What changed in this filing

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Item 1. Financial Statements

2024-05-08 compared with 2023-11-08 · 157 added, 294 removed, 575 unchanged (44% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

As of September 30, 2023 and December 31, 2022

As of March 31, 2024 and December 31, 2023

(in thousands)

September 30,

2024 December 31,

1 unchanged sentence

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

September 30, 2023:

March 31, 2024:

December 31, 2023:

1 unchanged sentence

Equity securities, at fair value (cost:

September 30, 2023:

March 31, 2024:

December 31, 2023:

30 unchanged sentences

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

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

1,884 and 1,891 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively, excluding in each period 292 shares of common stock held by the Company)

Retained earnings

253,616 250,915

Accumulated other comprehensive (loss) income ( 755 ) 200

Accumulated other comprehensive income 346 638

Total stockholders' equity

5 unchanged sentences

Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2023 and 2022

For the Three Months Ended March 31, 2024 and 2023

(in thousands, except per share amounts)

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net premiums written $ 40,180 $ 38,966

3 unchanged sentences

Other investment income 111 753

Net investment (losses) gains ( 815 ) ( 2,154 ) 720 ( 16,456 )

Net investment gains 2,422 443

Other 199 140

17 unchanged sentences

Consolidated Statements of Comprehensive Income

For the Three and Nine Months Ended September 30, 2023 and 2022

For the Three Months Ended March 31, 2024 and 2023

(in thousands)

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income $ 4,525 $ 1,181

Other comprehensive loss, before income tax:

Accumulated postretirement (benefit) expense obligation adjustment ( 7 ) 17 127 228

Net unrealized losses on investments arising during the period ( 1,250 ) ( 1,595 ) ( 1,547 ) ( 5,537 )

Reclassification adjustment for sale of securities included in net income — 58 — 104

Other comprehensive (loss) income, before income tax:

Accumulated postretirement benefit obligation adjustment — 141

Net unrealized (losses) gains on investments arising during the period ( 424 ) 233

Reclassification adjustment for write-down of securities included in net income 53 82

Other comprehensive loss, before income tax ( 1,161 ) ( 1,485 ) ( 1,212 ) ( 5,043 )

Income tax (benefit) expense related to postretirement health benefits ( 1 ) 4 27 48

Income tax benefit related to net unrealized losses on investments arising during the period ( 266 ) ( 338 ) ( 332 ) ( 1,173 )

Income tax expense related to reclassification adjustment for sale of securities included in net income — 12 — 22

Other comprehensive (loss) income, before income tax ( 371 ) 456

Income tax expense related to postretirement health benefits — 30

Income tax (benefit) expense related to net unrealized (losses) gains on investments arising during the period ( 91 ) 47

Income tax expense related to reclassification adjustment for write-down of securities included in net income 12 19

Net income tax benefit on other comprehensive loss ( 245 ) ( 314 ) ( 257 ) ( 1,066 )

Other comprehensive loss ( 916 ) ( 1,171 ) ( 955 ) ( 3,977 )

Net income tax (benefit) expense on other comprehensive (loss) income ( 79 ) 96

Other comprehensive (loss) income ( 292 ) 360

Comprehensive Income $ 4,233 $ 1,541

2 unchanged sentences

Consolidated Statements of Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2023 and 2022

For the Three Months Ended March 31, 2024 and 2023

(in thousands, except per share amounts)

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

Stockholders’

Shares Amount

Balance, June 30, 2022

1,897 $ — $ 232,759 $ 420 $ 233,179

Net income 7,913 7,913

Dividends paid ($ 0.46 per share)

( 873 ) ( 873 )

Repurchases of common stock — ( 86 ) ( 86 )

Share-based compensation expense related to stock appreciation rights

Accumulated postretirement benefit obligation adjustment, net of tax 13 13

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

Balance, September 30, 2022

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

Balance, June 30, 2023

1,891 $ — $ 247,092 $ 161 $ 247,253

Net income 7,084 7,084

Dividends paid ($ 0.46 per share)

( 870 ) ( 870 )

Share-based compensation expense related to stock appreciation rights

Accumulated postretirement benefit obligation adjustment, net of tax ( 6 ) ( 6 )

Net unrealized loss on investments ( 910 ) ( 910 )

Balance, September 30, 2023

1,891 $ — $ 253,423 $ ( 755 ) $ 252,668

Consolidated Statements of Stockholders’ Equity, continued

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

Common Stock Retained Earnings Accumulated Other Comprehensive Income Total

Stockholders’

5 unchanged sentences

( 873 ) ( 873 )

Repurchases of common stock — ( 86 ) ( 86 )

Exercise of stock appreciation rights

2 ( 1 ) ( 1 )

Share-based compensation expense related to stock appreciation rights

Accumulated postretirement benefit obligation adjustment, net of tax 180 180

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

Balance, September 30, 2022

Accumulated postretirement benefit obligation adjustment 111 111

Net unrealized gain on investments 249 249

Balance, March 31, 2023

1,898 $ — $ 241,278 $ 560 $ 241,838

4 unchanged sentences

( 867 ) ( 867 )

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

Exercise of stock appreciation rights

Shares of common stock repurchased and retired ( 7 ) ( 1,053 ) ( 1,053 )

Share-based compensation expense related to stock appreciation rights

Accumulated postretirement benefit obligation adjustment, net of tax 100 100

Net unrealized loss on investments ( 292 ) ( 292 )

Balance, September 30, 2023

Balance, March 31, 2024

1,884 $ — $ 253,616 $ 346 $ 253,962

2 unchanged sentences

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2023 and 2022

For the Three Months Ended March 31, 2024 and 2023

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Operating Activities

Net income $ 4,525 $ 1,181

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation 787 639

(Accretion) Amortization of investments, net ( 2,663 ) 270

Accretion of investments, net ( 1,232 ) ( 865 )

Amortization of other intangible assets, net 339 332

Share-based compensation expense related to stock appreciation rights 96 159

Net gain on disposals of property ( 99 ) ( 50 )

Net investment (gains) losses ( 720 ) 16,456

Net earnings from other investments ( 2,445 ) ( 2,976 )

Net (gain) loss on disposals of property ( 13 ) 50

Net investment gains ( 2,422 ) ( 443 )

Net losses (earnings) from other investments 14 ( 568 )

Provision for claims 910 1,068

1 unchanged sentence

Changes in assets and liabilities:

Decrease (increase) in premium and fees receivable 1,725 ( 241 )

Increase in other assets ( 4,029 ) ( 873 )

Decrease (increase) in lease assets 275 ( 1,056 )

Decrease (increase) in current income taxes receivable 1,174 ( 3,164 )

Decrease in premium and fees receivable 427 2,220

Decrease (increase) in other assets 3,354 ( 265 )

(Increase) decrease in lease assets ( 376 ) 36

Decrease in current income taxes receivable 1,081 1,174

Decrease in accounts payable and accrued liabilities ( 5,881 ) ( 15,693 )

(Decrease) increase in lease liabilities ( 200 ) 1,060

Increase (decrease) in current income taxes payable 1,008 ( 3,329 )

Increase (decrease) in lease liabilities 379 ( 13 )

Increase in current income taxes payable 282 1,148

Payments of claims, net of recoveries ( 741 ) ( 1,342 )

Net cash (used in) provided by operating activities ( 6,723 ) 20,303

Net cash provided by (used in) operating activities 1,437 ( 13,092 )

Investing Activities

Purchases of fixed maturities ( 18,445 ) ( 350 )

Purchases of fixed maturity securities ( 757 ) ( 2,705 )

Purchases of equity securities ( 2,470 ) ( 3,627 )

1 unchanged sentence

Purchases of other investments ( 5,178 ) ( 970 )

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

Proceeds from sales and maturities of fixed maturity securities 1,625 4,712

1 unchanged sentence

Proceeds from sales and maturities of short-term investments 31,107 17,654

Proceeds from sales and distributions of other investments and assets 3,327 4,523

Proceeds from sales and distributions of other investments 3,379 913

Purchases of property ( 2,230 ) ( 2,301 )

Proceeds from the sale of property 17 243

Net cash provided by (used in) investing activities 5,398 ( 13,386 )

Net cash (used in) provided by investing activities ( 1,935 ) 8,209

Financing Activities

Repurchases of common stock ( 1,053 ) —

Exercise of stock appreciation rights — ( 1 )

Dividends paid ( 867 ) ( 873 )

Net cash used in financing activities ( 1,920 ) ( 873 )

Net (Decrease) Increase in Cash and Cash Equivalents ( 4,900 ) 4,212

Net Decrease in Cash and Cash Equivalents ( 2,418 ) ( 5,756 )

Cash and Cash Equivalents, Beginning of Period 24,031 35,311

1 unchanged sentence

Consolidated Statements of Cash Flows, continued

Nine Months Ended

September 30,

Three Months Ended

Supplemental Disclosures:

Cash Paid During the Year for:

Income tax payments, net $ 6,968 $ 15,200

Income tax payments (refunds), net $ 1 $ ( 32 )

Non-Cash Investing and Financing Activities:

Non-cash net unrealized loss on investments, net of deferred tax benefit of $ 284 and $ 1,114 for September 30, 2023 and 2022, respectively

Non-cash net unrealized loss (gain) on investments, net of deferred tax benefit (provision) of $ 79 and $( 66 ) for March 31, 2024 and 2023, respectively

$ 292 $ ( 249 )

Adjustments to postretirement benefits obligation, net of deferred tax expense of $( 27 ) and $( 48 ) for September 30, 2023 and 2022, respectively

Adjustments to postretirement benefits obligation, net of deferred tax expense of $ 0 and $( 30 ) for March 31, 2024 and 2023, respectively

$ — $ ( 111 )

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

September 30, 2023

March 31, 2024

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 nine-month periods ended September 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.

Operating results for the three-month period ended March 31, 2024 are not necessarily indicative of the financial condition and results that may be expected for the year ending December 31, 2024 or any other interim period.

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

3 unchanged sentences

Actual results could differ from those estimates and assumptions used.

Subsequent Events – The Company has evaluated and concluded that there were no material subsequent events requiring adjustment or disclosure to its unaudited Consolidated Financial Statements.

Subsequent Events – The Company has evaluated through the date of this filing and concluded that there were no material subsequent events requiring adjustment or disclosure to its unaudited Consolidated Financial Statements.

Note 2 – Reserve for Claims

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

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

Activity in the reserve for claims for the three-month period ended March 31, 2024 and the year ended December 31, 2023 is summarized as follows:

(in thousands) March 31, 2024 December 31, 2023

Balance, beginning of period $ 37,147 $ 37,192

3 unchanged sentences

$ 37,316 $ 37,147

The total reserve for all reported and unreported losses the Company incurred through September 30, 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 March 31, 2024 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 September 30, 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) September 30, 2023 % December 31, 2022 %

(in thousands, except percentages) March 31, 2024 % December 31, 2023 %

Known title claims $ 3,216 8.6 $ 2,855 7.7

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- and nine-month periods ended September 30:

The following table sets forth the computation of basic and diluted earnings per share for the three-month periods ended March 31:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts)

2023 2022 2023 2022

Net income $ 4,525 $ 1,181

2 unchanged sentences

Weighted average common shares outstanding – Diluted

1,891 1,897 1,894 1,898

Basic earnings per common share $ 2.40 $ 0.62

Diluted earnings per common share $ 2.40 $ 0.62

There were 24 thousand and 26 thousand potential shares excluded from the computation of diluted earnings per share for the three-month periods ended September 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 nine-month periods ended September 30, 2023 and 2022, respectively, due to the out-of-the-money status of the related share-based awards.

There were 23 thousand and 24 thousand potential shares excluded from the computation of diluted earnings per share for the three-month periods ended March 31, 2024 and 2023, 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.

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.

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 September 30, 2023, the only outstanding awards under the plans were SARs, which expire within seven years or less from the date of grant.

As of March 31, 2024, 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 — —

Outstanding as of September 30, 2023 42 $ 160.83 3.94 $ 166

Exercisable as of September 30, 2023 32 $ 166.57 3.52 $ 110

Unvested as of September 30, 2023 10 $ 142.51 5.28 $ 56

During the third quarter of 2023, the Company did not issue share-settled SARs to either employees or directors of the Company.

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

During the first two quarters of 2023, the Company issued 5 thousand share-settled SARs to directors of the Company.

During the first two quarters of 2022, 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.

Outstanding as of March 31, 2024 42 $ 160.83 3.44 $ 451

Exercisable as of March 31, 2024 36 $ 163.77 3.22 $ 331

Unvested as of March 31, 2024 6 $ 143.79 4.70 $ 120

During the first quarter of 2024, the Company did not issue share-settled SARs to key employees or directors of the Company.

During the first quarter of 2023, there was an issuance of 1 thousand share-settled SARs to a director of the Company.

The fair value of each SAR 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 and 2022 were $ 55.52 and $ 62.60 , respectively, and were estimated using the weighted average assumptions shown in the table below:

Expected Life in Years 6.2 - 7.0 7.0

Volatility 36.6 % 35.6 %

Interest Rate 3.7 % 3.2 %

Yield Rate 1.2 % 0.6 %

There was approximately $ 337 thousand and $ 259 thousand of compensation expense relating to SARs vesting on or before September 30, 2023 and 2022, respectively, included in personnel expenses in the unaudited Consolidated Statements of Operations.

As of September 30, 2023, there was $ 494 thousand of unrecognized compensation expense related to unvested share-based compensation arrangements granted under the Company’s stock award plans.

There was approximately $ 96 thousand and $ 159 thousand of compensation expense relating to SARs vesting on or before March 31, 2024 and 2023, respectively, included in personnel expenses in the unaudited Consolidated Statements of Operations.

As of March 31, 2024, there was $ 311 thousand of unrecognized compensation expense related to unvested share-based compensation arrangements granted under the Company’s stock award plans.

Note 4 – Segment Information

The Company has one reportable segment, title insurance services.

The Company has two reportable segments, title insurance and exchange services.

The remaining immaterial segments have been combined into a group called “All Other.”

1 unchanged sentence

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 September 30, 2023 and 2022:

The tax-deferred exchange services segment acts as an intermediary in tax-deferred exchanges of property held for productive use in a trade or business or for investments and serves as exchange accommodation titleholder, holding property for exchangers in reverse exchange transactions.

Provided below is selected financial information about the Company's operations by segment for the periods ended March 31, 2024 and 2023:

Three Months Ended

September 30, 2023 (in thousands) Title

Insurance All

March 31, 2024 (in thousands) Title

Insurance Exchange Services All

Other Intersegment Eliminations Total

2 unchanged sentences

Total revenues

$ 51,380 $ 2,848 $ 3,243 $ ( 4,012 ) $ 53,459

Operating expenses 48,560 670 2,272 ( 3,840 ) 47,662

2 unchanged sentences

Three Months Ended

September 30, 2022 (in thousands) Title

Insurance All

Other Intersegment Eliminations Total

Insurance and other services revenues $ 78,812 $ 4,102 $ ( 6,164 ) $ 76,750

Net investment income 600 648 — 1,248

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

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

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

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

Nine Months Ended

September 30, 2023 (in thousands) Title

Insurance All

March 31, 2023 (in thousands) Title

Insurance Exchange Services All

Other Intersegment Eliminations Total

4 unchanged sentences

Operating expenses 50,724 608 2,115 ( 3,665 ) 49,782

Income before income taxes $ 10,304 $ 10,229 $ ( 516 ) $ 20,017

$ 226,105 $ 105,810 $ — $ 331,915

Nine Months Ended

September 30, 2022 (in thousands) Title

Insurance All

Other Intersegment Eliminations Total

Insurance and other services revenues $ 235,355 $ 10,081 $ ( 18,753 ) $ 226,683

Net investment loss ( 8,061 ) ( 724 ) — ( 8,785 )

Total revenues

$ 227,294 $ 9,357 $ ( 18,753 ) $ 217,898

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

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

$ 250,116 $ 82,687 $ — $ 332,803

(Loss) income before income taxes $ ( 2,031 ) $ 3,280 $ 483 $ ( 171 ) $ 1,561

Total assets $ 231,894 $ 5,903 $ 86,000 $ — $ 323,797

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 $ 15.1 million and $ 15.0 million as of September 30, 2023 and December 31, 2022, respectively.

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 $ 15.2 million as of March 31, 2024 and December 31, 2023.

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 September 30, 2023 and 2022:

The following sets forth the net periodic benefit cost for the executive benefits for the periods ended March 31, 2024 and 2023:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

1 unchanged sentence

Interest cost on the projected benefit obligation 11 10

Amortization of unrecognized (gain) loss ( 7 ) 4 ( 21 ) —

Amortization of unrecognized gain — ( 7 )

Net periodic benefit cost $ 11 $ 3

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 September 30, 2023 (in thousands) Amortized

As of March 31, 2024 (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 September 30, 2023 are as follows:

The scheduled maturities of fixed maturity securities at March 31, 2024 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 September 30, 2023 and December 31, 2022:

Less than 12 Months 12 Months or Longer Total

As of September 30, 2023 (in thousands) Estimated

As of March 31, 2024 (in thousands) Estimated

Value Unrealized

3 unchanged sentences

Value Unrealized

Government obligations $ 2 $ ( 6 ) $ — $ — $ 2 $ ( 6 )

General obligations of U.S.

24 unchanged sentences

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 98 and 51 fixed maturity securities had unrealized losses at September 30, 2023 and December 31, 2022, respectively.

A total of 59 and 51 fixed maturity securities had unrealized losses at March 31, 2024 and December 31, 2023, 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 (loss) 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 impairment charges related to fixed maturity securities totaling $ 96 thousand and $ 208 thousand for the three- and nine-month periods ended September 30, 2023, respectively, and $ 35 thousand and $ 162 thousand for the three- and nine-month periods ended September 30, 2022, respectively.

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

The Company recorded $ 53 thousand and $ 82 thousand in impairment charges related to fixed maturity securities for the three-month periods ended March 31, 2024, and 2023, respectively.

Expenses related to impairments are recorded in net investment gains 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 September 30, 2023 (in thousands)

As of March 31, 2024 (in thousands)

Cost Estimated Fair

7 unchanged sentences

$ 22,981 $ 37,212

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

Net Investment (Losses) Gains

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

Unrealized holding gains and losses are reported in the unaudited Consolidated Statements of Operations as net investment gains.

Net Investment Gains

Gross investment gains and losses for the three-month periods ended March 31, 2024 and 2023 are summarized as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

4 unchanged sentences

Gross realized losses from securities:

Corporate debt securities

$ — $ ( 58 ) $ — $ ( 104 )

Common stocks

3 unchanged sentences

Net realized gains from securities $ 2,592 $ 7,280

Gross realized gains (losses) on other investments:

Gains on other investments $ 5 $ 30 $ 5 $ 30

Gross realized losses on other investments:

Losses on other investments $ — $ ( 47 )

$ 1 $ 30 $ ( 115 ) $ ( 379 )

Net realized investment gains $ 2,592 $ 7,233

Changes in the estimated fair value of equity security investments $ ( 170 ) $ ( 6,790 )

Net investment (losses) gains $ ( 815 ) $ ( 2,154 ) $ 720 $ ( 16,456 )

Net investment gains $ 2,422 $ 443

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 September 30, 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 September 30, 2023 and December 31, 2022, the Company did not adjust any Level 2 fair values.

As of March 31, 2024 and December 31, 2023, 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 September 30, 2023 and December 31, 2022:

As of September 30, 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 March 31, 2024 and December 31, 2023:

As of March 31, 2024 (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 September 30, 2023 and December 31, 2022:

As of September 30, 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 March 31, 2024 and December 31, 2023:

As of March 31, 2024 (in thousands) Level 1 Level 2 Level 3 Total

Financial assets:

22 unchanged sentences

$ 172,445 $ — $ — $ 172,445

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

The Company did not hold any Level 3 category debt or marketable equity investment securities as of March 31, 2024 or December 31, 2023.

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 notes receivable are measured at estimated fair value on a non-recurring basis and are reviewed for impairment quarterly.

Certain measurement alternative equity investments and notes receivable 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 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 nine-month period ended September 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 as of September 30, 2023 and December 31, 2022:

As of September 30, 2023 (in thousands)

Level 1 Level 2 Level 3 Total

There were no impairments of such investments made during the three-month period ended March 31, 2024 or the twelve-month period ended December 31, 2023.

The following table presents assets measured at fair value on a non-recurring basis as of March 31, 2024 and December 31, 2023:

As of March 31, 2024 (in thousands) Level 1 Level 2 Level 3 Total

Financial assets:

2 unchanged sentences

$ — $ — $ 9,957 $ 9,957

As of December 31, 2022 (in thousands)

Level 1 Level 2 Level 3 Total

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

Financial assets:

3 unchanged sentences

Note 7 – Commitments and Contingencies

Legal Proceedings – The Company and its subsidiaries are involved in legal proceedings that are incidental to their business.

Legal Proceedings:

The Company and its subsidiaries are involved in legal proceedings that are incidental to their business.

In the Company’s opinion, based on the present status of these proceedings, any potential liability of the Company or its subsidiaries with respect to these legal proceedings is not expected to, in the aggregate, be material to the Company’s consolidated financial condition or operations.

Regulation – The Company’s title insurance and trust subsidiaries are regulated by various federal, state and local governmental agencies and are subject to various audits and inquiries.

The Company’s title insurance and trust subsidiaries are regulated by various federal, state and local governmental agencies and are subject to various audits and inquiries.

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, escrow 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, escrowed 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 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 $ 263.6 million and $ 432.0 million as of September 30, 2023 and December 31, 2022, respectively.

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.

Another wholly owned subsidiary of the Company, 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 $ 220.6 million and $ 263.7 million as of March 31, 2024 and December 31, 2023, respectively.

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

1 unchanged sentence

Exchange services revenue includes earnings on these deposits;

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

therefore, investment income is shown as non-title services rather than investment income.

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

6 unchanged sentences

(in thousands) As of

September 30, 2023 As of

March 31, 2024 As of

December 31, 2023

4 unchanged sentences

(in thousands) Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net premiums written $ 5,207 $ 4,133

4 unchanged sentences

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

Management determined that no events or changes in circumstances occurred during the three or nine-month periods ended September 30, 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 three-month periods ended March 31, 2024 and 2023 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

September 30, 2023 As of

March 31, 2024 As of

December 31, 2023

6 unchanged sentences

$ 6,286 $ 6,624

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

The following table provides the estimated aggregate amortization expense, as of March 31, 2024, for each of the five succeeding fiscal years:

Year Ended (in thousands)

1 unchanged sentence

Goodwill and Title Plants

As of September 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.

As of March 31, 2024, the Company recognized $ 9.6 million in goodwill and $ 1.6 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 nine-month periods ended September 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 (Loss) Income

The following table provides changes in the balances of each component of accumulated other comprehensive (loss) income, net of tax, for the three- and nine-month periods ended September 30, 2023 and 2022:

Three Months Ended

September 30, 2023 (in thousands) Unrealized Gains and

On Available-for-Sale

Securities Postretirement

Benefits Plans

Beginning balance at June 30, 2023

$ 19 $ 142 $ 161

Other comprehensive loss before calculations ( 984 ) ( 6 ) ( 990 )

Amounts reclassified from accumulated other comprehensive (loss) income

Net current-period other comprehensive loss ( 910 ) ( 6 ) ( 916 )

Ending balance $ ( 891 ) $ 136 $ ( 755 )

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, 2024 and 2023 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, 2024 and 2023:

Three Months Ended

September 30, 2022 (in thousands) Unrealized Gains and

On Available-for-Sale

Securities Postretirement

Benefits Plans Total

Beginning balance at June 30, 2022

$ 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 )

Nine Months Ended

September 30, 2023 (in thousands) Unrealized Gains and

March 31, 2024 (in thousands) Unrealized Gains

On Available-for-Sale

2 unchanged sentences

Beginning balance at January 1 $ 583 $ 55 $ 638

$ 164 $ 36 $ 200

Other comprehensive (loss) income before calculations ( 333 ) — ( 333 )

Amounts reclassified from accumulated other comprehensive (loss) income

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive (loss) income ( 292 ) — ( 292 )

Ending balance $ 291 $ 55 $ 346

Nine Months Ended

September 30, 2022 (in thousands) Unrealized Gains and

Three Months Ended

March 31, 2023 (in thousands) Unrealized Gains

On Available-for-Sale

2 unchanged sentences

Beginning balance at January 1 $ 164 $ 36 $ 200

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

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 )

Other comprehensive income before calculations 186 111 297

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive income 249 111 360

Ending balance

$ 413 $ 147 $ 560

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, 2023 and 2022:

The following table provides significant amounts reclassified out of each component of accumulated other comprehensive income for the three-month periods ended March 31, 2024 and 2023:

Three Months Ended

September 30, 2023 (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

March 31, 2024 (in thousands)

Details about Accumulated Other Comprehensive Income Components

Amount Reclassified

from Accumulated

Other Comprehensive

Affected Line Item

in the Consolidated

Statements of

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

1 unchanged sentence

Write-down of securities ( 53 )

Total $ ( 96 ) Net investment (losses) gains

Total $ ( 53 ) Net investment gains

Tax 12 Provision for income taxes

2 unchanged sentences

Three 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 $ ( 58 )

Write-down of securities ( 35 )

Total $ ( 93 ) Net investment (losses) gains

Tax 20 Provision for income taxes

Net of Tax $ ( 73 )

Reclassifications for the period $ ( 73 )

Nine Months Ended

September 30, 2023 (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

March 31, 2023 (in thousands)

Details about Accumulated Other Comprehensive Income Components

Amount Reclassified

from Accumulated

Other Comprehensive

Affected Line Item

in the Consolidated

Statements of

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

1 unchanged sentence

Write-down of securities ( 82 )

Total $ ( 208 ) Net investment (losses) gains

Tax 48 Provision for income taxes

Net of Tax $ ( 160 )

Reclassifications for the period $ ( 160 )

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 )

Write-down of securities ( 162 )

Total $ ( 266 ) Net investment (losses) gains

Total $ ( 82 ) Net investment gains

Tax 19 Provision for income taxes

16 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

5 unchanged sentences

Net premiums written 40,180 38,966

Investment-related revenue (loss) 2,012 1,248 10,172 ( 8,785 )

Investment-related revenue 5,053 3,270

Other 199 140

2 unchanged sentences

Note 12 – Leases

The Company enters into lease agreements that are primarily used for office space.

The Company enters into lease agreements that are primarily for office space.

These leases are accounted for as operating leases, with lease expense recognized on a straight-line basis over the term of the lease.

3 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 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 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 Company does not carry debt;

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

2 unchanged sentences

Amortization of lease assets 71 54

Interest on lease liabilities 5 — 18 —

Short-term leases (b) 31 64 101 177

Lease expense $ 729 $ 785

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

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

(in thousands) As of

September 30, 2023 As of

March 31, 2024 As of

December 31, 2023

4 unchanged sentences

Total lease liabilities $ 6,828 $ 6,449

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

Year Ended (in thousands) Operating Leases Finance

The future minimum lease payments for leases that have initial or remaining noncancelable lease terms in excess of one year as of March 31, 2024, are summarized as follows:

Year Ended (in thousands) Operating Leases Finance Leases Total

2024 $ 1,904 $ 199 $ 2,103

8 unchanged sentences

Supplemental lease information is as follows:

September 30, 2023 As of

March 31, 2024 As of

December 31, 2023

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