What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-03-14 compared with 2021-03-15 · 132 added, 155 removed, 987 unchanged (23% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Management's Report on Internal Control Over Financial Reporting

7 unchanged sentences

The financial statement schedules meeting the requirements of Regulation S-X are attached hereto as Schedules I, II, III, IV and V.

Selected Quarterly Financial Data

Selected quarterly financial data not required for smaller reporting companies.

Report of Independent Registered Public Accounting Firm

1 unchanged sentence

Investors Title Company

Chapel Hill, North Carolina

Chapel Hill, NC

Opinion on the Consolidated Financial Statements

15 unchanged sentences

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current-period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Reserve for Claims

As described in notes 1 and 6 to the Company’s consolidated financial statements, the Company’s reserve for unpaid losses and loss adjustment expenses is established using estimated amounts required to settle claims for which notice has been received (reported) and the amount estimated to be required to satisfy incurred claims of policyholders which may be reported in the future (incurred but not reported, or “IBNR”).

As described in notes 1 and 6 to the Company’s consolidated financial statements, the Company’s unpaid loss and losses adjustment expenses are established using estimated amounts required to settle claims for which notice has been received (reported) and the amount estimated to be required to satisfy incurred claims of policyholders which may be reported in the future (incurred but not reported, or “IBNR”).

As of December 31, 2021, the Company had approximately $36.8 million in reserve for claims.

1 unchanged sentence

Management determines its loss provision rate through the consideration of factors such as the Company’s historical claim experience, case reserve estimates on reported claims, large claims, actuarial projections, and other relevant factors.

The Company utilizes accepted actuarial methodologies when performing the actuarial projections.

The Company’s specialist utilizes accepted actuarial methodologies when performing the actuarial projections.

Management’s assumptions include assumed comparability to its historical claims experience unless factors, such as loss experience and charged premium rates, change significantly, as well as assumptions around large losses related to fraud and defalcation.

We identified the reserve for claims as a critical audit matter.

The principal considerations for our determination of the reserve for claims as a critical audit matter included management’s significant actuarial estimates and assumptions used to estimate the reserve for claims, including the selection of actuarial methods, loss development factors and expected loss ratios.

This required a high degree of judgment, subjectivity and effort in auditing the reasonableness of the actuarial methodologies and assumptions used in determining the reserve for claims, including the use of an auditor-engaged specialist.

The principal considerations for our determination of the reserve for claims as a critical audit matter were management’s use of significant actuarial estimates and assumptions to estimate the reserve for claims, including the selection of actuarial methods, loss development factors, and expected loss ratios, as well as the high degree of auditor judgment, subjectivity, and effort in determining the reasonableness of the actuarial assumptions and methodologies utilized, and our use of an auditor’s specialist.

Our audit procedures related to the reserve for claims included the following, among others:

• We obtained an understanding, evaluated the design and implementation, and tested the operating effectiveness of the Company’s controls over the reserve for claims development process.

This included the controls over the determination of the actuarial methods and assumptions utilized to support the reserve for claims calculations, and controls over the completeness and accuracy of historical loss data utilized in the reserve for claims calculations.

• We obtained an understanding, evaluated the design and implementation, and tested the operating effectiveness of the Company’s controls over the process for developing its reserve for claims.

This included, among others, the controls over the determination of the actuarial methods and assumptions utilized to support the reserve for claims calculations and controls over the completeness and accuracy of historical loss data utilized in the reserve for claims calculations.

• We engaged a third-party actuary with specialized skill and knowledge to assist in evaluating the reasonableness of the reserving methodologies utilized by the Company’s specialist and evaluating the reasonableness of the assumptions related to loss development factors and expected loss ratios.

2 unchanged sentences

• We evaluated the reasonableness of the significant assumptions utilized by the Company in developing the reserve for claims.

/S/ DIXON HUGHES GOODMAN LLP

We have served as the Company's auditor since 2004.

High Point, North Carolina

/s/ Dixon Hughes Goodman LLP

High Point, NC

March 14, 2022

11 unchanged sentences

Investors Title Company

Chapel Hill, North Carolina

Chapel Hill, NC

Opinion on Internal Control Over Financial Reporting

We have audited Investors Title Company and Subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control— Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have audited Investors Title Company and Subsidiaries’ (the “Company”) internal control over financial reporting of December 31, 2021, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company for each of the two years in the period ended December 31, 2020, and our report dated March 15, 2021, expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2021 and 2020, and for each of the years then ended, and our report dated March 14, 2022, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

8 unchanged sentences

Definition and Limitations of Internal Control Over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

1 unchanged sentence

/s/ Dixon Hughes Goodman LLP

High Point, North Carolina

High Point, NC

March 14, 2022

74 unchanged sentences

Net income $ 67,020 $ 39,420

Other comprehensive income, before tax:

Other comprehensive (loss) income, before tax:

Accumulated postretirement benefit obligation adjustment — ( 143 )

Unrealized gains on investments arising during the period 1,253 2,727

Unrealized (losses) gains on investments arising during the period ( 1,376 ) 1,253

Reclassification adjustment for sale of securities included in net income

( 19 ) ( 30 )

Reclassification adjustment for write-down of securities included in net income

Other comprehensive income, before tax 1,562 2,727

Other comprehensive (loss) income, before tax ( 1,395 ) 1,562

Income tax benefit related to postretirement health benefits — ( 31 )

Income tax expense related to unrealized gains on investments arising during the year 262 576

Income tax (benefit) expense related to unrealized (losses) gains on investments arising during the year ( 291 ) 262

Income tax benefit related to reclassification adjustment for sale of securities included in net income ( 4 ) ( 6 )

Income tax expense related to reclassification adjustment for write-down of securities included in net income

Net income tax expense on other comprehensive income 336 576

Other comprehensive income 1,226 2,151

Net income tax (benefit) expense on other comprehensive (loss) income ( 295 ) 336

Other comprehensive (loss) income ( 1,100 ) 1,226

Comprehensive Income $ 65,920 $ 40,646

16 unchanged sentences

Share-based compensation expense related to stock appreciation rights

Accumulated postretirement benefit obligation adjustment ( 112 ) ( 112 )

Net unrealized gain on investments 1,338 1,338

Other ( 94 ) ( 94 )

Balance, December 31, 2020

3 unchanged sentences

( 37,553 ) ( 37,553 )

Repurchases of common stock

— ( 6 ) ( 6 )

Exercise of stock appreciation rights

3 ( 1 ) ( 1 )

Share-based compensation expense related to stock appreciation rights

Accumulated postretirement benefit obligation adjustment ( 112 ) ( 112 )

Net unrealized gain on investments

Other ( 94 ) ( 94 )

Net unrealized loss on investments ( 1,100 ) ( 1,100 )

Balance, December 31, 2021

14 unchanged sentences

Net realized gain on securities ( 911 ) ( 311 )

Net realized (gain) loss on other investments ( 22 ) 3

Net realized gain on other investments ( 958 ) ( 22 )

Changes in the estimated fair value of equity security investments ( 14,934 ) ( 4,904 )

3 unchanged sentences

Changes in assets and liabilities:

Increase in receivables ( 6,904 ) ( 395 )

(Increase) decrease in other assets ( 3,977 ) 1,654

Decrease (increase) in operating lease right-of-use assets 842 ( 4,469 )

(Decrease) increase in operating lease liabilities ( 833 ) 4,502

Increase in premium and fees receivable ( 3,526 ) ( 6,904 )

Increase in other assets ( 9,017 ) ( 3,977 )

(Increase) decrease in operating lease right-of-use assets ( 1,669 ) 842

Increase (decrease) in operating lease liabilities 1,660 ( 833 )

Increase in accounts payable and accrued liabilities 7,848 7,559

Decrease in current income taxes payable ( 702 ) ( 3,641 )

Increase (decrease) in current income taxes payable 2,691 ( 702 )

Payments of claims, net of recoveries ( 2,516 ) ( 2,953 )

12 unchanged sentences

Proceeds from disposals of property 6,739 85

Net cash (used in) provided by investing activities ( 14,600 ) 4,489

Net cash provided by (used in) investing activities 9,068 ( 14,600 )

Consolidated Statements of Cash Flows, continued

5 unchanged sentences

Net cash used in financing activities ( 37,554 ) ( 31,721 )

Net (Decrease) Increase in Cash and Cash Equivalents ( 12,226 ) 7,255

Net Increase (Decrease) in Cash and Cash Equivalents 23,445 ( 12,226 )

Cash and Cash Equivalents, Beginning of Period 13,723 25,949

4 unchanged sentences

Non Cash Investing and Financing Activities:

Non cash net unrealized gain on investments, net of deferred tax provision of $( 367 ) and $( 576 ) for December 31, 2020 and 2019, respectively

Non cash net unrealized loss (gain) on investments, net of deferred tax benefit (provision) of $ 295 and $( 367 ) for December 31, 2021 and 2020, respectively

$ 1,100 $ ( 1,338 )

20 unchanged sentences

Investments in Fixed Maturity Securities :

Fixed maturity securities are classified as available-for-sale and reported at estimated fair value with unrealized gains and losses, net of tax and adjusted for other-than-temporary declines in fair value, reported as accumulated other comprehensive income.

Fixed maturity securities are classified as available-for-sale and reported at estimated fair value with unrealized gains and losses, net of tax and adjusted for other-than-temporary declines in fair value, and reported as accumulated other comprehensive income.

Securities are regularly reviewed for differences between the cost and estimated fair value of each security for factors that may indicate that a decline in fair value is other-than-temporary.

17 unchanged sentences

Other Investments

Other investments consist of investments in unconsolidated affiliated entities, typically structured as limited liability companies ("LLCs"), without readily determinable fair values.

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.

Depreciation and other related expenses are recorded as an offset to investment income.

The Company monitors any events or changes in circumstances that may have had a significant adverse effect on the fair value of real estate investments and makes any necessary adjustments, with any reductions in the carrying amount of these investments recorded in net realized investment gains in the Consolidated Statement of Operations when recognized.

Lease rental income earned by the Company, which does not have a material impact on the Company's results of operations, is included with other income on the Consolidated Statements of Operations.

Other investments are accounted for under either the equity method or the measurement alternative method.

The measurement alternative method is used when an investment does not qualify for the equity method or the practical expedient in Accounting Standards Codification (“ASC”) Topic 820, which estimates fair value using the net asset value per share.

The measurement alternative method is used when an investment does not qualify for either the equity method or the practical expedient in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, which estimates fair value using the net asset value per share.

Under the measurement alternative method, investments are recorded at cost, less any impairment and plus or minus any changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

The aggregate cost of the Company’s cost method investments totaled $ 8.7 million and $ 7.9 million at December 31, 2020 and 2019, respectively.

The Company monitors any events or changes in circumstances that may have had a significant adverse effect on the fair value of these investments and makes any necessary adjustments.

4 unchanged sentences

Property Acquired in Settlement of Claims

Property acquired in settlement of claims is held for sale and valued at the lower of cost or estimated realizable value.

Property acquired in settlement of claims is held for sale and valued at the lower of cost or estimated realizable value, net of any indebtedness on the property.

Adjustments to reported estimated realizable values and realized gains or losses on dispositions are recorded as increases or decreases in claim costs.

11 unchanged sentences

Although claims losses are typically paid in cash, occasionally claims are settled by purchasing the interest of the insured or the claimant in the real property.

When this event occurs, the acquiring company carries assets at the lower of cost or estimated realizable value, net of any indebtedness on the property.

When this event occurs, the acquiring company carries the assets as property acquired in the settlement of claims.

The Company makes certain estimates and judgments in determining income tax expense (benefit) for financial statement purposes.

13 unchanged sentences

Exchange Services Revenue

Fees are recognized at the signing of a binding agreement and investment earnings are recognized as they are earned.

Fees are recognized at the signing of a binding agreement, as the earnings process, or performance obligation, is then considered to be complete.

Investment earnings are recognized as they are earned.

Exchange services revenue is included in non-title services in the Consolidated Statements of Operations.

8 unchanged sentences

Share-Based Compensation

The Company accounts for share-based compensation in accordance with the fair value based principles required by the Financial Accounting Standards Board (“FASB”).

Share-based compensation cost is generally measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense over the employee’s requisite service period.

2 unchanged sentences

Goodwill represents the excess of cost over fair value of identifiable net assets acquired and assumed in a business combination.

The fair value of the Company’s goodwill at acquisition is principally based on values obtained from a third-party valuation service.

The fair value of the Company’s goodwill at acquisition is principally based on values obtained from an independent third-party valuation service.

Goodwill was reviewed for impairment as of December 31, 2021, and is reviewed at least annually, or when events or changes in circumstances indicate the carrying value may not be recoverable.

7 unchanged sentences

all of which are recorded at the acquisition date fair value.

The fair value of the Company’s other intangible assets is principally based on values obtained from a third-party valuation service.

These assets are amortized on a straight-line basis over their useful lives, which range from 1 to 30 years;

The fair value of the Company’s other intangible assets is principally based on values obtained from an independent third-party valuation service.

These assets are amortized on a straight-line basis over their useful lives, which range from 5 months to 30 years;

noting that the amortization of certain non-compete contracts will start at a future date when the related employment agreements are terminated.

11 unchanged sentences

Operating lease ROU assets and liabilities are recognized at the date of the lease commencement, and are based on the present value of lease payments over the lease term.

In addition, the Company elected certain practical expedients and therefore (a) chose not to reassess whether any expired or existing contracts are, or contain, leases, (b) chose not to reassess the lease classification for any expired or existing leases, and (c) chose not to reassess initial direct costs for any expired or existing leases.

The Company's current leases do not provide an implicit interest rate, thus the Company utilized the average rate over a 10-year term based upon the Moody's seasoned Aaa corporate bond yields in determining the present value of lease payments.

8 unchanged sentences

Recently Adopted Accounting Standards

In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326) .

ASU 2016-13 updated guidance to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date.

The update broadened the information that an entity must consider in developing its expected credit loss estimates, and was meant to better reflect an entity’s current estimate of all expected credit losses.

In addition, this update amended the accounting for credit losses on available-for-sale fixed maturity securities and purchased financial assets with credit deterioration.

The update was effective for the Company for annual periods beginning after December 15, 2019, and interim periods within those fiscal years.

In December 2019, the FASB issued Accounting Standards Update ("ASU") 2019-12, Simplifying the Accounting for Income Taxes .

ASU 2019-12 was intended to reduce the complexity in accounting for income taxes during interim and annual periods and provide clarity on income tax situations where a diversity in practice had developed.

The update was effective for annual and interim periods in fiscal years beginning after December 15, 2020.

The Company adopted this update on January 1, 2021, with no material impact on the Company's financial position and results of operations.

Refer to Note 3 for further information about the Company's investments.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350).

This update removed the requirement to compare the implied fair value of goodwill with its carrying amount as part of step two of the goodwill impairment test.

As a result, under the ASU, an entity is required to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and must recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value;

however, the loss recognized must not exceed the total amount of goodwill allocated to that reporting unit.

In addition, the ASU clarified that an entity is required to consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable.

The update was effective for the Company for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.

The Company adopted this update on January 1, 2020 with no impact on the Company's financial position and results of operations.

Recently Issued Accounting Standards

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes .

ASU 2019-12 is intended to reduce the complexity in accounting for income taxes during interim and annual periods and is expected to provide clarity on income tax situations where a diversity in practice has developed.

The update is effective for annual and interim periods in fiscal years beginning after December 15, 2020.

Early adoption is permitted for interim or annual periods for which financial statements have not yet been issued.

None of these amendments are expected to have a material impact on the Company's financial position or results of operations.

In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) .

This update clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative immediately before applying or upon discontinuing the equity method.

In addition, this update clarifies that, when determining the accounting for certain forward contracts and purchased options, a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option.

The update is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

Early adoption is permitted , including early adoption in an interim period, for periods for which financial statements have not yet been issued.

The Company is currently evaluating the impact that the recently issued accounting standard will have on the Company's financial position and results of operations, and does not expect it to have a material impact.

This update clarified that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative immediately before applying or upon discontinuing the equity method.

In addition, this update clarified that, when determining the accounting for certain forward contracts and purchased options, a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option.

The update was effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

The Company adopted this update on January 1, 2021, with no material impact on the Company's financial position and results of operations.

Use of Estimates and Assumptions

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period and accompanying consolidated notes.

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of revenues and expenses during the reporting period and the accompanying Notes to Consolidated Financial Statements.

Actual results could differ materially from those estimates and assumptions used.

34 unchanged sentences

During 2022, the maximum distributions the insurance subsidiaries can make to the Company without prior approval from applicable regulators total approximately $ 53.2 million.

Fixed maturity securities totaling approximately $ 7.2 million and $ 7.1 million at December 31, 2020 and 2019, respectively, are deposited with the insurance departments of the states in which business is conducted.

Fixed maturity securities with fair market values totaling approximately $ 7.0 million and $ 7.2 million at December 31, 2021 and 2020, respectively, are deposited with the insurance departments of the states in which business is conducted.

Investments and Estimated Fair Value

28 unchanged sentences

The special revenue category for both periods presented includes approximately 50 individual fixed maturity securities with revenue sources from a variety of industry sectors.

The scheduled maturities of fixed maturity securities at December 31, 2020 were as follows:

The scheduled maturities of fixed maturity securities at December 31, 2021 are as follows:

Available-for-Sale

2 unchanged sentences

Due after one year through five years 52,158 55,253

Due five years through ten years 16,058 17,521

Due after five years through ten years 4,958 5,436

Due after ten years 822 1,366

10 unchanged sentences

As of December 31, 2020 (in thousands) Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses

Government obligations

$ 12,045 $ ( 4 ) $ — $ — $ 12,045 $ ( 4 )

Special revenue issuer obligations of U.S.

states, territories and political subdivisions $ — $ — $ 1,103 $ ( 3 ) $ 1,103 $ ( 3 )

1,101 ( 17 ) 1,118 ( 3 ) 2,219 ( 20 )

Corporate debt securities 20,630 ( 24 ) — — 20,630 ( 24 )

1 unchanged sentence

The decline in estimated fair value of the fixed maturity securities can be attributed primarily to changes in market interest rates and changes in credit spreads over Treasury securities.

Because the Company does not have the intent to sell these securities and will likely not be compelled to sell them before it can recover its cost basis, the Company does not consider these investments to be other-than-temporarily impaired.

Because the Company does not intend to sell these securities and will likely not be compelled to sell them before it can recover its cost basis, the Company does not consider these investments to be other-than-temporarily impaired.

Management evaluates available-for-sale fixed maturity securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors.

1 unchanged sentence

Factors considered in determining whether a loss is temporary include the length of time and extent to which the estimated fair value has been below cost, the financial condition and prospects of the issuer (including credit ratings and analyst reports) and macro-economic changes.

A total of 12 and six fixed maturity securities had unrealized losses at December 31, 2020 and 2019, respectively.

The Company does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.

A total of 9 and 12 fixed maturity securities had unrealized losses at December 31, 2021 and 2020, respectively.

The Company does not intend to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.

The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.

The Company believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions, and therefore the unrealized loss is recorded in accumulated other comprehensive income.

The Company believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in market interest rates and other market conditions, and therefore the unrealized loss is recorded in accumulated other comprehensive income.

Reviews of the values of fixed maturity securities are inherently uncertain and the value of the investment may not fully recover, or may decline in future periods resulting in a realized loss.

The Company recorded $ 482 thousand and $ 0 of other-than-temporary impairment charges related to fixed maturity securities for the twelve-month periods ended December 31, 2020 and 2019, respectively.

The Company recorded $ 0 and $ 482 thousand of other-than-temporary impairment charges related to fixed maturity securities for the twelve-month periods ended December 31, 2021 and 2020, respectively.

Expenses related to other-than-temporary impairments are recorded in net realized investment gains in the Consolidated Statements of Operations when recognized.

11 unchanged sentences

Interest and Dividends

Earnings on investments for the years ended December 31 were as follows:

Earnings on investments for the years ended December 31 are as follows:

(in thousands) 2021 2020

3 unchanged sentences

Miscellaneous interest 2 3

Investment income $ 4,393 $ 4,752

Interest and dividends $ 3,773 $ 4,393

Net Realized Investment Gains

6 unchanged sentences

Gross realized losses from securities:

Corporate debt securities $ ( 33 ) $ —

Common stocks ( 1,008 ) ( 2,665 )

46 unchanged sentences

The carrying amount for cash and cash equivalents is a reasonable estimate of fair value due to the short-term maturity of these investments.

Investments in real estate

Real estate investments are reported at amortized cost.

Depreciation and other related expenses are recorded as an offset to investment income.

Measurement alternative equity investments

25 unchanged sentences

Short-term investments:

Money market funds, Treasury bills, commercial paper and certificates of deposit 15,170 — — 15,170

Money market funds 45,930 — — 45,930

Other investments:

Equity investments in unconsolidated affiliates, equity method

— — 6,752 6,752

Equity investments in unconsolidated affiliates, measurement alternative — — 8,688 8,688

— — 8,741 8,741

Total $ 160,768 $ — $ 8,688 $ 169,456

6 unchanged sentences

Short-term investments:

Money market funds and certificates of deposit 13,134 — — 13,134

Money market funds, Treasury bills, commercial paper and certificates of deposit 15,170 — — 15,170

Other investments:

Equity investments in unconsolidated affiliates, equity method

— — 6,083 6,083

Equity investments in unconsolidated affiliates, measurement alternative — — 8,741 8,741

— — 7,899 7,899

Total $ 94,850 $ — $ 8,741 $ 103,591

13 unchanged sentences

In the event the Company disagrees with a price provided by its pricing services, the respective service reevaluates the price to corroborate the market information and then reviews inputs to the evaluation in light of potentially new market data.

The Company believes that these processes and inputs result in appropriate classifications and estimated fair values consistent with ASC 820.

Certain equity investments under the measurement alternative are measured at estimated fair value on a non-recurring basis and are reviewed for impairment quarterly.

Certain equity investments under the measurement alternative and real estate investments are measured at estimated fair value on a non-recurring basis and are reviewed for impairment quarterly.

If any such investment is determined to be other-than-temporarily impaired, an impairment charge is recorded against such investment and reflected in the Consolidated Statements of Operations.

There were no impairments of such investments made during the twelve-month periods ended December 31, 2021 or 2020.

The following table presents a rollforward of equity investments under the measurement alternative as of December 31, 2020 and 2019:

The following table presents a rollforward of equity investments under the measurement alternative and real estate investments as of December 31, 2021 and 2020:

(in thousands) Balance,

5 unchanged sentences

Other investments:

Real estate $ — $ — $ — $ 5,000 $ ( 13 ) $ 4,987

Equity investments in unconsolidated affiliates, measurement alternative 8,741 — — 1,543 ( 1,596 ) 8,688

$ 7,899 $ — $ — $ 1,227 $ ( 385 ) $ 8,741

Total $ 8,741 $ — $ — $ 6,543 $ ( 1,609 ) $ 13,675

6 unchanged sentences

Other investments:

Real estate $ — $ — $ — $ — $ — $ —

Equity investments in unconsolidated affiliates, measurement alternative 7,899 — — 1,227 ( 385 ) 8,741

$ 6,589 $ — $ — $ 2,241 $ ( 931 ) $ 7,899

Total $ 7,899 $ — $ — $ 1,227 $ ( 385 ) $ 8,741

66 unchanged sentences

There have been no stock options or SARs granted where the exercise price was less than the market price on the date of grant.

During both 2021 and 2020, the Company issued share-settled SARs to directors of the Company.

During 2020, the Company also issued share-settled SARs to certain non-executive employees of the Company.

SARs give the holder the right to receive stock equal to the appreciation in the value of shares of stock from the grant date for a specified period of time, and as a result, are accounted for as equity instruments.

A summary of share-based award transactions for all share-based award plans follows:

26 unchanged sentences

In 2021, 6 thousand SARs vested with a fair value of approximately $ 299 thousand.

During both 2020 and 2019, the Company issued share-settled SARs to directors of the Company.

During 2020, the Company also issued share-settled SARs to certain non-executive employees of the Company.

The fair value of each award is estimated on the date of grant using the Black-Scholes option valuation model with the weighted average assumptions noted in the table shown below.

The fair value of each SAR is estimated on the date of grant using the Black-Scholes option valuation model with the weighted average assumptions noted in the table shown below.

Expected volatilities are based on both the implied and historical volatility of the Company’s stock.

25 unchanged sentences

Accrued benefits and retirement services $ 3,382 $ 3,189

Other-than-temporary impairment of assets 167 178

Net operating loss carryforward 186 118

Other-than-temporary impairment of assets 161 167

Allowance for doubtful accounts 66 65

5 unchanged sentences

Net unrealized gain on investments 10,964 8,090

Recorded reserve for claims, net of statutory premium reserves 1,199 1,096

Recorded statutory premium reserve, net of reserves for claims 1,835 1,199

Excess of tax over book depreciation 1,662 1,149

5 unchanged sentences

Based upon the Company’s historical results of operations, the existing financial condition of the Company and management’s assessment of all other available information, management believes that it is more likely than not that the benefit of these deferred income tax assets will be realized.

As computed for the years ended December 31 at the U.S.

federal statutory income tax rate of 21.0 % for 2020 and 2019, to income tax expense follows:

A reconciliation of the U.S.

federal statutory income tax rate of 21.0 % for the years ended December 31, 2021 and 2020, to income tax expense, is as follows:

(in thousands) 2021 2020

18 unchanged sentences

The exercise of such an option is solely at the Company's discretion.

The operating lease liability recorded in the Consolidated Balance Sheets 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 Company, in determining the present value of lease payments, utilized the average rate over a 10-year term based upon the Moody's seasoned Aaa corporate bond yields, as explicit rates of interest were not readily determinable in the lease contracts.

The operating lease liability recorded in the Consolidated Balance Sheets includes lease payments related to options to extend or cancel the lease term if the Company determines at the inception date that the lease is expected to be renewed or extended.

The Company, in determining the present value of lease payments, utilizes the average rate over a 10-year term based upon the Moody's seasoned Aaa corporate bond yields, as explicit rates of interest are not readily determinable in the lease contracts.

The Company does not carry debt;

thus no incremental borrowing rate was available to the Company.

thus no incremental borrowing rate is available to the Company.

Lease expense is included in office and technology expenses in the Consolidated Statements of Operations.

59 unchanged sentences

Plan assets — —

Funded status of accumulated postretirement benefit obligation, recognized in other liabilities $ ( 1,089 ) $ ( 956 )

Funded status of accumulated postretirement benefit obligation, recognized in accounts payable and accrued liabilities $ ( 1,118 ) $ ( 1,089 )

Development of the accumulated postretirement benefit obligation for the years ended December 31, 2021 and 2020 includes the following:

25 unchanged sentences

Like-Kind Exchange Proceeds:

In administering tax-deferred like-kind exchanges pursuant to § 1031 of the Internal Revenue Code, the Company’s subsidiary, Investors Title Exchange Corporation (“ITEC”), serves as a qualified intermediary, holding the net sales proceeds from relinquished property to be used for purchase of replacement property.

Another Company subsidiary, Investors Title Accommodation Corporation (“ITAC”), serves as exchange accommodation titleholder and, through LLCs that are wholly owned subsidiaries of ITAC, holds property for exchangers in reverse exchange transactions.

In administering tax-deferred like-kind exchanges pursuant to § 1031 of the Internal Revenue Code, the Company’s wholly owned subsidiary, Investors Title Exchange Corporation (“ITEC”), serves as a qualified intermediary, holding the net sales proceeds from relinquished property to be used for purchase of replacement property.

Another Company wholly owned subsidiary, Investors Title Accommodation Corporation (“ITAC”), serves as exchange accommodation titleholder and, through LLCs that are wholly owned subsidiaries of ITAC, holds property for exchangers in reverse exchange transactions.

Like-kind exchange deposits and reverse exchange property totaled approximately $ 763.9 million and $ 237.9 million as of December 31, 2021 and 2020, respectively.

2 unchanged sentences

Exchange services revenue includes earnings on these deposits;

therefore, investment income is shown as other revenue rather than investment income.

therefore, investment income is shown as other income rather than investment income.

These like-kind exchange funds are primarily invested in money market and other short-term investments.

Despite the widespread availability of vaccines, COVID-19 (including its variant strains) continues to impact U.S.

states where the Company conducts business.

The COVID-19 pandemic has negatively impacted worldwide economic activity and created significant volatility and disruptions of financial markets.

In response, the U.S.

government and its agencies have taken a number of significant measures to provide fiscal and monetary stimulus.

Such actions have included an unscheduled cut to the federal funds rate, the introduction of new programs to preserve market liquidity, extended unemployment and sick leave benefits, mortgage loan forbearance actions, low-interest loans for working capital access and payroll assistance, and other relief measures for both workers and businesses.

Many such actions have lapsed or otherwise been reduced as time has passed since the onset of the pandemic.

The Company has remained fully operational throughout the pandemic and did not have any reductions in workforce during 2021 or 2020.

A large number of the Company's employees are performing their job functions remotely.

The Company has not taken stimulus relief funding or incurred any other forms of debt.

Segment Information

10 unchanged sentences

Investment income 21,460 4,167 — 25,627

Net realized gain (loss) on investments 334 ( 1 ) — 333

Net realized gain on investments 779 1,090 — 1,869

Total revenues $ 327,854 $ 20,078 $ ( 18,434 ) $ 329,498

8 unchanged sentences

Investment income 11,622 1,398 — 13,020

Net realized gain on investments 1,251 89 — 1,340

Net realized gain (loss) on investments 334 ( 1 ) — 333

Total revenues $ 237,737 $ 11,003 $ ( 12,332 ) $ 236,408

47 unchanged sentences

Commissions to agents $ 20,249 $ 16,573

Business Combinations, Intangible Assets and Goodwill

Business Combinations, Intangible Assets, Goodwill and Title Plants

Intangible Assets

The estimated fair values of intangible assets recognized as the result of title insurance agency acquisitions, all Level 3 inputs, are principally based on values obtained from a third-party valuation service.

In accordance with ASC 350, Intangibles – Goodwill and Other , management determined that no events or changes in circumstances occurred during the periods ended December 31, 2020 and 2019 that would indicate that carrying amounts may not be recoverable, and therefore determined that no identifiable intangible assets were impaired.

In accordance with ASC 350, Intangibles – Goodwill and Other , management determined that no events or changes in circumstances occurred during the periods ended December 31, 2021 and 2020 that would indicate the carrying amounts may not be recoverable, and therefore, determined that no identifiable intangible assets were impaired.

Identifiable intangible assets consist of the following as of December 31:

10 unchanged sentences

Total $ 8,560

Goodwill and Title Plant

As of December 31, 2020, the Company has reported $ 4.4 million in goodwill and $ 690 thousand in a title plant, net of historical impairments, as the result of title agency acquisitions.

The title plant is included with other assets in the Consolidated Balance Sheets.

The estimated fair values of goodwill and the title plant, both Level 3 inputs, are principally based on values obtained from a third-party valuation service at the time of acquisition.

In accordance with ASC 350, Intangibles – Goodwill and Other , management determined that no events or changes in circumstances occurred during the periods ended December 31, 2020 and 2019 that would indicate the carrying amounts may not be recoverable, and therefore concluded that neither goodwill nor the title plant were impaired.

Goodwill and Title Plants

As of December 31, 2021, the Company recognized $ 7.2 million in goodwill and $ 857 thousand in title plants, net of impairments, as the result of title insurance agency acquisitions.

The title plants are included with other assets in the Consolidated Balance Sheets.

The fair values of goodwill and the title plants as of the date of acquisition, both Level 3 inputs, were principally based on values obtained from an independent third-party valuation service.

In accordance with ASC 350, management determined that no events or changes in circumstances occurred during the periods ended December 31, 2021 and 2020 that would indicate the carrying amounts may not be recoverable, and therefore, determined that there were no goodwill or title plant impairments.

Accumulated Other Comprehensive Income

5 unchanged sentences

Beginning balance at January 1 $ 4,470 $ ( 144 ) $ 4,326

Other comprehensive income (loss) before reclassifications 991 ( 112 ) 879

Other comprehensive loss before reclassifications ( 1,085 ) — ( 1,085 )

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive income (loss) 1,338 ( 112 ) 1,226

( 15 ) — ( 15 )

Net current-period other comprehensive loss ( 1,100 ) — ( 1,100 )

Ending balance $ 3,370 $ ( 144 ) $ 3,226

4 unchanged sentences

Beginning balance at January 1 $ 3,132 $ ( 32 ) $ 3,100

Other comprehensive income before reclassifications 2,151 — 2,151

Other comprehensive income (loss) before reclassifications 991 ( 112 ) 879

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive income 2,151 — 2,151

Net current-period other comprehensive income (loss) 1,338 ( 112 ) 1,226

Ending balance $ 4,470 $ ( 144 ) $ 4,326

4 unchanged sentences

Accumulated Other

Comprehensive Income Affected Line Item in the Consolidated

Comprehensive Income Affected Line Item in the

Statements of Operations

5 unchanged sentences

Net of Tax $ 15

Amortization related to postretirement benefit plans:

Prior year service cost $ —

Unrecognized loss —

Total $ — (b)

Tax — Provision for Income Taxes

Net of Tax $ —

Reclassifications for the period $ 15

3 unchanged sentences

Accumulated Other

Comprehensive Income Affected Line Item in the Consolidated

Comprehensive Income Affected Line Item in the

Statements of Operations

5 unchanged sentences

Net of Tax $ ( 347 )

Amortization related to postretirement benefit plans:

Prior year service cost $ —

Unrecognized loss —

Total $ — (b)

Tax — Provision for Income Taxes

Net of Tax $ —

Reclassifications for the period $ ( 347 )

(b) These accumulated other comprehensive income components are not reclassified to net income in their entirety in the same reporting period.

The amounts are presented within personnel expenses on the Consolidated Statements of Operations as amortized.

Amortization related to postretirement benefit plans is included in the computation of net periodic pension costs, as discussed in Note 10.

Revenue Recognition

ASU 2014-09, Revenue from Contracts with Customers (Topic 606) requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Revenue from Contracts with Customers

ASC 606, Revenue from Contracts with Customers , requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

This guidance does not apply to revenue associated with insurance contracts (including title insurance policies), financial instruments and lease contracts;

and therefore is primarily applicable to the following Company revenue categories.

Escrow and other title-related fees - The Company’s title segment recognizes commission revenue and fees related to items such as searches, settlements, commitments and other ancillary services.

Escrow and other title-related fees:

The Company’s title segment recognizes commission revenue and fees related to items such as searches, settlements, commitments and other ancillary services.

Escrow and other title-related fees are recognized as revenue at the time of the related transactions as the earnings process, or performance obligation, is then considered to be complete.

Non-title services - Through various subsidiaries, the Company offers management services, tax-deferred real property exchange services, investment management and trust services.

Non-title services:

Through various subsidiaries, the Company offers management services, tax-deferred real property exchange services, investment management and trust services.

Nonrefundable exchange fees are recognized as revenue upon receipt of the funds, which is at the time of closing of the initial sale of property.

All other non-title service fees are recognized as revenue as performance obligations are completed.

Other - The Company occasionally recognizes revenue from other miscellaneous contracts which can include, but is not limited to seminar and education registration fees and software licensing contracts.

The Company occasionally recognizes revenue from other miscellaneous contracts which can include, but is not limited to seminar and education registration fees and software licensing contracts.

These revenue streams are deemed immaterial to the operations of the Company, and revenue is recognized when, or as, performance obligations are completed.

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data