What changed in this filing

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Item 1. Financial Statements

2023-08-09 compared with 2023-05-09 · 239 added, 115 removed, 613 unchanged (37% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

As of March 31, 2023 and December 31, 2022

As of June 30, 2023 and December 31, 2022

(in thousands)

2 unchanged sentences

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

March 31, 2023:

June 30, 2023:

December 31, 2022:

1 unchanged sentence

Equity securities, at fair value (cost:

March 31, 2023:

June 30, 2023:

December 31, 2022:

25 unchanged sentences

83,228 98,746

Commitments and Contingencies (Note 7) — —

Commitments and Contingencies — —

Stockholders’ Equity:

2 unchanged sentences

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

1,898 and 1,897 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively, excluding in each period 292 shares of common stock held by the Company)

1,891 and 1,897 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively, excluding in each period 292 shares of common stock held by the Company)

Retained earnings

8 unchanged sentences

Consolidated Statements of Operations

For the Three Months Ended March 31, 2023 and 2022

For the Three and Six Months Ended June 30, 2023 and 2022

(in thousands, except per share amounts)

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net premiums written $ 44,005 $ 69,626 $ 82,971 $ 132,751

3 unchanged sentences

Other investment income 1,648 1,106 2,401 2,443

Net realized investment gains 7,233 1,747

Changes in the estimated fair value of equity security investments ( 6,790 ) ( 5,915 )

Net investment gains (losses) 1,092 ( 10,134 ) 1,535 ( 14,302 )

Other 250 348 390 647

17 unchanged sentences

Consolidated Statements of Comprehensive Income

For the Three Months Ended March 31, 2023 and 2022

For the Three and Six Months Ended June 30, 2023 and 2022

(in thousands)

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net income $ 7,585 $ 2,279 $ 8,766 $ 8,464

Other comprehensive income (loss), before income tax:

Other comprehensive loss, before income tax:

Accumulated postretirement benefit obligation adjustment ( 7 ) ( 8 ) 134 211

Net unrealized gains (losses) on investments arising during the period 233 ( 2,764 )

Net unrealized losses on investments arising during the period ( 530 ) ( 1,178 ) ( 297 ) ( 3,942 )

Reclassification adjustment for sale of securities included in net income — 46 — 46

Reclassification adjustment for write-down of securities included in net income 30 127 112 127

Other comprehensive income (loss), before income tax 456 ( 2,545 )

Income tax expense related to postretirement health benefits 30 46

Income tax expense (benefit) related to net unrealized gains (losses) on investments arising during the period 47 ( 583 )

Other comprehensive loss, before income tax ( 507 ) ( 1,013 ) ( 51 ) ( 3,558 )

Income tax (benefit) expense related to postretirement health benefits ( 2 ) ( 2 ) 28 44

Income tax benefit related to net unrealized losses on investments arising during the period ( 113 ) ( 252 ) ( 66 ) ( 835 )

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

Income tax expense related to reclassification adjustment for write-down of securities included in net income 7 29 26 29

Net income tax expense (benefit) on other comprehensive income (loss) 96 ( 537 )

Other comprehensive income (loss) 360 ( 2,008 )

Net income tax benefit on other comprehensive loss ( 108 ) ( 215 ) ( 12 ) ( 752 )

Other comprehensive loss ( 399 ) ( 798 ) ( 39 ) ( 2,806 )

Comprehensive Income $ 7,186 $ 1,481 $ 8,727 $ 5,658

2 unchanged sentences

Consolidated Statements of Stockholders’ Equity

For the Three Months Ended March 31, 2023 and 2022

For the Three and Six Months Ended June 30, 2023 and 2022

(in thousands, except per share amounts)

2 unchanged sentences

Shares Amount

Balance, March 31, 2022

1,897 $ — $ 231,274 $ 1,218 $ 232,492

Net income 2,279 2,279

Dividends paid ($ 0.46 per share)

( 872 ) ( 872 )

Share-based compensation expense related to stock appreciation rights

Accumulated postretirement benefit obligation adjustment ( 6 ) ( 6 )

Net unrealized loss on investments ( 792 ) ( 792 )

Balance, June 30, 2022

1,897 $ — $ 232,759 $ 420 $ 233,179

Balance, March 31, 2023

1,898 $ — $ 241,278 $ 560 $ 241,838

Net income 7,585 7,585

Dividends paid ($ 0.46 per share)

( 873 ) ( 873 )

Repurchases of common stock ( 7 ) ( 959 ) ( 959 )

Share-based compensation expense related to stock appreciation rights

Accumulated postretirement benefit obligation adjustment ( 5 ) ( 5 )

Net unrealized loss on investments ( 394 ) ( 394 )

Balance, June 30, 2023

1,891 $ — $ 247,092 $ 161 $ 247,253

Common Stock Retained Earnings Accumulated Other Comprehensive Income Total

Stockholders’

Shares Amount

Balance, December 31, 2021

8 unchanged sentences

Net unrealized loss on investments ( 2,973 ) ( 2,973 )

Balance, March 31, 2022

Balance, June 30, 2022

1,897 $ — $ 232,759 $ 420 $ 233,179

4 unchanged sentences

( 1,746 ) ( 1,746 )

Repurchases of common stock ( 7 ) ( 959 ) ( 959 )

Exercise of stock appreciation rights

1 unchanged sentence

Accumulated postretirement benefit obligation adjustment 106 106

Net unrealized gain on investments 249 249

Balance, March 31, 2023

Net unrealized loss on investments ( 145 ) ( 145 )

Balance, June 30, 2023

1,891 $ — $ 247,092 $ 161 $ 247,253

2 unchanged sentences

Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2023 and 2022

For the Six Months Ended June 30, 2023 and 2022

(in thousands)

Three Months Ended

Six Months Ended

Operating Activities

5 unchanged sentences

Share-based compensation expense related to stock appreciation rights 220 180

Net loss (gain) on disposals of property 50 ( 28 )

Net realized investment gains ( 7,280 ) ( 1,747 )

Net loss on other investments 47 —

Net change in estimated fair value of equity security investments 6,790 5,915

Net gain on disposals of property ( 53 ) ( 36 )

Net investment (gains) losses ( 1,535 ) 14,302

Net earnings from other investments ( 2,087 ) ( 1,918 )

4 unchanged sentences

Increase in other assets ( 511 ) ( 1,171 )

Decrease (increase) in lease assets 36 ( 2,119 )

Decrease in current income taxes receivable 1,174 —

Increase in lease assets ( 123 ) ( 1,359 )

Decrease (increase) in current income taxes receivable 1,174 ( 390 )

Decrease in accounts payable and accrued liabilities ( 12,993 ) ( 3,613 )

(Decrease) increase in lease liabilities ( 13 ) 2,124

Increase in current income taxes payable 1,148 2,835

Increase in lease liabilities 210 1,375

Increase (decrease) in current income taxes payable 586 ( 3,329 )

Payments of claims, net of recoveries ( 2,386 ) ( 1,637 )

5 unchanged sentences

Purchases of other investments ( 1,095 ) ( 939 )

Purchases of subsidiary, net of cash — ( 4,927 )

Proceeds from sales and maturities of fixed maturity securities 6,212 14,496

6 unchanged sentences

Financing Activities

Repurchases of common stock ( 959 ) —

Exercise of stock appreciation rights — ( 1 )

1 unchanged sentence

Net cash used in financing activities ( 2,705 ) ( 1,746 )

Net (Decrease) Increase in Cash and Cash Equivalents ( 5,756 ) 142

Net Decrease in Cash and Cash Equivalents ( 9,127 ) ( 1,682 )

Cash and Cash Equivalents, Beginning of Period 35,311 37,168

1 unchanged sentence

Consolidated Statements of Cash Flows, continued

Three Months Ended

Six Months Ended

Supplemental Disclosures:

Cash Paid During the Year for:

Income tax refunds, net $ ( 32 ) $ ( 79 )

Income tax payments, net $ 3,729 $ 9,709

Non-Cash Investing and Financing Activities:

Non-cash net unrealized (gain) loss on investments, net of deferred tax (provision) benefit of $( 66 ) and $ 583 for March 31, 2023 and 2022, respectively

Non-cash net unrealized loss on investments, net of deferred tax benefit of $ 40 and $ 835 for June 30, 2023 and 2022, respectively

$ 145 $ 2,973

Adjustments to postretirement benefits obligation, net of deferred tax expense of $( 30 ) and $( 46 ) for March 31, 2023 and 2022, respectively

Adjustments to postretirement benefits obligation, net of deferred tax expense of $( 28 ) and $( 44 ) for June 30, 2023 and 2022, respectively

$ ( 106 ) $ ( 167 )

Changes in Financial Statement Amounts Related to Purchase of Subsidiaries, Net of Cash Received:

Goodwill and other intangibles acquired $ — $ ( 3,028 )

Title plant acquired — ( 500 )

Prepaid and other assets acquired — ( 77 )

Fixed assets acquired — ( 1,322 )

Purchase of subsidiary, net of cash received $ — $ ( 4,927 )

Refer to notes to the Consolidated Financial Statements.

2 unchanged sentences

Notes to Consolidated Financial Statements

March 31, 2023

June 30, 2023

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-month period ended March 31, 2023 are not necessarily indicative of the financial condition and results that may be expected for the year ending December 31, 2023 or any other interim period.

Operating results for the three- and six-month periods ended June 30, 2023 are not necessarily indicative of the financial condition and results that may be expected for the year ending December 31, 2023 or any other interim period.

Reclassifications – Certain amounts have been reclassified for consistency with the current period presentation.

The reclassifications were between revenue lines of the unaudited Consolidated Statements of Operations.

These reclassifications are not considered an accounting change and had no effect on the reported results of operations.

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 three-month period ended March 31, 2023 and the year ended December 31, 2022 is summarized as follows:

(in thousands) March 31, 2023 December 31, 2022

Activity in the reserve for claims for the six-month period ended June 30, 2023 and the year ended December 31, 2022 are summarized as follows:

(in thousands) June 30, 2023 December 31, 2022

Balance, beginning of period $ 37,192 $ 36,754

3 unchanged sentences

$ 36,865 $ 37,192

The total reserve for all reported and unreported losses the Company incurred through March 31, 2023 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 June 30, 2023 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 March 31, 2023.

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) March 31, 2023 % December 31, 2022 %

(in thousands, except percentages) June 30, 2023 % December 31, 2022 %

Known title claims $ 3,034 8.2 $ 3,250 8.7

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-month periods ended March 31:

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

Three Months Ended

June 30, Six Months Ended

(in thousands, except per share amounts)

2023 2022 2023 2022

Net income $ 7,585 $ 2,279 $ 8,766 $ 8,464

2 unchanged sentences

Weighted average common shares outstanding – Diluted

1,896 1,899 1,896 1,900

Basic earnings per common share $ 4.00 $ 1.20 $ 4.62 $ 4.46

Diluted earnings per common share $ 4.00 $ 1.20 $ 4.62 $ 4.45

There were 24 thousand and 0 potential shares excluded from the computation of diluted earnings per share for the three-month periods ended March 31, 2023 and 2022, respectively, due to the out-of-the-money status of the related share-based awards.

There were 17 thousand and 13 thousand potential shares excluded from the computation of diluted earnings per share for the three-month periods ended June 30, 2023 and 2022, respectively, due to the out-of-the-money status of the related share-based awards.

There were 24 thousand and 13 thousand potential shares excluded from the computation of diluted earnings per share for the six-month periods ended June 30, 2023 and 2022, 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.

There is currently one active plan from which the Company may grant share-based awards and one legacy plan under which equity awards remain outstanding.

There is currently one active plan from which the Company may grant share-based awards.

The awards eligible to be granted under the active plan are limited to SARs, and the maximum aggregate number of shares of common stock of the Company available pursuant to the plan for the grant of SARs is 250 thousand shares.

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 March 31, 2023, the only outstanding awards under the plans were SARs, which expire within seven years or less from the date of grant.

As of June 30, 2023, 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.

12 unchanged sentences

SARs exercised ( 2 ) 93.87

Outstanding as of March 31, 2023 38 $ 163.31 4.12 $ 171

Exercisable as of March 31, 2023 29 $ 169.40 3.69 $ 104

Unvested as of March 31, 2023 9 $ 143.36 5.51 $ 67

Outstanding as of June 30, 2023 42 $ 160.83 4.19 $ 127

Exercisable as of June 30, 2023 30 $ 168.30 3.57 $ 84

Unvested as of June 30, 2023 12 $ 142.46 5.71 $ 43

During the second quarter of 2023, the Company issued 4 thousand share-settled SARs to directors of the Company.

During the second quarter of 2022, the Company issued 5 thousand share-settled SARs to directors of the Company.

During the first quarter of 2023, the Company issued 1 thousand share-settled SARs to a non-executive employee of the Company.

There were no such first quarter issuances in 2022.

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.

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.

3 unchanged sentences

Treasury yield curve in effect at the time of the grant.

The weighted average fair value for the SARs issued during 2023 was $ 61.56 , estimated using the weighted average assumptions shown in the table below:

The weighted average fair value for the SARs issued during 2023 and 2022 were $ 55.52 and $ 69.64 , respectively, and were estimated using the weighted average assumptions shown in the table below:

Expected Life in Years 6.2 - 7.0 7.0

2 unchanged sentences

Yield Rate 1.2 % 0.1 %

There was approximately $ 159 thousand and $ 102 thousand of compensation expense relating to SARs vesting on or before March 31, 2023 and 2022, respectively, included in personnel expenses in the unaudited Consolidated Statements of Operations.

As of March 31, 2023, there was $ 427 thousand of unrecognized compensation expense related to unvested share-based compensation arrangements granted under the Company’s stock award plans.

There was approximately $ 220 thousand and $ 180 thousand of compensation expense relating to SARs vesting on or before June 30, 2023 and 2022, respectively, included in personnel expenses in the unaudited Consolidated Statements of Operations.

As of June 30, 2023, there was $ 611 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 March 31, 2023 and 2022:

Provided below is selected financial information about the Company's operations by segment for the periods ended June 30, 2023 and 2022:

Three Months Ended

March 31, 2023 (in thousands) Title

June 30, 2023 (in thousands) Title

Insurance All

1 unchanged sentence

Insurance and other services revenues $ 54,034 $ 5,081 $ ( 5,691 ) $ 53,424

Investment (loss) income ( 4,583 ) 620 — ( 3,963 )

Net realized gain on investments 7,110 123 — 7,233

Net investment income 4,052 838 — 4,890

Total revenues $ 58,086 $ 5,919 $ ( 5,691 ) $ 58,314

Operating expenses 51,161 2,825 ( 5,518 ) 48,468

Income before income taxes $ 6,925 $ 3,094 $ ( 173 ) $ 9,846

Total assets $ 236,185 $ 94,296 $ — $ 330,481

Three Months Ended

June 30, 2022 (in thousands) Title

Insurance All

Other Intersegment Eliminations Total

Insurance and other services revenues $ 83,478 $ 3,242 $ ( 7,701 ) $ 79,019

Net investment loss ( 7,084 ) ( 1,033 ) — ( 8,117 )

Total revenues $ 76,394 $ 2,209 $ ( 7,701 ) $ 70,902

Operating expenses 72,234 3,265 ( 7,550 ) 67,949

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

Total assets $ 249,160 $ 76,032 $ — $ 325,192

Six Months Ended

June 30, 2023 (in thousands) Title

Insurance All

Other Intersegment Eliminations Total

Insurance and other services revenues $ 100,200 $ 10,824 $ ( 9,527 ) $ 101,497

Net investment income 6,579 1,581 — 8,160

Total revenues

$ 106,779 $ 12,405 $ ( 9,527 ) $ 109,657

Operating expenses 101,885 5,548 ( 9,183 ) 98,250

(Loss) income before income taxes $ ( 2,031 ) $ 3,763 $ ( 171 ) $ 1,561

Income before income taxes $ 4,894 $ 6,857 $ ( 344 ) $ 11,407

$ 236,185 $ 94,296 $ — $ 330,481

Three Months Ended

March 31, 2022 (in thousands) Title

Six Months Ended

June 30, 2022 (in thousands) Title

Insurance All

1 unchanged sentence

Insurance and other services revenues $ 156,543 $ 5,979 $ ( 12,589 ) $ 149,933

Investment loss ( 1,628 ) ( 2,035 ) — ( 3,663 )

Net realized gain on investments 51 1,696 — 1,747

Net investment loss ( 8,661 ) ( 1,372 ) — ( 10,033 )

Total revenues

4 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 $ 15.0 million as of March 31, 2023 and December 31, 2022.

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 $ 15.1 million and $ 15.0 million as of June 30, 2023 and December 31, 2022, 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 March 31, 2023 and 2022:

The following sets forth the net periodic benefit cost for the executive benefits for the periods ended June 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

6 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 March 31, 2023 (in thousands) Amortized

As of June 30, 2023 (in thousands) Amortized

Losses Estimated Fair

22 unchanged sentences

The special revenue category for both periods presented includes approximately 30 individual fixed maturity securities with revenue sources from a variety of industry sectors.

The scheduled maturities of fixed maturity securities at March 31, 2023 are as follows:

The scheduled maturities of fixed maturity securities at June 30, 2023 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 March 31, 2023 and December 31, 2022:

Less than 12 Months 12 Months or Longer Total

As of March 31, 2023 (in thousands) Estimated

As of June 30, 2023 (in thousands) Estimated

Value Unrealized

28 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.

The decline in the 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.

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.

Factors considered in determining whether a loss is credit-related include the financial condition and prospects of the issuer (including credit ratings and analyst reports) and macro-economic changes.

A total of 45 and 51 fixed maturity securities had unrealized losses at March 31, 2023 and December 31, 2022, respectively.

A total of 83 and 51 fixed maturity securities had unrealized losses at June 30, 2023 and December 31, 2022, 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.

2 unchanged sentences

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 $ 82 thousand in impairment charges related to fixed maturity securities for the three-month period ended March 31, 2023, and had no recorded impairment charges for the three-month period ended March 31, 2022.

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

The Company recorded $ 112 thousand in impairment charges related to fixed maturity securities for the six-month period ended June 30, 2023 and had $ 127 thousand recorded in impairment charges for the six-month period ended June 30, 2022.

Expenses related to impairments are recorded in net investment gains (losses) in the unaudited Consolidated Statements of Operations when recognized.

Investments in Equity Securities

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

As of March 31, 2023 (in thousands)

As of June 30, 2023 (in thousands)

Cost Estimated Fair

7 unchanged sentences

$ 25,278 $ 51,691

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

Net Realized Investment Gains

Gross realized gains and losses on sales of investments for the three-month periods ended March 31, 2023 and 2022 are summarized as follows:

Unrealized holding gains and losses are recorded net in net investment gains (losses) in the unaudited Consolidated Statements of Operations.

Net Investment Gains (Losses)

Gross realized gains and losses on sales of investments and unrealized holding gains and losses for the three and six-months ended June 30, 2023 and 2022 are summarized as follows:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

4 unchanged sentences

Gross realized losses from securities:

Corporate debt securities

$ — $ ( 46 ) $ — $ ( 46 )

Common stocks

3 unchanged sentences

Net realized gains from securities $ 5,985 $ 2,447 $ 13,265 $ 4,194

Gross realized losses on other investments:

Gross realized gains (losses) on other investments:

Losses on other investments $ ( 69 ) $ ( 409 ) $ ( 116 ) $ ( 409 )

$ ( 69 ) $ ( 409 ) $ ( 116 ) $ ( 409 )

Net realized investment gains $ 5,916 $ 2,038 $ 13,149 $ 3,785

Changes in the estimated fair value of equity security investments $ ( 4,824 ) $ ( 12,172 ) $ ( 11,614 ) $ ( 18,087 )

Net investment gains (losses) $ 1,092 $ ( 10,134 ) $ 1,535 $ ( 14,302 )

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 and no participation rights exist.

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 March 31, 2023:

(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 March 31, 2023 and December 31, 2022, the Company did not adjust any Level 2 fair values.

As of June 30, 2023 and December 31, 2022, 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.

16 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 March 31, 2023 and December 31, 2022:

As of March 31, 2023 (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 June 30, 2023 and December 31, 2022:

As of June 30, 2023 (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 March 31, 2023 and December 31, 2022:

As of March 31, 2023 (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 June 30, 2023 and December 31, 2022:

As of June 30, 2023 (in thousands) Level 1 Level 2 Level 3 Total

Financial assets:

21 unchanged sentences

$ 191,523 $ — $ — $ 191,523

The Company did not hold any Level 3 category debt or marketable equity investment securities as of March 31, 2023 or December 31, 2022.

The Company did not hold any Level 3 category debt or marketable equity investment securities as of June 30, 2023 or December 31, 2022.

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

13 unchanged sentences

If any such investment is determined to be 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 three-month period ended March 31, 2023 or the twelve-month period ended December 31, 2022.

The following table presents assets measured at fair value on a non-recurring basis at the time of impairment as of March 31, 2023 and December 31, 2022:

As of March 31, 2023 (in thousands) Level 1 Level 2 Level 3 Total

There were no impairments of such investments made during the six-month period ended June 30, 2023 or the twelve-month period ended December 31, 2022.

The following table presents assets measured at fair value on a non-recurring basis at the time of impairment as of June 30, 2023 and December 31, 2022:

As of June 30, 2023 (in thousands)

Level 1 Level 2 Level 3 Total

Financial assets:

2 unchanged sentences

$ — $ — $ 11,776 $ 11,776

As of December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total

As of December 31, 2022 (in thousands)

Level 1 Level 2 Level 3 Total

Financial assets:

7 unchanged sentences

It is the opinion of management based on its present expectations that these audits and inquiries will not have a material impact on the Company’s consolidated financial condition or operations.

Escrow and Trust Deposits – As a service to its customers, the Company, through ITIC, administers escrow and trust deposits representing earnest money received under real estate contracts, escrowed funds received under escrow agreements, undisbursed amounts received for settlement of mortgage loans and indemnities against specific title risks.

Escrow and Trust Deposits – As a service to its customers, the Company, through ITIC, administers escrow and trust deposits representing earnest money received under real estate contracts, escrow funds received under escrow agreements, undisbursed amounts received for settlement of mortgage loans and indemnities against specific title risks.

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

however, the Company remains contingently liable for the disposition of these deposits.

Like-Kind Exchange 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.

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 in reverse exchange transactions.

Like-kind exchange deposits and reverse exchange property totaled approximately $ 343.0 million and $ 432.0 million as of March 31, 2023 and December 31, 2022, respectively.

Like-kind exchange deposits and reverse exchange property totaled approximately $ 232.2 million and $ 432.0 million as of June 30, 2023 and December 31, 2022, respectively.

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

10 unchanged sentences

(in thousands) As of

March 31, 2023 As of

June 30, 2023 As of

December 31, 2022

4 unchanged sentences

(in thousands) Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net premiums written $ 6,274 $ 7,402 $ 10,407 $ 13,986

4 unchanged sentences

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.

Management determined that no events or changes in circumstances occurred during the three-month periods ended March 31, 2023 and 2022 that would indicate the carrying amounts may not be recoverable, and therefore, determined that no identifiable intangible assets were impaired.

Management determined that no events or changes in circumstances occurred during the six-month periods ended June 30, 2023 and 2022 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

March 31, 2023 As of

June 30, 2023 As of

December 31, 2022

6 unchanged sentences

$ 7,302 $ 7,986

The following table provides the estimated aggregate amortization expense, as of March 31, 2023, for each of the five succeeding fiscal years:

The following table provides the estimated aggregate amortization expense, as of June 30, 2023, for each of the five succeeding fiscal years:

Year Ended (in thousands)

1 unchanged sentence

Goodwill and Title Plants

As of March 31, 2023, the Company recognized $ 9.6 million in goodwill and $ 1.5 million in title plants, net of impairments, as the result of title insurance agency acquisitions.

As of June 30, 2023, the Company recognized $ 9.6 million in goodwill and $ 1.5 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 FASB's Accounting Standards Codification ("ASC") 350, the Company determined that no events or changes in circumstances occurred during the three-month periods ended March 31, 2023 and 2022 that would indicate the carrying amounts may not be recoverable, and therefore, determined that there were no goodwill or title plant impairments.

In accordance with FASB's Accounting Standards Codification ("ASC") 350, the Company determined that no events or changes in circumstances occurred during the six-month periods ended June 30, 2023 and 2022 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-month periods ended March 31, 2023 and 2022:

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, 2023 and 2022:

Three Months Ended

March 31, 2023 (in thousands) Unrealized Gains and Losses

June 30, 2023 (in thousands) Unrealized Gains and Losses

On Available-for-Sale

1 unchanged sentence

Benefits Plans

Beginning balance at January 1 $ 164 $ 36 $ 200

Other comprehensive income before calculations 186 111 297

Beginning balance at March 31

$ 413 $ 147 $ 560

Other comprehensive loss before calculations ( 417 ) ( 5 ) ( 422 )

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive income 249 111 360

Net current-period other comprehensive loss ( 394 ) ( 5 ) ( 399 )

Ending balance $ 19 $ 142 $ 161

Three Months Ended

March 31, 2022 (in thousands) Unrealized Gains and Losses

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

On Available-for-Sale

1 unchanged sentence

Benefits Plans Total

Beginning balance at March 31

$ 1,189 $ 29 $ 1,218

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

Amounts reclassified from accumulated other comprehensive income

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

Ending balance

$ 397 $ 23 $ 420

Six Months Ended

June 30, 2023 (in thousands) Unrealized Gains and Losses

On Available-for-Sale

Securities Postretirement

Benefits Plans

Beginning balance at January 1 $ 164 $ 36 $ 200

3 unchanged sentences

Ending balance $ 19 $ 142 $ 161

Six Months Ended

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

On Available-for-Sale

Securities Postretirement

Benefits Plans Total

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

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

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive (loss) income ( 2,973 ) 167 ( 2,806 )

Ending balance

$ 397 $ 23 $ 420

The following table provides significant amounts reclassified out of each component of accumulated other comprehensive income for the three-month periods ended March 31, 2023 and 2022:

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, 2023 and 2022:

Three Months Ended

March 31, 2023 (in thousands)

June 30, 2023 (in thousands)

Details about Accumulated Other Comprehensive Income Components

4 unchanged sentences

Write-down of securities ( 30 )

Total ( 82 ) Net realized investment gains

Total $ ( 30 ) Net investment gains (losses)

Tax 7 Provision for income taxes

2 unchanged sentences

Three Months Ended

March 31, 2022 (in thousands)

June 30, 2022 (in thousands)

Details about Accumulated Other Comprehensive Income Components

2 unchanged sentences

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

Net realized loss on investments $ ( 46 )

Write-down of securities ( 127 )

Total $ ( 173 ) Net investment gains (losses)

Tax 39 Provision for income taxes

Net of Tax $ ( 134 )

Reclassifications for the period $ ( 134 )

Six Months Ended

June 30, 2023 (in thousands)

Details about Accumulated Other Comprehensive Income Components

Amount Reclassified from Accumulated Other Comprehensive Income

Affected Line Item in the Consolidated Statements of Operations

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

Net realized gain on investments $ —

Write-down of securities ( 112 )

Total $ — Net realized investment gains

Total $ ( 112 ) Net investment gains (losses)

Tax 26 Provision for income taxes

1 unchanged sentence

Reclassifications for the period $ ( 86 )

Six Months Ended

June 30, 2022 (in thousands)

Details about Accumulated Other Comprehensive Income Components

Amount Reclassified from Accumulated Other Comprehensive Income

Affected Line Item in the Consolidated Statements of Operations

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

Net realized loss on investments $ ( 46 )

Write-down of securities ( 127 )

Total $ ( 173 ) Net investment gains (losses)

Tax 39 Provision for income taxes

Net of Tax $ ( 134 )

Reclassifications for the period $ ( 134 )

Note 11 – Revenue from Contracts with Customers

13 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

16 unchanged sentences

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

The lease liability recorded in the unaudited 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 lease liability recorded in the unaudited Consolidated Balance Sheets includes lease payments related to options to extend or cancel the lease term if the Company determined at the inception date 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 Company does not carry debt;

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

8 unchanged sentences

(b) Leases with an initial term of twelve months or less are not recorded on the unaudited Consolidated Balance Sheets.

Components of the lease liability presented on the unaudited Consolidated Balance Sheets are as follows:

Components of the operating lease liability presented on the unaudited Consolidated Balance Sheets are as follows:

(in thousands) As of

March 31, 2023 As of

June 30, 2023 As of

December 31, 2022

4 unchanged sentences

Total lease liabilities $ 7,049 $ 6,839

The future minimum lease payments for leases that have initial or remaining noncancelable lease terms in excess of one year as of March 31, 2023, are summarized as follows:

Year Ended (in thousands) Operating Leases Finance Leases Total

The future minimum lease payments for leases that have initial or remaining noncancelable lease terms in excess of one year as of June 30, 2023, are summarized as follows:

Year Ended (in thousands) Operating Leases Finance

2023 $ 1,320 $ 121 $ 1,441

8 unchanged sentences

Supplemental lease information is as follows:

March 31, 2023 As of

June 30, 2023 As of

December 31, 2022

7 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