What changed in this filing

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Item 1. Financial Statements

2022-11-08 compared with 2022-08-09 · 172 added, 173 removed, 674 unchanged (34% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

As of June 30, 2022 and December 31, 2021

As of September 30, 2022 and December 31, 2021

(in thousands)

September 30,

2022 December 31,

1 unchanged sentence

Fixed maturity securities, available-for-sale, at fair value (amortized cost:

June 30, 2022:

September 30, 2022:

December 31, 2021:

1 unchanged sentence

Equity securities, at fair value (cost:

June 30, 2022:

September 30, 2022:

December 31, 2021:

13 unchanged sentences

Other assets 2,320 1,771

Current income taxes receivable 390 —

Current income taxes recoverable 3,164 —

$ 332,803 $ 331,488

14 unchanged sentences

Common stock – no par value ( 10,000 authorized shares;

1,897 and 1,895 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively, excluding in each period 292 shares of common stock held by the Company)

1,897 and 1,895 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively, excluding in each period 292 shares of common stock held by the Company)

Retained earnings

239,792 225,861

Accumulated other comprehensive income 420 3,226

Accumulated other comprehensive (loss) income ( 751 ) 3,226

Total stockholders' equity

5 unchanged sentences

Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2022 and 2021

For the Three and Nine Months Ended September 30, 2022 and 2021

(in thousands, except per share amounts)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

25 unchanged sentences

Consolidated Statements of Comprehensive Income

For the Three and Six Months Ended June 30, 2022 and 2021

For the Three and Nine Months Ended September 30, 2022 and 2021

(in thousands)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income $ 7,913 $ 14,503 $ 16,377 $ 48,108

Other comprehensive (loss) income, before income tax:

Other comprehensive loss, before income tax:

Accumulated postretirement benefit obligation adjustment 17 — 228 —

Net unrealized (losses) gains on investments arising during the period ( 1,178 ) 59 ( 3,942 ) ( 691 )

Net unrealized losses on investments arising during the period ( 1,595 ) ( 433 ) ( 5,537 ) ( 1,064 )

Reclassification adjustment for sale of securities included in net income 58 11 104 ( 19 )

Reclassification adjustment for write-down of securities included in net income 35 — 162 —

Other comprehensive (loss) income, before income tax ( 1,013 ) 112 ( 3,558 ) ( 661 )

Income tax (benefit) expense related to postretirement health benefits ( 2 ) — 44 —

Income tax (benefit) expense related to net unrealized (losses) gains on investments arising during the period ( 252 ) 12 ( 835 ) ( 146 )

Income tax expense related to reclassification adjustment for sale of securities included in net income 10 11 10 6

Other comprehensive loss, before income tax ( 1,485 ) ( 422 ) ( 5,043 ) ( 1,083 )

Income tax expense related to postretirement health benefits 4 — 48 —

Income tax benefit related to net unrealized losses on investments arising during the period ( 338 ) ( 91 ) ( 1,173 ) ( 225 )

Income tax expense (benefit) related to reclassification adjustment for sale of securities included in net income 12 2 22 ( 4 )

Income tax expense related to reclassification adjustment for write-down of securities included in net income 8 — 37 —

Net income tax (benefit) expense on other comprehensive (loss) income ( 215 ) 23 ( 752 ) ( 140 )

Other comprehensive (loss) income ( 798 ) 89 ( 2,806 ) ( 521 )

Net income tax benefit on other comprehensive loss ( 314 ) ( 89 ) ( 1,066 ) ( 229 )

Other comprehensive loss ( 1,171 ) ( 333 ) ( 3,977 ) ( 854 )

Comprehensive Income $ 6,742 $ 14,170 $ 12,400 $ 47,254

2 unchanged sentences

Consolidated Statements of Stockholders’ Equity

For the Three and Six Months Ended June 30, 2022 and 2021

For the Three and Nine Months Ended September 30, 2022 and 2021

(in thousands, except per share amounts)

Common Stock Retained Earnings Accumulated

Comprehensive

Common Stock Retained Earnings Accumulated Other Comprehensive (Loss) Income Total

Stockholders’

Shares Amount

Balance, March 31, 2021

Balance, June 30, 2021

1,894 $ — $ 228,133 $ 3,805 $ 231,938

3 unchanged sentences

Share-based compensation expense related to stock appreciation rights

Net unrealized gain on investments 89 89

Balance, June 30, 2021

Net unrealized loss on investments ( 333 ) ( 333 )

Balance, September 30, 2021

1,894 $ — $ 241,833 $ 3,472 $ 245,305

Balance, March 31, 2022

Balance, June 30, 2022

1,897 $ — $ 232,759 $ 420 $ 233,179

2 unchanged sentences

( 873 ) ( 873 )

Repurchases of common stock — ( 86 ) ( 86 )

Share-based compensation expense related to stock appreciation rights

1 unchanged sentence

Net unrealized loss on investments ( 1,184 ) ( 1,184 )

Balance, June 30, 2022

Balance, September 30, 2022

1,897 $ — $ 239,792 $ ( 751 ) $ 239,041

Common Stock Retained Earnings Accumulated

Comprehensive

Common Stock Retained Earnings Accumulated Other Comprehensive (Loss) Income Total

Stockholders’

9 unchanged sentences

Net unrealized loss on investments ( 854 ) ( 854 )

Balance, June 30, 2021

Balance, September 30, 2021

1,894 $ — $ 241,833 $ 3,472 $ 245,305

4 unchanged sentences

( 2,618 ) ( 2,618 )

Repurchases of common stock — ( 86 ) ( 86 )

Exercise of stock appreciation rights

3 unchanged sentences

Net unrealized loss on investments ( 4,157 ) ( 4,157 )

Balance, June 30, 2022

Balance, September 30, 2022

1,897 $ — $ 239,792 $ ( 751 ) $ 239,041

2 unchanged sentences

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2022 and 2021

For the Nine Months Ended September 30, 2022 and 2021

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Operating Activities

16 unchanged sentences

Increase in current income taxes receivable ( 3,164 ) —

Decrease in accounts payable and accrued liabilities ( 3,613 ) ( 1,296 )

(Decrease) increase in accounts payable and accrued liabilities ( 1,702 ) 1,907

Increase (decrease) in operating lease liabilities 1,060 ( 245 )

Decrease in current income taxes payable ( 3,329 ) ( 638 )

(Decrease) increase in current income taxes payable ( 3,329 ) 66

Payments of claims, net of recoveries ( 2,576 ) ( 1,849 )

15 unchanged sentences

Financing Activities

Repurchases of common stock ( 86 ) —

Exercise of stock appreciation rights ( 1 ) ( 1 )

1 unchanged sentence

Net cash used in financing activities ( 2,705 ) ( 2,577 )

Net (Decrease) Increase in Cash and Cash Equivalents ( 1,682 ) 17,860

Net Increase in Cash and Cash Equivalents 4,212 34,787

Cash and Cash Equivalents, Beginning of Period 37,168 13,723

1 unchanged sentence

Consolidated Statements of Cash Flows, continued

Six Months Ended

Nine Months Ended

September 30,

Supplemental Disclosures:

2 unchanged sentences

Non-Cash Investing and Financing Activities:

Non-cash net unrealized loss on investments, net of deferred tax benefit of $ 835 and $ 140 for June 30, 2022 and 2021, respectively

Non-cash net unrealized loss on investments, net of deferred tax benefit of $ 1,114 and $ 229 for September 30, 2022 and 2021, respectively

$ 4,157 $ 854

Adjustments to postretirement benefits obligation, net of deferred tax expense of $( 44 ) and $ 0 for June 30, 2022 and 2021, respectively

Adjustments to postretirement benefits obligation, net of deferred tax expense of $( 48 ) and $ 0 for September 30, 2022 and 2021, respectively

$ ( 180 ) $ —

9 unchanged sentences

Notes to Consolidated Financial Statements

June 30, 2022

September 30, 2022

Note 1 – Basis of Presentation and Significant Accounting Policies

5 unchanged sentences

All such adjustments are of a normal recurring nature.

Operating results for the three- and six-month periods ended June 30, 2022 are not necessarily indicative of the financial condition and results that may be expected for the year ending December 31, 2022 or any other interim period.

Operating results for the three- and nine-month periods ended September 30, 2022 are not necessarily indicative of the financial condition and results that may be expected for the year ending December 31, 2022 or any other interim period.

Use of Estimates and Assumptions – The preparation of the Company’s unaudited 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 unaudited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.

2 unchanged sentences

Note 2 – Reserve for Claims

Activity in the reserve for claims for the six-month period ended June 30, 2022 and the year ended December 31, 2021 is summarized as follows:

(in thousands) June 30, 2022 December 31, 2021

Activity in the reserve for claims for the nine-month period ended September 30, 2022 and the year ended December 31, 2021 is summarized as follows:

(in thousands) September 30, 2022 December 31, 2021

Balance, beginning of period $ 36,754 $ 33,584

3 unchanged sentences

$ 37,630 $ 36,754

The total reserve for all reported and unreported losses the Company incurred through June 30, 2022 is represented by the reserve for claims on the unaudited Consolidated Balance Sheets.

The total reserve for all reported and unreported losses the Company incurred through September 30, 2022 is represented by the reserve for claims on the unaudited Consolidated Balance Sheets.

The Company's reserves for unpaid losses and loss 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 claims that have been incurred but not yet reported (“IBNR”).

Despite the variability of such estimates, management believes that the total reserve for claims is adequate to cover claim losses which might result from pending and future claims under title insurance policies issued through June 30, 2022.

Management continually reviews and adjusts its reserve for claims estimates to reflect its loss experience and any new information that becomes available.

1 unchanged sentence

A summary of the Company’s reserve for claims, broken down into its components of known title claims and IBNR, follows:

(in thousands, except percentages) June 30, 2022 % December 31, 2021 %

(in thousands, except percentages) September 30, 2022 % December 31, 2021 %

Known title claims $ 4,033 10.7 $ 3,317 9.0

10 unchanged sentences

Under the treasury stock method, when share-based awards are assumed to be exercised, (a) the exercise price of a share-based award and (b) the amount of compensation cost, if any, for future services that the Company has not yet recognized, are assumed to be used to repurchase shares in the current period.

The following table sets forth the computation of basic and diluted earnings per share for the three- and six-month periods ended June 30:

The following table sets forth the computation of basic and diluted earnings per share for the three- and nine-month periods ended September 30:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts)

7 unchanged sentences

Diluted earnings per common share $ 4.17 $ 7.63 $ 8.63 $ 25.34

There were 13 thousand and 14 thousand potential shares excluded from the computation of diluted earnings per share for the three-month periods ended June 30, 2022 and 2021, respectively, due to the out-of-the-money status of the related share-based awards.

There were 13 thousand and 14 thousand potential shares excluded from the computation of diluted earnings per share for the six-month periods ended June 30, 2022 and 2021, respectively, due to the out-of-the-money status of the related share-based awards.

There were 26 thousand and 14 thousand potential shares excluded from the computation of diluted earnings per share for the three-month periods ended September 30, 2022 and 2021, respectively, due to the out-of-the-money status of the related share-based awards.

There were 13 thousand and 14 thousand potential shares excluded from the computation of diluted earnings per share for the nine-month periods ended September 30, 2022 and 2021, respectively, due to the out-of-the-money status of the related share-based awards.

The Company historically has adopted employee stock award plans under which restricted stock, options or stock appreciation rights ("SARs") exercisable for the Company's stock may be granted to key employees or directors of the Company.

2 unchanged sentences

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.

As of June 30, 2022, the only outstanding awards under the plans were SARs, which expire within seven years or less from the date of grant.

As of September 30, 2022, the only outstanding awards under the plans were SARs, which expire within seven years or less from the date of grant.

All outstanding SARs vest and are exercisable within five years or less from the date of grant, and all SARs issued to date have been share-settled only.

6 unchanged sentences

Outstanding as of January 1, 2021

36 $ 139.16 4.38 $ 903

SARs granted 5 184.26

3 unchanged sentences

SARs exercised ( 4 ) 89.23

Outstanding as of June 30, 2022 36 $ 159.32 4.16 $ 407

Exercisable as of June 30, 2022 27 $ 161.95 3.65 $ 324

Unvested as of June 30, 2022 9 $ 151.27 5.73 $ 83

Outstanding as of September 30, 2022 41 $ 157.51 4.29 $ 219

Exercisable as of September 30, 2022 28 $ 162.15 3.53 $ 210

Unvested as of September 30, 2022 13 $ 147.24 5.96 $ 9

During the second quarters of both 2022 and 2021, the Company issued 5 thousand share-settled SARs to directors 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.

During the third quarter of 2022, the Company also issued 5 thousand share-settled SARs to employees of the Company.

There were no such third quarter issuances in 2021.

The fair value of each award is estimated on the date of grant using the Black-Scholes option valuation model.

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

8 unchanged sentences

Yield Rate 0.6 % 1.1 %

There was approximately $ 180 thousand and $ 139 thousand of compensation expense relating to SARs vesting on or before June 30, 2022 and 2021, respectively, included in personnel expenses in the unaudited Consolidated Statements of Operations.

As of June 30, 2022, there was $ 441 thousand of unrecognized compensation expense related to unvested share-based compensation arrangements granted under the Company’s stock award plans.

There was approximately $ 259 thousand and $ 206 thousand of compensation expense relating to SARs vesting on or before September 30, 2022 and 2021, respectively, included in personnel expenses in the unaudited Consolidated Statements of Operations.

As of September 30, 2022, there was $ 644 thousand of unrecognized compensation expense related to unvested share-based compensation arrangements granted under the Company’s stock award plans.

Note 4 – Segment Information

3 unchanged sentences

Title insurance policies insure titles to real estate.

Provided below is selected financial information about the Company's operations by segment for the periods ended June 30, 2022 and 2021:

Provided below is selected financial information about the Company's operations by segment for the periods ended September 30, 2022 and 2021:

Three Months Ended

June 30, 2022 (in thousands) Title

September 30, 2022 (in thousands) Title

Insurance All

2 unchanged sentences

Investment loss ( 982 ) ( 251 ) — ( 1,233 )

Net realized gain (loss) on investments 2,460 ( 422 ) — 2,038

Net realized gain on investments 1,582 899 — 2,481

Total revenues $ 79,412 $ 4,750 $ ( 6,164 ) $ 77,998

Operating expenses 71,516 2,406 ( 6,012 ) 67,910

Income (loss) before income taxes $ 4,160 $ ( 1,056 ) $ ( 151 ) $ 2,953

Income before income taxes $ 7,896 $ 2,344 $ ( 152 ) $ 10,088

Total assets $ 250,116 $ 82,687 $ — $ 332,803

Three Months Ended

June 30, 2021 (in thousands) Title

September 30, 2021 (in thousands) Title

Insurance All

7 unchanged sentences

Total assets $ 256,588 $ 78,842 $ — $ 335,430

Six Months Ended

June 30, 2022 (in thousands) Title

Nine Months Ended

September 30, 2022 (in thousands) Title

Insurance All

6 unchanged sentences

Operating expenses 206,938 8,424 ( 18,298 ) 197,064

Income (loss) before income taxes $ 12,460 $ ( 1,411 ) $ ( 303 ) $ 10,746

Income before income taxes $ 20,356 $ 933 $ ( 455 ) $ 20,834

$ 250,116 $ 82,687 $ — $ 332,803

Six Months Ended

June 30, 2021 (in thousands) Title

Nine Months Ended

September 30, 2021 (in thousands) Title

Insurance All

9 unchanged sentences

Note 5 – Retirement Agreements and Other Postretirement Benefits

The Company’s subsidiary, Investors Title Insurance Company ("ITIC"), is a party to employment agreements with key executives that provide for the continuation of certain employee benefits and other payments due under the agreements upon retirement, estimated to total $ 14.2 million and $ 13.4 million as of June 30, 2022 and December 31, 2021, respectively.

The executive employee benefits include health, dental, vision and life insurance and are unfunded.

These amounts are classified as accounts payable and accrued liabilities in the unaudited Consolidated Balance Sheets.

The following sets forth the net periodic benefit cost for the executive benefits for the periods ended June 30, 2022 and 2021:

The following sets forth the net periodic benefit cost for the executive benefits for the periods ended September 30, 2022 and 2021:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

1 unchanged sentence

Interest cost on the projected benefit obligation 5 8 19 22

Amortization of unrecognized gain ( 4 ) — ( 4 ) —

Amortization of unrecognized loss 4 — — —

Net periodic benefit cost $ 9 $ 8 $ 19 $ 22

2 unchanged sentences

The estimated fair value, gross unrealized holding gains, gross unrealized holding losses and amortized cost for fixed maturity securities by major classification are as follows:

As of June 30, 2022 (in thousands) Amortized

As of September 30, 2022 (in thousands) Amortized

Losses Estimated Fair

20 unchanged sentences

The special revenue category for both periods presented includes approximately 40 individual fixed maturity securities with revenue sources from a variety of industry sectors.

The scheduled maturities of fixed maturity securities at June 30, 2022 are as follows:

The scheduled maturities of fixed maturity securities at September 30, 2022 are as follows:

Available-for-Sale

7 unchanged sentences

Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties.

The following table presents the gross unrealized losses on fixed maturity securities and the estimated fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous loss position at June 30, 2022 and December 31, 2021:

Less than 12 Months 12 Months or Longer Total

As of June 30, 2022 (in thousands) Estimated

As of September 30, 2022 (in thousands) Estimated

Value Unrealized

3 unchanged sentences

Value Unrealized

General obligations of U.S.

states, territories and political subdivisions $ 5,582 $ ( 43 ) $ — $ — $ 5,582 $ ( 43 )

Special revenue issuer obligations of U.S.

19 unchanged sentences

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.

Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

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 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.

The current 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.

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 41 and 9 fixed maturity securities had unrealized losses at June 30, 2022 and December 31, 2021, respectively.

A total of 54 and 9 fixed maturity securities had unrealized losses at September 30, 2022 and December 31, 2021, 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 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 $ 127 thousand in other-than-temporary impairment charges related to fixed maturity securities for the six-month period ended June 30, 2022 and had no recorded other-than-temporary impairment charges for six-month period ended June 30, 2021.

The Company recorded $ 162 thousand in other-than-temporary impairment charges related to fixed maturity securities for the nine-month period ended September 30, 2022 and had no recorded other-than-temporary impairment charges for nine-month period ended September 30, 2021.

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

1 unchanged sentence

The cost and estimated fair value of equity securities are as follows:

As of June 30, 2022 (in thousands)

As of September 30, 2022 (in thousands)

Cost Estimated Fair

9 unchanged sentences

Net Realized Investment Gains

Gross realized gains and losses on sales of investments for the six-month periods ended June 30, 2022 and 2021 are summarized as follows:

Gross realized gains and losses on sales of investments for the nine-month periods ended September 30, 2022 and 2021 are summarized as follows:

(in thousands) 2022 2021

8 unchanged sentences

( 209 ) ( 677 )

Other-than-temporary impairment of securities ( 127 ) —

Write-down of securities ( 162 ) —

$ ( 475 ) $ ( 711 )

Net realized gains from securities $ 6,645 $ 770

$ 4,194 $ 502

Gross realized gains (losses) on other investments:

3 unchanged sentences

Net realized investment gains $ 6,266 $ 771

$ 3,785 $ 503

Realized gains and losses are determined on the specific identification method.

3 unchanged sentences

this power resides with a third-party general partner or managing member that cannot be removed except for cause.

The following table sets forth details about the Company's variable interest investments in VIEs, which are structured either as limited partnerships ("LPs") or limited liability companies ("LLCs"), as of June 30, 2022:

(in thousands) Balance Sheet Classification Carrying Value Estimated Fair Value Maximum Potential Loss (a)

20 unchanged sentences

Generally, quotes obtained from the pricing service for instruments classified as Level 2 are not adjusted and are not binding.

As of June 30, 2022 and December 31, 2021, the Company did not adjust any Level 2 fair values.

As of September 30, 2022 and December 31, 2021, the Company did not adjust any Level 2 fair values.

A number of the Company’s investment grade corporate debt securities are frequently traded in active markets, and trading prices are consequently available for these securities.

7 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.

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 unaudited Consolidated Statement of Operations when recognized.

Measurement alternative equity investments

3 unchanged sentences

The carrying amount for accrued interest and dividends is a reasonable estimate of fair value due to the short-term maturity of these assets.

The following table presents, by level, fixed maturity securities carried at estimated fair value as of June 30, 2022 and December 31, 2021:

As of June 30, 2022 (in thousands) Level 1 Level 2 * Level 3 Total

The following table presents, by level, fixed maturity securities carried at estimated fair value as of September 30, 2022 and December 31, 2021:

As of September 30, 2022 (in thousands) Level 1 Level 2 * Level 3 Total

Fixed maturity securities:

10 unchanged sentences

*Denotes fair market value obtained from pricing services.

The following table presents, by level, estimated fair values of equity investments and other financial instruments as of June 30, 2022 and December 31, 2021:

As of June 30, 2022 (in thousands) Level 1 Level 2 Level 3 Total

The following table presents, by level, estimated fair values of equity investments and other financial instruments as of September 30, 2022 and December 31, 2021:

As of September 30, 2022 (in thousands) Level 1 Level 2 Level 3 Total

Financial assets:

25 unchanged sentences

$ 160,768 $ — $ 8,688 $ 169,456

The Company did not hold any Level 3 category debt or marketable equity investment securities as of June 30, 2022 or December 31, 2021.

The Company did not hold any Level 3 category debt or marketable equity investment securities as of September 30, 2022 or December 31, 2021.

There were no transfers into or out of Levels 1, 2 or 3 during the periods presented.

11 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.

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.

Certain equity investments under the measurement alternative 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 unaudited Consolidated Statements of Operations.

There were no impairments of such investments made during the six-month period ended June 30, 2022 or the twelve-month period ended December 31, 2021.

The following table presents a rollforward of equity investments under the measurement alternative and real estate investments as of June 30, 2022 and December 31, 2021:

There were no impairments of such investments made during the nine-month period ended September 30, 2022 or the twelve-month period ended December 31, 2021.

The following table presents a rollforward of equity investments under the measurement alternative as of September 30, 2022 and December 31, 2021:

(in thousands) Balance,

1 unchanged sentence

Paid Sales, Returns of Capital and Other Reductions Balance,

June 30, 2022

September 30, 2022

Other investments:

Real Estate $ 4,987 $ — $ — $ — $ — $ 4,987

Equity investments in unconsolidated affiliates, measurement alternative

6 unchanged sentences

Other investments:

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

Equity investments in unconsolidated affiliates, measurement alternative

10 unchanged sentences

Like-Kind Exchanges Proceeds – 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 $ 484.4 million and $ 763.9 million as of June 30, 2022 and December 31, 2021, respectively.

Another 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 $ 477.9 million and $ 763.9 million as of September 30, 2022 and December 31, 2021, respectively.

These amounts are not considered assets of the Company and, therefore, are excluded from the accompanying unaudited Consolidated Balance Sheets;

2 unchanged sentences

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.

COVID-19 – 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 took a number of significant measures to provide fiscal and monetary stimulus.

Such actions 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 2022 or 2021.

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.

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

COVID-19 – COVID-19 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 gover nmental restriction, potential decreases in net premiums written in the future, and future fluctuations in the Company's investment portfolio.

Note 8 – Related Party Transactions

5 unchanged sentences

(in thousands) As of

June 30, 2022 As of

September 30, 2022 As of

December 31, 2021

4 unchanged sentences

(in thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

The Company evaluates nonorganic growth opportunities, such as acquisitions of title insurance agencies, from time to time in the ordinary course of business.

During the six-month period ended June 30, 2022, a subsidiary of the Company acquired a title insurance agency doing business in the state of Texas.

During the nine-month period ended September 30, 2022, a subsidiary of the Company acquired a title insurance agency, now wholly owned, doing business in the state of Texas.

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 an independent 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 six-month periods ended June 30, 2022 and 2021 that would indicate the 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 nine-month periods ended September 30, 2022 and 2021 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:

(in thousands) As of

June 30, 2022 As of

September 30, 2022 As of

December 31, 2021

10 unchanged sentences

Goodwill and Title Plants

As of June 30, 2022, the Company recognized $ 9.7 million in goodwill and $ 1.4 million in title plants, net of impairments, as the result of title insurance agency acquisitions.

As of September 30, 2022, the Company recognized $ 9.6 million in goodwill and $ 1.4 million in title plants, net of impairments, as the result of title insurance agency acquisitions.

The title plants are included with other assets in the unaudited 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 six-month periods ended June 30, 2022 and 2021 that would indicate the carrying amounts may not be recoverable, and therefore, determined that there were no goodwill or title plant impairments.

Note 10 – Accumulated Other Comprehensive Income

The following table provides changes in the balances of each component of accumulated other comprehensive income, net of tax, for the three- and six-month periods ended June 30, 2022 and 2021:

In accordance with ASC 350, management determined that no events or changes in circumstances occurred during the nine-month periods ended September 30, 2022 and 2021 that would indicate the carrying amounts may not be recoverable, and, therefore, determined that there were no goodwill or title plant impairments.

Note 10 – Accumulated Other Comprehensive (Loss) Income

The following table provides changes in the balances of each component of accumulated other comprehensive income, net of tax, for the three- and nine-month periods ended September 30, 2022 and 2021:

Three Months Ended

June 30, 2022 (in thousands) Unrealized Gains and Losses

September 30, 2022 (in thousands) Unrealized Gains and Losses

On Available-for-Sale

1 unchanged sentence

Benefits Plans

Beginning balance at March 31 $ 1,189 $ 29 $ 1,218

Other comprehensive loss before reclassifications ( 926 ) ( 6 ) ( 932 )

Amounts reclassified from accumulated other comprehensive income 134 — 134

Net current-period other comprehensive loss ( 792 ) ( 6 ) ( 798 )

Beginning balance at June 30

$ 397 $ 23 $ 420

Other comprehensive (loss) income before calculations ( 1,257 ) 13 ( 1,244 )

Amounts reclassified from accumulated other comprehensive (loss) income

Net current-period other comprehensive (loss) income ( 1,184 ) 13 ( 1,171 )

Ending balance $ ( 787 ) $ 36 $ ( 751 )

Three Months Ended

June 30, 2021 (in thousands) Unrealized Gains and Losses

September 30, 2021 (in thousands) Unrealized Gains and Losses

On Available-for-Sale

1 unchanged sentence

Benefits Plans Total

Beginning balance at March 31 $ 3,860 $ ( 144 ) $ 3,716

Other comprehensive income before reclassifications 47 — 47

Amounts reclassified from accumulated other comprehensive income 42 — 42

Net current-period other comprehensive income 89 — 89

Beginning balance at June 30

$ 3,949 $ ( 144 ) $ 3,805

Other comprehensive (loss) income before calculations ( 342 ) — ( 342 )

Amounts reclassified from accumulated other comprehensive (loss) income

Net current-period other comprehensive (loss) income ( 333 ) — ( 333 )

Ending balance

$ 3,616 $ ( 144 ) $ 3,472

Six Months Ended

June 30, 2022 (in thousands) Unrealized Gains and Losses

Nine Months Ended

September 30, 2022 (in thousands) Unrealized Gains and Losses

On Available-for-Sale

2 unchanged sentences

Beginning balance at January 1 $ 3,370 $ ( 144 ) $ 3,226

Other comprehensive (loss) income before reclassifications ( 3,107 ) 167 ( 2,940 )

Amounts reclassified from accumulated other comprehensive income 134 — 134

Other comprehensive (loss) income before calculations ( 4,364 ) 180 ( 4,184 )

Amounts reclassified from accumulated other comprehensive (loss) income

Net current-period other comprehensive (loss) income ( 4,157 ) 180 ( 3,977 )

Ending balance $ ( 787 ) $ 36 $ ( 751 )

Six Months Ended

June 30, 2021 (in thousands) Unrealized Gains and Losses

Nine Months Ended

September 30, 2021 (in thousands) Unrealized Gains and Losses

On Available-for-Sale

2 unchanged sentences

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

Other comprehensive loss before reclassifications ( 545 ) — ( 545 )

Amounts reclassified from accumulated other comprehensive income 24 — 24

Net current-period other comprehensive loss ( 521 ) — ( 521 )

Other comprehensive (loss) income before calculations ( 839 ) — ( 839 )

Amounts reclassified from accumulated other comprehensive (loss) income

( 15 ) — ( 15 )

Net current-period other comprehensive (loss) income ( 854 ) — ( 854 )

Ending balance

$ 3,616 $ ( 144 ) $ 3,472

The following table provides significant amounts reclassified out of each component of accumulated other comprehensive income for the three- and six-month periods ended June 30, 2022 and 2021:

The following table provides significant amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three- and nine-month periods ended September 30, 2022 and 2021:

Three Months Ended

June 30, 2022 (in thousands)

Details about Accumulated Other

Comprehensive Income Components (in thousands) Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statements of Operations

September 30, 2022 (in thousands)

Details about Accumulated Other Comprehensive (Loss) Income Components

Amount Reclassified from Accumulated Other Comprehensive (Loss) Income

Affected Line Item in the Consolidated Statements of Operations

Unrealized gains and losses on available-for-sale securities:

Net realized loss on investments $ ( 58 )

Other-than-temporary impairments ( 127 )

Write-down of securities ( 35 )

Total $ ( 93 ) Net realized investment gains

3 unchanged sentences

Three Months Ended

June 30, 2021 (in thousands)

Details about Accumulated Other

Comprehensive Income Components (in thousands) Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statements of Operations

September 30, 2021 (in thousands)

Details about Accumulated Other Comprehensive (Loss) Income Components

Amount Reclassified from Accumulated Other Comprehensive (Loss) Income

Affected Line Item in the Consolidated Statements of Operations

Unrealized gains and losses on available-for-sale securities:

Net realized loss on investments $ ( 11 )

Other-than-temporary impairments —

Write-down of securities —

Total $ ( 11 ) Net realized investment gains

2 unchanged sentences

Reclassifications for the period $ ( 9 )

Six Months Ended

June 30, 2022 (in thousands)

Details about Accumulated Other

Comprehensive Income Components (in thousands) Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statements of Operations

Nine Months Ended

September 30, 2022 (in thousands)

Details about Accumulated Other Comprehensive (Loss) Income Components

Amount Reclassified from Accumulated Other Comprehensive (Loss) Income

Affected Line Item in the Consolidated Statements of Operations

Unrealized gains and losses on available-for-sale securities:

Net realized loss on investments $ ( 104 )

Other-than-temporary impairments ( 127 )

Write-down of securities ( 162 )

Total $ ( 266 ) Net realized investment gains

2 unchanged sentences

Reclassifications for the period $ ( 207 )

Six Months Ended

June 30, 2021 (in thousands)

Details about Accumulated Other

Comprehensive Income Components (in thousands) Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statements of Operations

Nine Months Ended

September 30, 2021 (in thousands)

Details about Accumulated Other Comprehensive (Loss) Income Components

Amount Reclassified from Accumulated Other Comprehensive (Loss) Income

Affected Line Item in the Consolidated Statements of Operations

Unrealized gains and losses on available-for-sale securities:

Net realized loss on investments $ ( 30 )

Other-than-temporary impairments —

Net realized gain on investments $ 19

Write-down of securities —

Total $ 19 Net realized investment gains

4 unchanged sentences

GAAP 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.

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:

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

5 unchanged sentences

Net premiums written 66,658 72,345 199,409 201,349

Investment-related (loss) revenue ( 8,117 ) 7,392 ( 10,033 ) 12,909

Investment-related revenue (loss) 1,248 2,545 ( 8,785 ) 15,454

Other 277 217 924 4,572

13 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

7 unchanged sentences

(in thousands) As of

June 30, 2022 As of

September 30, 2022 As of

December 31, 2021

2 unchanged sentences

Total operating lease liabilities $ 6,389 $ 5,329

The future minimum lease payments under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of June 30, 2022, are summarized as follows:

The future minimum lease payments under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of September 30, 2022, are summarized as follows:

Year Ended (in thousands)

4 unchanged sentences

Supplemental lease information is as follows:

June 30, 2022 As of

September 30, 2022 As of

December 31, 2021

3 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-Q

Item 1. Financial Statements