What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-08 compared with 2025-05-12 · 85 added, 76 removed, 287 unchanged (36% of the section changed)

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Through ITIC and NITIC, the Company underwrites land title insurance for owners and mortgagees as a primary insurer.

Total revenues from the title segment accounted for 90.4% of the Company's revenues for the three-month period ended March 31, 2025.

Total revenues from the title segment accounted for 90.5% of the Company's revenues for the six-month period ended June 30, 2025.

Title insurance protects against loss or damage resulting from title defects that affect real property and typically arise prior to the policy date.

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Regulatory reform and initiatives by various governmental agencies, including the Federal Reserve's monetary policy and other regulatory changes, could impact lending standards or the processes and procedures used by the Company.

The current real estate environment, including interest rates and general economic activity, typically influence the demand for real estate.

The current real estate environment, including interest rates and general economic activity, typically influences the demand for real estate.

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

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Real Estate Environment

T he Mortgage Bankers Association's ("MBA") April 11, 2025 Mortgage Finance Forecast (“MBA Forecast”) projects 2025 purchase activity to increase 7.4% to $1,383 billion and mortgage refinance activity to increase 41.1% to $693 billion, resulting in a net increase in total mortgage originations of 16.7% to $2,076 billion, all from 2024 levels.

The Mortgage Bankers Association's ("MBA") July 17, 2025 Mortgage Finance Forecast (“MBA Forecast”) projects 2025 purchase activity to increase 5.4% to $1,357 billion and mortgage refinance activity to increase 35.2% to $664 billion, resulting in a net increase in total mortgage originations of 13.6% to $2,021 billion, all from 2024 levels.

In 2024, purchase activity accounted for 72.4% of all mortgage originations and is projected in the MBA Forecast to represent 67.1% of all mortgage originations in 2025.

According to data published by Freddie Mac, the average 30-year fixed mortgage interest rates in the United States were 6.8% and 6.7% for the three-month periods ended March 31, 2025 and 2024, respectively.

Per the MBA Forecast, mortgage interest rates are projected to decrease in subsequent periods, declining to 6.4% by 2026.

According to data published by Freddie Mac, the average 30-year fixed mortgage interest rates in the United States were 6.8% and 6.9% for the six-month periods ended June 30, 2025 and 2024, respectively.

Per the MBA Forecast, mortgage interest rates are projected to decrease in subsequent periods, declining to 6.3% in 2027.

Due to the rapidly changing environment brought on by inflationary pressures, inventory constraints, geopolitical and military conflicts, and changes in government regulations and policy, including as a result of the policies implemented by the Trump administration, these projections and the impact of actual future developments on the Company could be subject to material change.

Historically, activity in real estate markets has varied over the course of market cycles by geographic region and in response to evolving economic factors.

Historically, activity in real estat e markets has varied over the course of market cycles by geographic region and in response to evolving economic factors.

Operating results can vary from year to year based on cyclical market conditions and do not necessarily indicate the Company's future operating results and cash flows.

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Actual results could differ from these estimates.

During the three-month period ended March 31, 2025, the Company did not make any material changes to its critical accounting policies as previously disclosed in Management's Discussion and Analysis in the 2024 Form 10-K.

During the six-month period ended June 30, 2025, the Company did not make any material changes to its critical accounting policies as previously disclosed in Management's Discussion and Analysis in the 2024 Form 10-K.

Results of Operations

The following table presents certain unaudited Consolidated Statements of Operations data for the three-month periods ended March 31, 2025 and 2024:

The following table presents certain unaudited Consolidated Statements of Operations data for the three- and six-month periods ended June 30, 2025 and 2024:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2025 2024 2025 2024

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Other investment income 609 890 1,019 1,001

Net investment (losses) gains (1,179) 2,422

Net investment gains 2,104 1,242 925 3,664

Other 2,908 161 3,057 360

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Net Premiums Written

Net premiums written increased 15.3% for the three-month period ended March 31, 2025 to $46.3 million, compared with $40.2 million for the same prior year period.

The increase for the three-month period ended March 31, 2025 was primarily due to higher activity levels across key markets.

Net premiums written increased 6.0% and 10.1% for the three- and six-month periods ended June 30, 2025 to $54.5 million and $100.8 million, respectively, compared with $51.4 million and $91.6 million for the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2025 were primarily due to higher levels of real estate activity.

Total premiums include an estimate of premiums for policies that have been issued directly and by agents, but not reported to the Company as of the balance sheet date.

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Title insurance companies typically issue title insurance policies directly or through title agencies.

Following is a breakdown of premiums generated by direct and agency operations for the three-month periods ended March 31, 2025 and 2024:

Following is a breakdown of premiums generated by direct and agency operations for the three- and six-month periods ended June 30, 2025 and 2024:

Three Months Ended

June 30, Six Months Ended

(in thousands, except percentages) 2025 % 2024 % 2025 % 2024 %

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In the Company's direct operations, the Company issues a title insurance policy and retains the entire premium, as no commissions are recognized in connection with these policies.

Net premiums written from direct operations increased 1.6% for the three-month period ended March 31, 2025, compared with the same prior year period.

Net premiums written from direct operations increased 1.9% and 1.8% for the three- and six-month periods ended June 30, 2025, respectively, compared with the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2025 were primarily the result of higher levels of real estate activity.

Agency Net Premiums – When a policy is written through a non-wholly owned title agency, the premium is shared between the agency and the Company.

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Title insurance commissions earned by the Company’s agents are recognized as expenses concurrently with premium recognition.

Agency net premiums written increased 22.2% for the three-month period ended March 31, 2025, compared with the same prior year period.

The increase for the three-month period ended March 31, 2025 was primarily due to higher activity levels across key markets.

Following is a schedule of net premiums written for the three-month periods ended March 31, 2025 and 2024 in select states in which the Company's two insurance subsidiaries, ITIC and NITIC, currently underwrite title insurance:

Agency net premiums written increased 7.8% and 13.9% for the three- and six-month periods ended June 30, 2025, compared with the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2025 were primarily due to higher levels of real estate activity.

Following is a schedule of net premiums written for the three- and six-month periods ended June 30, 2025 and 2024 in select states in which the Company's two insurance subsidiaries, ITIC and NITIC, currently underwrite title insurance:

Three Months Ended

June 30, Six Months Ended

State (in thousands) 2025 2024 2025 2024

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Georgia 4,149 4,304 9,675 6,763

South Carolina 3,705 3,351

Florida 4,640 3,974 7,377 6,111

South Carolina 3,392 4,592 7,097 7,943

All Others 7,470 6,330 13,408 12,606

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Net Premiums Written $ 54,496 $ 51,416 $ 100,841 $ 91,596

Title insurance rates vary by state and are subject to extensive regulation.

In some states, insurers must adhere to rates set by regulatory authorities and cannot adjust them independently.

The Commissioner of Insurance of Texas has recently mandated a 10% reduction in title insurance rates statewide that takes effect on July 1, 2025.

Escrow and Other Titl e-Related Fees

Escrow and other title-related fees consists primarily of commission income, escrow and other various fees associated with the issuance of title insurance policies including settlement, examination and closing fees.

Escrow and other title-related fee revenues remained relatively consistent with the prior year period at $3.9 million for the three-month period ended March 31, 2025, compared with $3.7 million for the same prior year period.

Escrow and other title-related fees consist primarily of commission income, escrow and other various fees associated with the issuance of title insurance policies including settlement, examination and closing fees.

Escrow and other title-related fee revenues were $5.7 million and $9.6 million for the three- and six-month periods ended June 30, 2025, respectively, compared with $4.8 million and $8.5 million for the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2025 were primarily due to higher levels of real estate activity.

Revenue from Non-Title Services

Revenue from non-title services includes trust services, agency management services and exchange services income.

Non-title service revenues were $4.6 million for the three-month period ended March 31, 2025, compared with $4.3 million for the same prior year period.

The increase for the three-month period ended March 31, 2025 was primarily related to an increase in like-kind exchange revenues.

Non-title service revenues were $5.5 million and $10.1 million for the three- and six-month periods ended June 30, 2025, respectively, compared with $4.3 million and $8.6 million for the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2025 were primarily related to increases in like-kind exchange revenues and management services revenue.

Investment-Related Revenues

Investment-related revenues include interest and dividends, other investment income, and net investment (losses) gains.

Investment-related revenues include interest and dividends, other investment income, and net investment gains.

Interest and Dividends

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The Company’s investments are primarily in fixed maturity securities, short-term investments and equity securities.

The average effective maturity of the majority of the fixed maturity securities at March 31, 2025 is less than 10 years.

The average effective maturity of the majority of the fixed maturity securities at June 30, 2025 is less than 10 years.

The Company’s invested assets are managed to fund its obligations and evaluated to ensure long term stability of capital accounts.

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The Company strives to maintain a high quality investment portfolio.

Interest and dividends were $2.3 million for the three-month period ended March 31, 2025, compared with $2.5 million for the same prior year period.

Interest and dividends were $2.4 million and $4.7 million for the three- and six-month periods ended June 30, 2025, respectively, compared with $2.6 million and $5.1 million for the same prior year periods.

Interest and dividend levels are primarily a function of general market performance, interest rates and the amount of cash available for investments that meet the Company's investment policy.

The decrease for the three-month period ended March 31, 2025 was primarily related to lower levels of interest income, predominantly influenced by interest rates, general market performance, and the amount of investments and cash held.

The decreases for the three- and six-month periods ended June 30, 2025 were primarily impacted by prevailing interest rates and the composition of investment holdings.

Other Investment Income

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

Other investment income was $410 thousand for the three-month period ended March 31, 2025, compared with $111 thousand for the same prior year period.

Other investment income was $609 thousand and $1.0 million for the three- and six-month periods ended June 30, 2025, respectively, compared with $890 thousand and $1.0 million for the same prior year periods.

Changes in other investment income are impacted by fluctuations in the carrying value of the underlying investment and distributions received.

Net Investment (Losses) Gains

Net Investment Gains

Net investment gains and losses include realized gains and losses on the sale of investment securities and changes in the estimated fair value of equity security investments.

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As a result of the interaction of these factors and considerations, the net realized investment gain or loss can vary significantly from period to period.

The net realized investment gains were $2.0 million for the three-month period ended March 31, 2025, compared with $2.6 million for the same prior year period.

The Company recorded impairment charges of $275 thousand on other investments in the three-month period ended March 31, 2025, compared with $53 thousand on fixed maturity securities for the same prior year period.

Management believes unrealized losses on the remaining fixed maturity securities at March 31, 2025 are temporary in nature.

The net realized investment gains were $1.1 million and $3.1 million for the three- and six-month periods ended June 30, 2025, respectively, compared with $1.8 million and $4.4 million for the same prior year periods.

The Company recorded impairment charges of $144 thousand and $419 thousand on other investments in the three- and six-month periods ended June 30, 2025, respectively, compared with $21 thousand and $74 thousand on fixed maturity securities for the same prior year periods.

Management believes unrealized losses on the remaining fixed maturity securities at June 30, 2025 are temporary in nature.

The securities in the Company’s investment portfolio are subject to economic conditions and market risks.

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the risk that the Company’s assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the characteristics of that issuer;

the risk that information obtained by the Company or changes in other facts and circumstances leads management to change its intent to sell the security;

the risk that information obtained by the Company or changes in other facts and circumstances leads management to change its intent to sell the fixed maturity security;

and the risk that management is making decisions based on inaccurate information in the financial statements provided by the issuers.

Changes in the Estimated Fair Value of Equity Security Investments – Changes in the estimated fair value of equity security investments were $(3.2) million for the three-month period ended March 31, 2025, compared with $(169) thousand for the same prior year period.

Such fluctuations are typically the result of changes in general market conditions during the respective periods, however, the sale of appreciated investment securities can result in a reduction in unrealized gains as they are reclassified to net realized investment gains (losses), which is not indicative of a decline in estimated fair value.

Changes in the Estimated Fair Value of Equity Security Investments – Changes in the estimated fair value of equity security investments were $973 thousand and $(2.2) million for the three- and six-month periods ended June 30, 2025, respectively, compared with $(589) thousand and $(759) thousand for the same prior year periods.

Such fluctuations are typically the result of changes in general market conditions during the respective periods, however, the sale of appreciated investment securities can result in a reduction in unrealized gains as they are reclassified to net realized investment gains, which is not indicative of a decline in estimated fair value.

Other Revenues

Other revenues primarily include miscellaneous income and gains and losses on the disposal of fixed assets and real estate.

Other revenues remained relatively consistent with the prior year period at $149 thousand for the three-month period ended March 31, 2025, compared with $199 thousand for the same prior year period.

Other revenues were $2.9 million and $3.1 million for the three- and six-month periods ended June 30, 2025, respectively, compared with $161 thousand and $360 thousand for the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2025 were related to a gain on the disposition of assets transferred to a joint venture.

The Company's operating expenses consist primarily of commissions to agents, personnel expenses, office and technology expenses and the provision for claims.

Operating expenses increased 10.2% for the three-month period ended March 31, 2025, compared with the same prior year period.

The increase for the three-month period ended March 31, 2025 was primarily due to increases in commissions to agents and other expenses, partially offset by decreases in the provision for claims and personnel expenses.

Following is a summary of the Company's operating expenses for the three-month periods ended March 31, 2025 and 2024.

Operating expenses increased 6.9% and 8.4% for the three- and six-month periods ended June 30, 2025, compared with the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2025 were primarily due to increases in commissions to agents, the provision for claims, and other expenses, partially offset by decreases in personnel expenses.

Following is a summary of the Company's operating expenses for the three- and six-month periods ended June 30, 2025 and 2024.

Inter-segment eliminations have been netted;

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Three Months Ended

June 30, Six Months Ended

(in thousands, except percentages) 2025 % 2024 % 2025 % 2024 %

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Total $ 57,851 100.0 $ 54,115 100.0 $ 110,363 100.0 $ 101,777 100.0

On a combined basis, the after-tax profit margin was 5.6% for the three-month period ended March 31, 2025, compared with 8.5% for the same prior year period.

The decrease for the three-month period ended March 31, 2025 was primarily due to an unfavorable change in net investment (losses) gains and increased commission expense, partially offset by an increase in net premiums written.

On a combined basis, the after-tax profit margins were 16.7% and 11.9% for the three- and six-month periods ended June 30, 2025, respectively, compared with 13.6% and 11.3% for the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2025 were primarily due to growth in net premiums written, non-title service revenues, and other revenues, partially offset by increases in commissions to agents, the provision for claims, and other expenses.

The Company continually strives to enhance its competitive strengths and market position, including ongoing initiatives to manage its operating expenses.

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Personnel Expenses – Personnel expenses include base salaries, benefits and payroll taxes, bonuses paid to employees and contract labor expenses.

Personnel expenses were $18.3 million for the three-month period ended March 31, 2025, compared with $18.6 million for the same prior year period.

On a consolidated basis, personnel expenses as a percentage of total revenues were 32.4% for the three-month period ended March 31, 2025, compared with 34.8% for the same prior year period.

The decrease in personnel expenses for the three-month period ended March 31, 2025 was primarily due a reduction in health insurance costs and contractor expenditures.

Personnel expenses were $17.5 million and $35.8 million for the three- and six-month periods ended June 30, 2025, respectively, compared with $18.2 million and $36.7 million for the same prior year periods.

On a consolidated basis, personnel expenses as a percentage of total revenues were 23.7% and 27.5% for the three- and six-month periods ended June 30, 2025, respectively, compared with 27.8% and 30.9% for the same prior year periods.

The decreases in personnel expenses for the three- and six-month periods ended June 30, 2025 were primarily due to lower staffing levels, reduced health insurance costs, and decreased contractors expenditures.

Office and Technology Expenses – Office and technology expenses primarily include facilities expenses, software and hardware expenses, depreciation expense, telecommunications expenses, and business insurance.

Office and technology expenses remained consistent with the prior year period at $4.5 million for the three-month periods ended March 31, 2025 and 2024.

Office and technology expenses remained relatively consistent with the prior year periods at $4.3 million and $8.9 million for the three- and six-month periods ended June 30, 2025, respectively, compared with $4.3 million and $8.8 million for the same prior year periods.

Other Expenses – Other expenses primarily include business development expenses, premium-related taxes and licensing, professional services, title and service fees, amortization of intangible assets and other general expenses.

Other expenses increased to $4.5 million for the three-month period ended March 31, 2025, compared with $3.8 million for the same prior year period.

The increase in other expenses for the three-month period ended March 31, 2025 was primarily due to increases in professional services, miscellaneous expenditures, and premium-related taxes and licensing.

Other expenses were $4.9 million and $9.4 million for the three- and six-month periods ended June 30, 2025, respectively, compared with $4.2 million and $8.0 million for the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2025 were primarily due to increases in professional services, miscellaneous expenditures, and expenses associated with higher title insurance revenues.

Title Insurance

Commissions to Agents – Agent commissions represent the portion of premiums retained by agents pursuant to the terms of their respective agency contracts.

Commissions to agents increased 25.1% for the three-month period ended March 31, 2025, compared with the same prior year period.

Commission expense as a percentage of net premiums written by agents was 75.8% for the three-month period ended March 31, 2025, compared with 74.0% for the same prior year period.

The increase in commission expense was commensurate with the increase in agent premium volume.

The increase in commission expense as a percentage of net premiums written by agents was due to shifts in the geographical distribution of agent premium volume, as commission rates vary by market due to local practice, competition and state regulations.

Provision for Claims – The provision for claims decreased 64.5% for the three-month period ended March 31, 2025, compared with the same prior year period.

The provision for claims as a percentage of net premiums written was 0.7% for the three-month period ended March 31, 2025, compared with 2.3% for the same prior year period.

The decrease in the provision for claims as a percentage of net premiums written for the three-month period ended March 31, 2025 was primarily due to recognition of favorable development on known claims.

Commissions to agents increased 9.5% and 16.2% for the three- and six-month periods ended June 30, 2025, respectively, compared with the same prior year periods.

Commission expense as a percentage of net premiums written by agents was 75.2% and 75.4% for the three- and six-month periods ended June 30, 2025, respectively, compared with 74.0% for both corresponding periods in the prior year.

The changes in commission expense, and commission expense as a percentage of net premiums written, were commensurate with the increases in agent premium volume.

Commission rates vary by market due to local practice, competition and state regulations.

Provision for Claims – The provision for claims increased 129.8% and 32.4% for the three- and six-month periods ended June 30, 2025, respectively, compared with the same prior year periods.

The provision for claims as a percentage of net premiums written was 3.8% and 2.4% for the three- and six-month periods ended June 30, 2025, respectively, compared with 1.8% and 2.0% for the same prior year periods.

The increases in the provision for claims as a percentage of net premiums written for the three- and six-month periods ended June 30, 2025 were primarily due to higher reserves on reported claims and a reduction in favorable loss development during the current year periods.

Title claims are typically reported and paid within the first several years of policy issuance.

The provision for claims reflects actual payments of claims, net of recovery amounts, plus adjustments to the specific and incurred but not reported claims reserves, the latter of which are actuarially determined based on historical claims experience.

Actual payments of claims, net of recoveries, were $386 thousand for the three-month period ended March 31, 2025, compared with $741 thousand for the same prior year period.

At March 31, 2025, the total reserve for claims was $37.0 million.

Actual payments of claims, net of recoveries, were $1.4 million and $1.8 million for the six-month periods ended June 30, 2025 and 2024, respectively.

At June 30, 2025, the total reserve for claims was $38.1 million.

Of that total, approximately $3.2 million was reserved for specific claims, and approximately $34.8 million was reserved for claims for which the Company had no notice.

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Adjustments may be required as new information develops, which often varies from past experience.

The provision for income taxes was $882 thousand for the three-month period ended March 31, 2025, compared with $1.3 million for the same prior year period.

Income tax expense, including federal and state taxes, as a percentage of income before income taxes was 21.8% for the three-month period ended March 31, 2025, compared with 21.9% for the same prior year period.

The provision for income taxes was $3.5 million and $4.4 million for the three- and six-month periods ended June 30, 2025, respectively, compared with $2.4 million and $3.7 million for the same prior year periods.

Income tax expense, including federal and state taxes, as a percentage of income before income taxes was 22.3% and 22.2% for the three- and six-month periods ended June 30, 2025, respectively, compared with 21.3% and 21.5% for the same prior year periods.

The effective income tax rates for both 2025 and 2024 differ from the U.S.

federal statutory income tax rate of 21% primarily due to the effect of tax-exempt income and state taxes.

The Company believes it is more likely than not that the tax benefits associated with recognized impairments and unrecognized losses recorded through March 31, 2025 will be realized.

Tax-exempt income lowers the effective tax rate.

The Company believes it is more likely than not that the tax benefits associated with recognized impairments and unrecognized losses recorded through June 30, 2025 will be realized.

However, this judgment could be impacted by further market fluctuations.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We are currently assessing its impact on our consolidated financial statements.

Liquidity and Capital Resources

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The Company believes its balances of cash, short-term investments and other readily marketable securities, along with cash flows generated by ongoing operations, will be sufficient to satisfy its cash requirements over the next 12 months and thereafter, including the funding of operating activities and commitments for investing and financing activities.

There are currently no known trends that the Company believes will materially impact the Company’s capital resources, nor is the Company anticipating any material changes in the mix or relative cost of such resources except as otherwise disclosed in the Business Trends and Recent Conditions section of this Management's Discussion and Analysis.

The Company is currently evaluating the potential impact of the OBBBA, which includes certain corporate tax provisions that are expected to affect cash flows in future reporting periods by accelerating certain tax deductions.

At this time, the Company is not aware of any other known trends likely to materially affect its capital resources, nor does it anticipate any additional material changes in the composition or relative cost of those resources, except as otherwise disclosed in the Business Trends and Recent Conditions section of this Management’s Discussion and Analysis.

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

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The Company believes that its significant working capital position and management of operating expenses will aid its ability to manage cash resources through fluctuations in the real estate market.

Cash Flows – Net cash (used in) provided by operating activities was $(75) thousand and $1.4 million for the three-month periods ended March 31, 2025 and 2024, respectively.

Net cash (used in) provided by operating activities differ from net income due to adjustments for non-cash items, such as gains and losses on investments and property, the timing of disbursements for taxes, claims and other accrued liabilities, and collections or changes in receivables and other assets.

Cash Flows – Net cash flows provided by operating activities were $8.8 million and $9.9 million for the six-month periods ended June 30, 2025 and 2024, respectively.

Cash flows provided by operating activities differ from net income due to adjustments for non-cash items, such as gains and losses on investments and property, the timing of disbursements for taxes, claims and other accrued liabilities, and collections or changes in receivables and other assets.

Cash flows from non-operating activities have historically consisted of purchases and proceeds from investing activities, the issuance of dividends and repurchases of common stock.

Net cash was provided by investing activities for the three-month period ended March 31, 2025, compared with net cash being used in investing activities in the prior year period.

Net cash was used in financing activities for the three-month periods ended March 31, 2025 and 2024.

Net cash was used in investing activities and financing activities for the six-month periods ended June 30, 2025 and 2024.

The Company maintains a high degree of liquidity within its investment portfolio in the form of cash, short-term investments and other readily marketable securities.

As of March 31, 2025, the Company held cash and cash equivalents of $27.6 million, short-term investments of $54.1 million, available-for-sale fixed maturity securities of $118.3 million and equity securities of $34.6 million.

As of June 30, 2025, the Company held cash and cash equivalents of $29.7 million, short-term investments of $60.4 million, available-for-sale fixed maturity securities of $118.5 million and equity securities of $34.8 million.

The net effect of all activities on total cash and cash equivalents was an increase of $5.0 million in 2025.

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Depending on regulatory conditions, the Company may in the future need to retain cash in its title insurance subsidiaries in order to maintain their statutory capital position.

As of March 31, 2025, both ITIC and NITIC met the minimum capital, surplus and reserve requirements for each state in which they are licensed.

As of June 30, 2025, both ITIC and NITIC met the minimum capital, surplus and reserve requirements for each state in which they are licensed.

While state regulations and the need to cover risks may set a minimum level for capital requirements, other factors necessitate maintaining capital resources in excess of the required minimum amounts.

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

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

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

In addition to operational and investment considerations, taking advantage of opportunistic external growth opportunities may necessitate obtaining additional capital resources.

The Company is carefully monitoring inflation and the macroeconomic environment, changes in market conditions and the regulatory environment, and other trends that could potentially result in material adverse liquidity changes, and will continually assess its capital allocation strategy, including decisions relating to payment of dividends, repurchasing the Company’s common stock and/or conserving cash.

The Company is carefully monitoring inflation, geopolitical and military conflicts, and other trends that could potentially result in material adverse liquidity changes, and will continually assess its capital allocation strategy, including decisions relating to payment of dividends, repurchasing the Company’s common stock and/or conserving cash.

Purchase of Company Stock – On November 9, 2015, the Board of Directors of the Company approved the purchase of an additional 163,335 shares pursuant to the Company’s repurchase plan, such that there was authority remaining under the plan to purchase up to an aggregate of 500,000 shares of the Company’s common stock pursuant to the plan immediately after this approval .

Unless terminated earlier by resolution of the Board of Directors, the plan will expire when all shares authorized for purchase under the plan have been purchased.

Pursuant to the Company’s ongoing purchase program, the Company purchased no shares in the three-month period ended March 31, 2025 and 6,763 shares in the corresponding period in 2024.

Pursuant to the Company’s ongoing purchase program, the Company purchased no shares in the six-month period ended June 30, 2025 and 7,039 shares in the corresponding period in 2024.

The Company anticipates making further purchases under this plan from time to time in the future, depending on such factors as the prevailing market price of the Company’s common stock, the Company’s available cash and then existing alternative uses for such cash.

Capital Expenditures – Capital expenditures were approximately $1.3 million for the three-month period ended March 31, 2025 .

Capital Expenditures – Capital expenditures were approximately $2.9 million for the six-month period ended June 30, 2025 .

In 2025, the Company has plans for various capital improvement projects, including investment in a number of technology and system development initiatives and hardware purchases which are anticipated to be funded via cash flows from operations.

All material anticipated capital expenditures are subject to periodic review and revision and may vary depending on a number of factors.

Contractual Obligations - As of March 31, 2025, the Company had a claims reserve totaling $37.0 million.

Contractual Obligations - As of June 30, 2025, the Company had a claims reserve totaling $38.1 million.

The amounts and timing of these obligations are estimated and not set contractually.

2 unchanged sentences

ITIC, a wholly owned subsidiary of the Company, has entered into employment agreements with certain executive officers.

The amounts accrued for these agreements at March 31, 2025 and December 31, 2024, were $15.5 million and $15.4 million, respectively, which includes postretirement compensation and health benefits, and were calculated based on the terms of the contracts.

The amounts accrued for these agreements at June 30, 2025 and December 31, 2024, were $15.5 million and $15.4 million, respectively, which includes postretirement compensation and health benefits, and were calculated based on the terms of the contracts.

These executive contracts are accounted for on an individual contract basis.

16 unchanged sentences

ITAC serves as exchange accommodation titleholder and, through LLCs that are wholly owned subsidiaries of ITAC, holds property for exchangers in reverse exchange transactions.

Like-kind exchange deposits and reverse exchange property held by the Company for the purpose of completing such transactions totaled approximately $362.1 million and $323.5 million as of March 31, 2025 and December 31, 2024, respectively.

Like-kind exchange deposits and reverse exchange property held by the Company for the purpose of completing such transactions totaled approximately $347.4 million and $323.5 million as of June 30, 2025 and December 31, 2024, respectively.

These exchange deposits are held at third-party financial institutions.

19 unchanged sentences

• changes in interest rates and real estate values;

• changes in general economic, business, and political conditions, including the performance of the financial and real estate markets, and changes in government regulations and policy, including as a result of the policies implemented by the Trump administration such as tariff reform;

• the impact of inflation;

8 unchanged sentences

• significant competition that the Company’s operating subsidiaries face, including the Company’s ability to develop and offer products and services that meet changing industry standards in a timely and cost-effective manner and expansion into new geographic locations;

• the Company’s reliance upon the North Carolina, Texas, Georgia, South Carolina, and Florida markets for a significant portion of its premiums;

• the Company’s reliance upon the North Carolina, Texas, Georgia, Florida, and South Carolina markets for a significant portion of its premiums;

• compliance with government regulation, including pricing regulation, and significant changes to applicable regulations or in their application by regulators;

15 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 2. Management’s Discussion and Analysis