $728.2 million as of December 31, 2022 and 2021, 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. 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.

Contractual Obligations : As of December 31, 2022, the Company had a claims reserve totaling $37.2 million. The amounts and timing of these obligations are estimated and not set contractually.

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.

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 2023, the maximum distributions the insurance subsidiaries can make to the Company without prior approval from applicable regulators total approximately $30.9 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 2024, the maximum distributions the insurance subsidiaries can make to the Company without prior approval from applicable regulators total approximately $17.5 million.

Like-kind exchange deposits and reverse exchange property held by the Company for the purpose of completing such transactions totaled approximately $432.0 million and $763.9 million as of December 31, 2022 and 2021, 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 $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.

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. 30 Cash Flows: Net cash flows provided by operating activities were $36.2 million and $51.9 million for 2022 and 2021, 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 $7.4 million and $36.2 million for 2023 and 2022, respectively.

In 2022, purchase activity accounted for 70.3% of all mortgage originations and is projected in the MBA Forecast to represent 76.2% of all mortgage originations in 2023. According to data published by Freddie Mac, the average 30-year fixed mortgage interest rates in the United States were 5.3% and 3.0% for the years ended December 31, 2022 and 2021, respectively.

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.

On a consolidated basis, personnel expenses as a percentage of total revenues were 30.1% and 19.5% in 2022 and 2021, 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 $17.3 million and $13.1 million for 2022 and 2021, respectively.

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.

Adjustments may be required as new information develops which often varies from past experience. Income Taxes The provision for income taxes was $6.2 million and $17.9 million for 2022 and 2021, respectively. Income tax expense, including federal and state taxes, as a percentage of income before income taxes was 20.6% and 21.1% for 2022 and 2021, respectively.

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.

Regulatory Environment The FOMC issues disclosures on a periodic basis that include projections of the federal funds rate and expected actions. The FOMC had maintained a target range between 0.00% and 0.25% from March 2020 until March 2022, when the target federal funds rate range was increased to between 0.25% and 0.50% .

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.

Adverse developments that generally require additional capital include adverse financial results, changes in statutory accounting requirements by regulators, reserve charges, investment losses or costs incurred to adapt to a changing regulatory environment, including costs related to CFPB regulation of the real estate industry. The Company bases its capitalization levels in part on net coverage retained.

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 2022 to $85.7 million, compared with $82.1 million in 2021.

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.

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.

ITMS offers various consulting and management services to provide clients with the technical expertise to start and successfully operate a title insurance agency. Business Trends and Recent Conditions The housing market is heavily influenced by government policies and overall economic conditions.

ITMS offers various consulting and management services to provide clients with the technical expertise to start and successfully operate a title insurance agency. The Company’s trust services division, Investors Trust, provides investment management and trust services to individuals, companies, banks and trusts. Business Trends and Recent Conditions The housing market is heavily influenced by government policies and overall economic conditions.

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.

From time to time, these laws are subject to review and changes, which may negatively affect the demand for tax-deferred exchanges in general, and consequently, the revenues and profitability of the Company’s exchange services division. The Company’s trust services division, Investors Trust, provides investment management and trust services to individuals, companies, banks and trusts.

The Company’s invested assets are managed to fund its obligations and evaluated to ensure long term stability of capital accounts. 27 As the Company generates cash from operations, it is invested in accordance with the Company’s investment policy and corporate goals.

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.

Total revenues from the title segment accounted for 94.9% of the Company’s revenues in 2022. 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.

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.

Per the MBA Forecast, mortgage interest rates are projected to decrease over the subsequent 3-year period, reaching 4.4% in 2025. Due to the rapidly changing environment that has continued to be influenced by COVID-19, supply constraints, inflationary pressures and geopolitical conflicts, these projections and the impact of actual future developments on the Company could be subject to material change.

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.

To determine the estimated premiums, the Company uses historical experience, as well as other factors, to make certain assumptions about the average elapsed time between the policy effective date and the date the policies are reported. From time to time, the Company adjusts the inputs to the estimation process as reported transactions and new information becomes available.

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. Actual payments of claims, net of recoveries, were $3.8 million and $2.5 million in 2022 and 2021, respectively.

However, with any continued impact of COVID-19, ongoing inflationary pressures and the ongoing military conflict between Russia and Ukraine, there can be no assurance that future experience will be similar to historical experience, since it is influenced by such factors as the interest rate environment, real estate activity, the Company’s claims-paying ability and its financial strength ratings.

However, given inflationary pressures and geopolitical and military conflicts, there can be no assurance that future experience will be similar to historical experience, since it is influenced by such factors as the interest rate environment, real estate activity, the Company’s claims-paying ability and its financial strength ratings.

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 has plans for various capital improvement projects, including increased investment in a number of technology and system development initiatives and hardware purchases which are anticipated to be funded via cash flows from operations. All material anticipated capital expenditures are subject to periodic review and revision and may vary depending on a number of factors.

Cash flows from operations are expected to fund the Company's investment in technology and system development initiatives and hardware purchases, given ongoing capital improvement projects and plans for future projects. All material anticipated capital expenditures are subject to periodic review and revision and may vary depending on a number of factors.

In norm al 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. 21 Real Estate Environment The Mortgage Bankers Association's (“MBA”) January 19, 2023 Mortgage Finance Forecast (“MBA Forecast”) projects 2023 purchase activity to decrease 8.8% to $1,439 billion and refinance activity to decrease 32.7% to $449 billion, resulting in a decrease in total mortgage originations of 15.9% to $1,888 billion, all from 2022 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. 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.

Following is a breakdown of net premiums generated by direct and agency operations for the years ended December 31, 2022 and 2021, with certain balances for 2021 reclassified to conform to the 2022 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, 2023 and 2022, with certain balances for 2022 reclassified to conform to the 2023 presentation.

The effective income tax rates for both 2022 and 2021 differ from the U.S. federal statutory income tax rate of 21% primarily due to the effect of tax-exempt income and state taxes. Tax-exempt income lowers the effective tax rate.

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.

(in thousands, except percentages) 2022 % 2021 % Direct $ 85,676 34.5 $ 82,085 30.0 Agency 162,956 65.5 191,800 70.0 Total $ 248,632 100.0 $ 273,885 100.0 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) 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.

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.

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.

Reserve for Claims: At December 31, 2022, the total reserve for claims was $37.2 million. Of that total, approximately $3.3 million was reserved for specific claims, and approximately $33.9 million was reserved for claims for which the Company had no notice.

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.

(in thousands, except percentages) 2022 % 2021 % Title Insurance $ 242,280 95.7 $ 234,573 95.9 All Other 11,004 4.3 9,993 4.1 Total $ 253,284 100.0 $ 244,566 100.0 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) 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.

Management believes unrealized losses on the remaining fixed maturity securities at December 31, 2022 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.

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.

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 changes in the estimated fair value of equity security investments.

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.

From time to time, the Company adjusts the inputs to the estimation process as reported transactions and new information becomes available from direct and agency business. In addition to estimating revenues, the Company also estimates and accrues agent commissions, claims provision, premium taxes, income taxes, and other expenses associated with the estimated revenues that have been accrued.

In addition to estimating revenues, the Company also estimates and accrues agent commissions, claims provision, premium taxes, income taxes, and other expenses associated with the estimated revenues that have been accrued. The Company reflects any adjustments to the accruals in the results of operations in the period in which new information becomes available.

Agency net premiums written decreased 15.0% in 2022 to $163.0 million, compared with $191.8 million in 2021.

Agency net premiums written decreased 30.6% in 2023 to $113.1 million, compared with $163.0 million in 2022.

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.

There are a number of risks and uncertainties inherent in the process of monitoring impairments and determining if an impairment exists.

Since the Company's geographical focus has been and continues to be concentrated in states with average premium rates typically lower than the national average, capitalization relative to premiums will usually appear higher than industry averages. 31 Due to the Company’s historical ability to consistently generate positive cash flows from its consolidated operations and investment income, management believes that funds generated from operations will enable the Company to adequately meet its current operating needs for the foreseeable future.

Due to the Company’s historical ability to consistently generate positive cash flows from its consolidated operations and investment income, management believes that funds generated from operations will enable the Company to adequately meet its current operating needs for the foreseeable future.

On a combined basis, the after-tax profit margins were 8.4% and 20.3% in 2022 and 2021, respectively. The decrease in after-tax margin in 2022, compared with 2021, was primarily related to a decrease in total revenue and an increase in expenses.

On a combined basis, the after-tax profit margins were 9.6% and 8.4% in 2023 and 2022, respectively. The increase in after-tax margin in 2023, compared with 2022, was primarily related to a decrease in total expenses. The Company continually strives to enhance its competitive strengths and market position, including ongoing initiatives to manage its operating expenses.

In 2022, commissions to agents decreased 14.9% to $121.6 million, compared with $142.8 million in 2021. Commission expense as a percentage of net premiums written by agents was 74.6% and 74.5% in 2022 and 2021, respectively. The decrease in commission expense, when comparing 2022 with 2021, was commensurate with the decrease in agent premium volume.

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.

Interest and dividends were $4.7 million in 2022, compared with $3.8 million in 2021. Interest and investment income levels are primarily a function of general market performance, interest rates and the amount of cash available for investment.

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.

In the fourth quarters of 2022 and 2021, the Company paid special cash dividends in the amounts of $3.00 and $18.00 per share, respectively, in addition to regular cash dividends. Total dividends paid per share were $4.84 and $19.82 in 2022 and 2021, respectively.

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.

The decrease in 2022, compared with 2021, was primarily driven by an overall decline in the level of real estate transaction volumes resulting from higher average mortgage interest rates. 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.

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 decrease in 2022, compared with 2021, primarily related to a gain on the sale of a property in 2021. 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 $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.

Commission rates vary by market due to local practice, competition and state regulations. Provision for Claims : The provision for claims decreased 25.2% in 2022, compared to 2021. The provision for claims as a percentage of net premiums written was 1.7% and 2.1% in 2022 and 2021, respectively.

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.

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 945 shares at an average per share price of $141.01 in 2022. No shares were purchased in 2021.

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.

Changes in either of these areas, in addition to ongoing supply constraints and volatility in the cost and availability of building materials, could impact the Company's results of operations in future periods.

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.

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, 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.

All major indices experienced significant declines in 2022. 28 Other Income Other income primarily includes gains and losses on the disposal of assets, rental income from real estate investments and miscellaneous revenues. Other income was $1.1 million in 2022, compared with $4.8 million for 2021.

Other Revenues Other revenues primarily includes gains and losses on the disposal of assets, rental income from real estate investments and miscellaneous revenues.

(“ITMS”). 20 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. 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 decrease in 2022, compared with 2021, was primarily attributable to an overall decline in the level of real estate transaction volume following the rise in mortgage interest rates, partially offset by higher average home prices. 26 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) 2022 2021 North Carolina $ 88,777 $ 99,049 Texas 72,278 62,557 South Carolina 23,454 24,981 Georgia 22,954 34,619 All Others 41,987 53,197 Premiums Written 249,450 274,403 Reinsurance Assumed — — Reinsurance Ceded (818) (518) Net Premiums Written $ 248,632 $ 273,885 The increase in net premiums written in the state of Texas in 2022, compared with 2021, primarily resulted from the Company’s recent acquisitions of title insurance agencies doing business in the state of Texas.

The 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.

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Top changes in INVESTORS TITLE CO's 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Other ITIC 10-K year-over-year comparisons