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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2026-03-16 compared with 2025-03-17 · 221 added, 86 removed, 1034 unchanged (23% of the section changed)

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item not required for smaller reporting companies.

The Company’s primary exposure to market risk relates to the impact of adverse changes in the fair value of financial instruments as a result of changes in interest rates and equity market prices of its investment portfolio.

Increases in interest rates diminish the value of fixed income securities and preferred stock, and decreases in stock market values diminish the value of common stocks held.

The fair value of the majority of marketable securities is determined based on quoted market prices.

Although the Company monitors its risks associated with fluctuations in interest rates, it does not currently use derivative financial instruments to hedge these risks.

There were no material changes in the Company’s market risk or market strategy during the year ended December 31, 2025.

Credit Risk :

Credit risk is the risk that the Company will incur economic losses due to an issuer’s inability to repay a contractual obligation.

The Company’s investment portfolio, primarily municipal and corporate fixed maturity securities, and to a lesser extent, equity securities, is subject to credit risk.

The Company mitigates this risk by actively monitoring changes in credit ratings, security pricing and financial reports.

The Company’s average credit quality for fixed maturity securities is A-, determined by using the lower rating reported by the credit reporting agencies.

Interest Rate Risk :

Interest rate risk is the risk that the Company will incur economic losses due to adverse changes in interest rates.

This risk arises from the Company’s investments in interest-sensitive fixed maturity securities.

These securities are primarily fixed-rate municipal and corporate fixed maturity securities.

The Company typically does not purchase such securities for trading purposes.

At December 31, 2025, the Company had approximately $118.1 million in fixed maturity securities.

The Company manages the interest rate risk inherent in its assets by monitoring its liquidity needs and by targeting a specific range for the portfolio’s duration or weighted average maturity.

To determine the potential effect of interest rate risk on interest-sensitive assets, the Company calculates the effect of a 300 basis point shock in prevailing interest rates (“rate shock”) on the fair market value of these securities considering stated interest rates and time to maturity.

Based upon the information and assumptions the Company uses in its calculation, management estimates that a 300 basis point increase in prevailing interest rates would decrease the net fair market value of its fixed-rate debt securities by approximately $7.9 million.

The selection of a 300 basis point increase in prevailing interest rates should not be construed as a prediction by the Company’s management of future market events, but rather, to illustrate the potential impact of such an event.

To the extent that actual results differ from the assumptions utilized, the Company’s rate shock measures could be significantly impacted.

Additionally, the Company’s calculation assumes that the current relationship between short-term and long-term interest rates (the term structure of interest rates) will remain constant over time.

As a result, these calculations may not fully capture the impact of nonparallel changes in the term structure of interest rates and/or large changes in interest rates.

Equity Price Risk :

The Company also holds investments in marketable equity securities, which exposes it to market volatility, as discussed in Note 3 to the accompanying Consolidated Financial Statements.

The sensitivity analysis presented does not consider the effects that such adverse changes may have on overall economic activity, nor does it consider additional actions the Company may take to mitigate its exposure.

Equity price risk is the risk that the Company will incur economic losses due to adverse changes in a particular common stock or stock index.

The Company had approximately $41.5 million in equity securities at December 31, 2025.

Equity price risk is addressed in part by varying the specific allocation of equity investments over time pursuant to management’s assessment of market and business conditions and ongoing liquidity needs analysis.

The Company’s equity exposure is a decline in market prices.

Based upon the information and assumptions the Company used in its calculation, management estimates that an immediate decrease in market prices of 10% would decrease the net fair value of the Company’s assets identified above by approximately $4.2 million at December 31, 2025.

The selection of a 10% immediate decrease should not be construed as a prediction by the Company’s management of future market events, but rather, to illustrate the potential impact of such an event.

The Company’s exposure will change as a result of changes in its mix of common stocks.

Since this calculation is based on historical performance, projecting future price volatility using this method involves an inherent assumption that historical volatility and correlation relationships will remain stable.

Therefore, the results may not reflect the Company’s actual experience if future volatility and correlation relationships differ from such historical relationships.

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors

To the Shareholders, Board of Directors, and Audit Committee

Investors Title Company and Subsidiaries

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Investors Title Company and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the years then ended December 31, 2024, and the related notes and schedules (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years then ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Investors Title Company and Subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and schedules (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America (U.S.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2026, expressed an unqualified opinion thereon.

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These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

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

/s/ Forvis Mazars, LLP

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

/s/ Forvis Mazars, LLP

Charlotte, North Carolina

10 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

To the Shareholders, Board of Directors, and Audit Committee

Investors Title Company and Subsidiaries

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(2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2024 and 2023, and for each the years then ended, and our report dated March 17, 2025, expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2025 and 2024, and for each of the three years in the period ended, and our report dated March 16, 2026, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

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Net income $ 35,180 $ 31,073 $ 21,686

Other comprehensive (loss) income, before income tax:

Other comprehensive income (loss), before income tax:

Accumulated postretirement benefit obligation adjustment 55 — 24

Unrealized (losses) gains on investments arising during the period ( 431 ) 320

Unrealized gains (losses) on investments arising during the period 892 ( 431 ) 320

Reclassification adjustment for sale of securities included in net income ( 12 ) — —

Reclassification adjustment for write-down of securities included in net income — 74 208

Other comprehensive (loss) income, before income tax ( 357 ) 552

Other comprehensive income (loss), before income tax 935 ( 357 ) 552

Income tax expense related to postretirement health benefits 11 — 5

Income tax (benefit) expense related to net unrealized (losses) gains on investments arising during the year ( 92 ) 61

Income tax expense (benefit) related to net unrealized gains (losses) on investments arising during the year 190 ( 92 ) 61

Income tax benefit related to reclassification adjustment for sale of securities included in net income ( 2 ) — —

Income tax expense related to reclassification adjustment for write-down of securities included in net income — 18 48

Net income tax (benefit) expense on other comprehensive (loss) income ( 74 ) 114

Other comprehensive (loss) income ( 283 ) 438

Net income tax expense (benefit) on other comprehensive income (loss) 199 ( 74 ) 114

Other comprehensive income (loss) 736 ( 283 ) 438

Comprehensive Income $ 35,916 $ 30,790 $ 22,124

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1,886 $ — $ 251,418 $ 355 $ 251,773

Net income 35,180 35,180

Dividends paid ($ 10.56 per share)

( 19,932 ) ( 19,932 )

Exercise of stock appreciation rights 2 — —

Share-based compensation expense related to stock appreciation rights 543 543

Accumulated postretirement benefit obligation adjustment 44 44

Net unrealized gain on investments 692 692

Balance, December 31, 2025

1,888 $ — $ 267,209 $ 1,091 $ 268,300

Refer to the Notes to the Consolidated Financial Statements.

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Net earnings from other investments ( 2,269 ) ( 1,811 ) ( 3,206 )

Net gain on sale of other assets ( 2,768 ) — —

Provision for claims 4,607 4,530 4,762

Provision (benefit) for deferred income taxes 624 ( 4,234 )

Provision for deferred income taxes 2,877 624 ( 4,234 )

Changes in assets and liabilities:

(Increase) decrease in premium and fees receivable ( 1,072 ) ( 2,716 ) 5,709

Decrease in other assets 2,635 621

Decrease in lease assets 147 404

Decrease in current income taxes recoverable 1,081 93

Decrease in lease liabilities ( 93 ) ( 390 )

(Increase) decrease in other assets ( 7,697 ) 2,635 621

(Increase) decrease in lease assets ( 1,628 ) 147 404

(Increase) decrease in current income taxes recoverable ( 1,678 ) 1,081 93

Increase (decrease) in lease liabilities 1,694 ( 93 ) ( 10,408 )

Increase (decrease) in accounts payable and accrued liabilities 7,274 2,147 ( 390 )

Increase in current income taxes payable 276 —

(Decrease) increase in current income taxes payable ( 276 ) 276 —

Payments of claims, net of recoveries ( 3,575 ) ( 4,617 ) ( 4,807 )

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Purchases of other investments ( 3,937 ) ( 5,654 ) ( 3,006 )

Purchase of subsidiary ( 4,536 ) — —

Proceeds from sales and maturities of fixed maturity securities 57,000 17,855 10,937

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Proceeds from disposals of property 515 275 529

Net cash provided by (used in) investing activities 1,747 ( 6,699 )

Net cash (used in) provided by investing activities ( 14,823 ) 1,747 ( 6,699 )

Consolidated Statements of Cash Flows, continued

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Repurchases of common stock — ( 1,099 ) ( 959 )

Exercise of stock appreciation rights — —

Dividends paid ( 19,932 ) ( 29,865 ) ( 11,048 )

Net cash used in financing activities ( 19,932 ) ( 30,964 ) ( 12,007 )

Net Increase (Decrease) in Cash and Cash Equivalents 623 ( 11,280 )

Net (Decrease) Increase in Cash and Cash Equivalents ( 3,816 ) 623 ( 11,280 )

Cash and Cash Equivalents, Beginning of Period 24,654 24,031 35,311

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Non Cash Investing and Financing Activities:

Non cash net unrealized loss (gain) on investments, net of deferred tax benefit (expense) of $ 74 and $( 109 ) for December 31, 2024 and 2023, respectively

Non cash net unrealized (gain) loss on investments, net of deferred tax (expense) benefit of $( 188 ), $ 74 , and $( 109 ) for December 31, 2025, 2024, and 2023, respectively

$ ( 692 ) $ 283 $ ( 419 )

Adjustments to postretirement benefits obligation, net of deferred tax expense of $( 11 ), $ 0 , and $( 5 ) for December 31, 2025, 2024, and 2023, respectively

$ ( 44 ) $ — $ ( 19 )

Non cash 1031 exchange proceeds receivable $ — $ — $ ( 2,589 )

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The title insurance segment, through its two subsidiaries, Investors Title Insurance Company (“ITIC”) and National Investors Title Insurance Company (“NITIC”), is licensed to insure titles to residential, institutional, commercial and industrial properties.

The Company issues title insurance policies directly and through a network of agents in 22 states and the District of Columbia, primarily in the eastern half of the United States.

The majority of the Company’s title insurance business is concentrated in North Carolina, Texas, South Carolina, Georgia and Florida.

The Company issues title insurance policies directly and through a network of agents in 22 states, primarily in the eastern half of the United States.

The majority of the Company’s title insurance business is concentrated in North Carolina, Texas, Georgia, South Carolina and Florida.

Investors Title Exchange Corporation (“ITEC”) acts as an intermediary in tax-deferred exchanges of property held for productive use in a trade or business or for investments, while Investors Title Accommodation Corporation (“ITAC”) provides services for accomplishing reverse exchanges when taxpayers decide to acquire replacement property before selling the relinquished property.

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Investments in Fixed Maturity Securities :

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

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

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

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For available-for-sale fixed maturity securities in an unrealized loss position for which the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security, the Company evaluates the securities to determine whether the decline in the estimated fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors.

Any impairment that is not credit-related is recognized in other comprehensive (loss) income, net of applicable taxes.

Any impairment that is not credit-related is recognized in other comprehensive income (loss), net of applicable taxes.

Credit-related impairment is recognized as an allowance for credit losses (“ACL”) in the Consolidated Balance Sheets, limited to the amount by which the amortized cost basis exceeds the estimated fair value, with a corresponding adjustment to earnings.

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Properties acquired in settlement of claims are included in other assets in the Consolidated Balance Sheets.

Property and Equipment

Property, net

Property and equipment are recorded at cost and are depreciated principally under the straight-line method over the estimated useful lives ( 3 to 25 years) of the respective assets.

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Accumulated other comprehensive income as of December 31, 2024 consists of $ 300 thousand of unrealized holding gains on available-for-sale securities and $ 55 thousand of unrecognized actuarial gains associated with postretirement benefit liabilities.

Accumulated other comprehensive income as of December 31, 2023 consists of $ 583 thousand of unrealized holding gains on available-for-sale securities and $ 55 thousand of unrecognized actuarial gains associated with postretirement benefit liabilities.

Refer to Note 18 for further information regarding accumulated other comprehensive income.

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

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

Goodwill was reviewed for impairment as of December 31, 2025, and is reviewed at least annually, or when events or changes in circumstances indicate the carrying value may not be recoverable.

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Other Intangible Assets

The Company’s other intangible assets consist of non-compete agreements, referral relationships and a tradename resulting from agency acquisitions;

The Company’s other intangible assets consist of non-compete agreements, referral relationships and trade names resulting from agency acquisitions;

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

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

Assets with remaining useful lives will be amortized on a straight-line basis over those useful lives, which range from approximately 1 to 22 years as of December 31, 2024.

Assets with remaining useful lives will be amortized on a straight-line basis over those useful lives, which range from approximately 1 month to 30 years as of December 31, 2025.

Other intangible assets are reviewed for impairment at least annually or when events or changes in circumstances indicate the carrying value may not be recoverable.

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

Recently Issued Accounting Standards

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income taxes (Topic 740):

Improvements to Income Tax Disclosures .

The update expands income tax disclosures, including the rate reconciliation and income taxes paid.

The Company adopted ASU 2023-09 for the year ended December 31, 2025, on a retrospective basis, with no impact on its financial position or results of operations.

Refer to Note 8 to the Consolidated Financial Statements for further information on income taxes.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).

The update requires that an entity disclose additional information about specific expense categories.

The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The Company is evaluating the effect of this guidance on its financial statement disclosures, however, adoption will not impact its financial position or results of operations.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .

The update modifies the accounting for internal-use software development costs by eliminating the stage-based model and establishing new capitalization criteria that apply once a project is authorized and funded, and it is probable the software will be completed and used as intended.

The new guidance also introduces the concept of significant development uncertainty to help entities determine the appropriate timing of capitalization and integrates prior website development guidance into Accounting Standards Codification (“ASC”) 350-40.

The update is effective for annual periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently assessing the impact of adopting this guidance and does not expect the adoption to have a material effect on its financial position or results of operations.

Use of Estimates and Assumptions

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Management considers factors such as the Company’s historical claims experience, case reserve estimates on reported claims, large claims, actuarial projections and other relevant factors in determining its loss provision rates and the aggregate recorded expected liability for claims.

In establishing the reserve, actuarial projections are compared with recorded reserves to evaluate the adequacy of such recorded claims reserves and any necessary adjustments are then recorded in the current period’s statements of operations.

As the most recent claims experience develops and new information becomes available, the loss reserve estimate related to prior periods will change to more accurately reflect updated and improved emerging data.

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Premium revenues issued directly and by agency operations include accruals for transactions which have settled but have not been reported as of the balance sheet date.

These accruals are based on estimates of the typical lag time between settlement of real estate transactions and the reporting of these transactions to the Company.

Reporting lag times vary by market.

In certain markets, the lag time may be very short, but in others, can be as high as 3 months.

The Company reviews and adjusts lag time estimates periodically, using historical experience and other factors, and reflects any adjustments in the result of operations in the period in which new information becomes available.

To determine the estimated premiums, the Company uses historical experience, as well as other factors, to make certain assumptions about the average elapsed time between the Company’s initial notification of an opened order and the final settlement of the related real estate transaction.

From time to time, the Company adjusts the inputs to the estimation process as reported transactions and new information becomes available.

Securities are regularly evaluated and reviewed for differences between the cost and estimated fair value of each security for factors that may indicate that a decline in estimated fair value is an impairment.

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Combined capital and surplus on a statutory basis was $ 265.4 million and $ 247.1 million as of December 31, 2025 and 2024, respectively.

Net income on a statutory basis was $ 30.8 million and $ 31.6 million and for the years ended December 31, 2024 and 2023, respectively.

Net income on a statutory basis was $ 37.7 million, $ 30.8 million, and $ 31.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

The Company has designated approximately $ 55.6 million and $ 53.9 million of retained earnings as of December 31, 2025 and 2024, respectively, as appropriated to reflect the required statutory premium and supplemental reserves.

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

Government obligations

$ 300 $ 2 $ — $ 302

General obligations of U.S.

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As of December 31, 2025 (in thousands) Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses

Government obligations $ — $ — $ — $ — $ — $ —

General obligations of U.S.

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As of December 31, 2024 (in thousands) Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses

Government obligations $ 1,488 $ ( 2 ) $ — $ — $ 1,488 $ ( 2 )

General obligations of U.S.

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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 $ 74 thousand and $ 201 thousand of impairment charges related to fixed maturity securities for the twelve-month periods ended December 31, 2024 and 2023, respectively.

The Company recorded $ 0 thousand, $ 74 thousand, and $ 201 thousand of impairment charges related to fixed maturity securities for the twelve-month periods ended December 31, 2025, 2024, and 2023, respectively.

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

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Gross realized gains from securities:

Corporate debt securities $ 12 $ — $ —

Common stocks 5,499 5,525 16,350

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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 LLCs, as of December 31, 2024:

The following table sets forth details about the Company's variable interest investments in VIEs, which are structured either as limited partnerships ("LPs") or LLCs, as of December 31, 2025 and 2024:

December 31, 2025

Type of Investment (in thousands) Balance Sheet Classification Carrying Value Estimated

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Total $ 13,906 $ 15,545 $ 16,592

December 31, 2024

Type of Investment (in thousands) Balance Sheet Classification Carrying Value Estimated

Fair Value Maximum Potential

Real estate LLCs or LPs Other investments $ 10,514 $ 11,404 $ 14,653

Small business investment LLCs or LPs Other investments 1,184 1,184 1,403

Total $ 11,698 $ 12,588 $ 16,056

* Maximum potential loss is calculated as the total investment in the LLC or LP including any capital commitments that may have not yet been called.

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The following table presents, by level, fixed maturity securities carried at estimated fair value as of December 31, 2025 and 2024:

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

As of December 31, 2025 (in thousands)

Level 1 Level 2 * Level 3 Total

Fixed maturity securities:

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Total $ — $ 118,116 $ — $ 118,116

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

As of December 31, 2024 (in thousands)

Level 1 Level 2 * Level 3 Total

Fixed maturity securities:

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Financial assets:

Cash $ 24,654 $ — $ — $ 24,654

Cash and cash equivalents $ 20,838 $ — $ — $ 20,838

Accrued interest and dividends 1,476 — — 1,476

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Financial assets:

Cash $ 24,031 $ — $ — $ 24,031

Cash and cash equivalents $ 24,654 $ — $ — $ 24,654

Accrued interest and dividends 1,469 — — 1,469

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

There were two impairments of such investments made during the twelve-month periods ended December 31, 2024 and no impairments during the twelve-month period ended December 31, 2023.

There were no impairments of such investments made during the twelve-month period ended December 31, 2025 and two impairments during the twelve-month period ended December 31, 2024.

The following table presents assets measured at fair value on a non-recurring basis as of December 31, 2025 and 2024:

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There were no premiums assumed for 2025, 2024, and 2023.

Ceded premiums were approximately $ 89 thousand and $ 354 thousand for 2024 and 2023, respectively.

Ceded premiums were approximately $ 251 thousand, $ 89 thousand, and $ 354 thousand for 2025, 2024, and 2023, respectively.

Ceded reinsurance is comprised of excess of loss treaties, which outline the conditions in which the reinsurance company will pay claims and protect against losses over certain agreed upon amounts.

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Movements in the reserve related to prior periods were primarily the result of changes to estimates to better reflect the latest reported loss data.

The decrease in the provision for claims in 2024, compared to 2023, was primarily due to lower levels of favorable loss development in the current year period.

The increase in the provision for claims in 2025, compared to 2024, was primarily attributable to a higher level of risk underwritten during 2025.

The decrease in the provision for claims in 2024, compared to 2023, was primarily due to lower levels of favorable loss development in 2024.

Due to variances between actual and expected loss payments, loss development is subject to significant variability.

The Company does not recognize claim recoveries until an actual payment has been received by the Company.

The Company realized claim recoveries of approximately $ 332 thousand and $ 597 thousand during 2024 and 2023, respectively.

The Company realized claim recoveries of approximately $ 1.3 million, $ 332 thousand, and $ 597 thousand during 2025, 2024, and 2023, respectively.

The provision for claims as a percentage of net premiums written was 2.2 %, 2.2 %, and 2.8 % in 2025, 2024, and 2023, respectively.

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Weighted average common shares outstanding – Diluted

1,895 1,892 1,893

Basic earnings per common share $ 18.64 $ 16.48 $ 11.45

Diluted earnings per common share $ 18.57 $ 16.43 $ 11.45

There were 0 and 24 thousand potential shares excluded from the computation of diluted earnings per share in 2024 and 2023, respectively, due to the out-of-the-money status of the related share-based awards rendering them anti-dilutive.

There were 5 thousand, 0 , and 24 thousand potential shares excluded from the computation of diluted earnings per share in 2025, 2024, and 2023, respectively, due to the out-of-the-money status of the related share-based awards rendering them anti-dilutive.

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.

As of December 31, 2024 there was one active plan from which the Company may grant share-based awards and one legacy plan under which equity awards remain outstanding.

As of December 31, 2025 there was one active plan from which the Company may grant share-based awards.

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

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

During both 2024 and 2023, the Company issued share-settled SARs to directors of the Company.

During 2025, 2024, and 2023 the Company issued share-settled SARs to directors of the Company.

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

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SARs granted 5 142.88

SARs exercised ( 2 ) 93.87

SARs exercised/forfeited/expired ( 2 ) 93.87

Outstanding as of December 31, 2023

42 $ 160.83 3.69 $ 428

SARs granted 5 160.94

1 unchanged sentence

Outstanding as of December 31, 2024 28 $ 154.71 3.90 $ 2,312

SARs granted 5 246.75

SARs exercised/forfeited/expired ( 9 ) 158.04

Outstanding as of December 31, 2025 24 $ 170.67 3.91 $ 1,909

Exercisable as of December 31, 2025 21 $ 169.08 3.80 $ 1,696

1 unchanged sentence

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock at December 31.

The intrinsic values of SARs exercised during 2024 and 2023 were approximately $ 595 thousand and $ 156 thousand, respectively.

The intrinsic values of SARs exercised during 2025, 2024, and 2023 were approximately $ 348 thousand, $ 595 thousand, and $ 156 thousand, respectively.

There were no options outstanding at December 31, 2025.

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The weighted average fair values for the SARs issued during 2025, 2024, and 2023 were $ 64.00 , $ 55.52 , and $ 62.60 , respectively, and were estimated using the weighted average assumptions shown in the table below:

2025 2024 2023

Expected life in years 7.0 7.0 6.2 - 7.0

2 unchanged sentences

Yield rate 0.8 % 1.1 % 1.2 %

There was approximately $ 393 thousand and $ 425 thousand of compensation expense relating to SARs vesting on or before December 31, 2024 and 2023, respectively, included in personnel expenses in the Consolidated Statements of Operations.

There was approximately $ 531 thousand, $ 393 thousand, and $ 425 thousand of compensation expense relating to SARs vesting on or before December 31, 2025, 2024, and 2023, respectively, included in personnel expenses in the Consolidated Statements of Operations.

As of December 31, 2025, there was approximately $ 231 thousand of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Company’s stock award plans.

14 unchanged sentences

Accrued benefits and retirement services $ 4,163 $ 4,132

Lease assets 1,431 1,335

Net operating loss carryforward — 210

2 unchanged sentences

Allowance for doubtful accounts 6 6

Lease assets 1,335 1,354

Other 678 559

1 unchanged sentence

Deferred income tax liabilities:

Excess of tax over book depreciation 3,678 721

Net unrealized gain on investments 2,985 3,015

Recorded statutory premium reserve, net of reserves for claims 2,714 2,508

Intangible assets 730 797

Excess of tax over book depreciation 721 657

Lease liabilities 1,375 1,293

1031 gain 925 933

Intangible assets 860 730

Postretirement benefit 26 —

Other 1,142 1,295

7 unchanged sentences

Anticipated income tax expense $ 9,355 $ 8,287 $ 5,508

Increase (decrease) related to:

(Decrease) increase related to:

Research and development credit ( 172 ) ( 753 ) ( 921 )

State income taxes, net of federal income tax benefit 353 312 307

2 unchanged sentences

Provision for income taxes $ 9,369 $ 8,390 $ 4,544

A rate reconciliation of the December 31, 2025, 2024, and 2023 to the provision for income taxes, is as follows:

(in thousands) 2025 2024 2023

federal statutory rate 21.0 % 21.0 % 21.0 %

Research and development credit ( 0.4 ) % ( 1.9 ) % ( 3.5 ) %

State income taxes, net of federal income tax benefit 0.8 % 0.8 % 1.1 %

Tax-exempt interest income, net of amortization ( 1.6 ) % ( 2.5 ) % ( 2.0 ) %

Other, net 1.2 % 3.9 % 0.7 %

Effective income tax rate 21.0 % 21.3 % 17.3 %

Income taxes paid (net of refunds) are as follows:

(in thousands) 2025 2024 2023

federal $ 7,852 $ 6,268 $ 8,193

State 560 352 495

Foreign — — —

Total income taxes paid, net $ 8,412 $ 6,620 $ 8,688

The state and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category are North Carolina for years 2023 through 2025.

In accounting for uncertainty in income taxes, the Company is required to recognize in its Consolidated Financial Statements the impact of a tax position if that position is more likely than not of being sustained on an audit, based on the technical merits of the position.

In this regard, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes.

There were no unrecognized tax benefits or liabilities as of December 31, 2024.

In this regard, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring the provision for income taxes for financial reporting purposes.

There were no known unrecognized tax benefits or liabilities as of December 31, 2025.

The amount of unrecognized tax benefit or liability may increase or decrease in the future for various reasons, including adding amounts for current tax year positions, expiration of open income tax returns due to the expiration of the applicable statute of limitations, changes in management’s judgment about the level of uncertainty, status of examinations, litigation and legislative activity and the additions or eliminations of uncertain tax positions.

4 unchanged sentences

federal or state and local examinations by taxing authorities for years before 2021.

The One Big Beautiful Bill Act, enacted July 4, 2025, made significant updates to federal tax law.

The Company has reviewed the law’s provisions and incorporated the applicable impacts into the Company’s tax calculations and related disclosures.

The primary impact on the financial statements resulted in offsetting current/deferred adjustments to the provision for income taxes as it relates to the Company’s research and development expenditures.

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

14 unchanged sentences

Amortization of lease assets 204 259 237

Interest on lease liabilities 20 — —

Lease expense $ 2,331 $ 2,931 $ 2,991

21 unchanged sentences

Supplemental lease information for the years ended December 31 is as follows:

2025 2024 2023

Weighted average remaining lease term (years)

11 unchanged sentences

Individuals may elect to make contributions up to the maximum deductible amount as determined by the Internal Revenue Code of 1986, as amended (the “IRC”).

Expenses related to the 401(k) plan were approximately $ 2.0 million and $ 1.6 million for 2024 and 2023, respectively.

Expenses related to the 401(k) plan were approximately $ 2.0 million, $ 2.0 million, and $ 1.6 million for 2025, 2024, and 2023, respectively.

In November 2003, ITIC, a wholly owned subsidiary of the Company, entered into employment agreements with the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of ITIC.

2 unchanged sentences

The employment agreements also prohibit each of these executives from competing with ITIC and its parent, subsidiaries and affiliates in North Carolina while employed by ITIC and for a period of two years following termination of their employment.

In addition, during the second quarter of 2004, ITIC entered into nonqualified deferred compensation plan agreements with these executives.

The amounts accrued for all agreements at December 31, 2024 and 2023 were approximately $ 15.4 million and $ 15.2 million, respectively, which includes postretirement compensation and health benefits, and was calculated based on the terms of the contract.

Both the 2024 and 2023 accruals are included in the accounts payable and accrued liabilities line item of the Consolidated Balance Sheets.

In addition, during the second quarter of 2004, ITIC entered into employment agreements with certain executive officers.

The amounts accrued for all agreements at December 31, 2025 and 2024 were approximately $ 15.6 million and $ 15.4 million, respectively, which includes postretirement compensation and health benefits, and was calculated based on the terms of the contracts.

The 2025 and 2024 accruals are included in the accounts payable and accrued liabilities line item of the Consolidated Balance Sheets.

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

10 unchanged sentences

Amortization of unrecognized prior service cost — — —

Amortization of unrecognized (gain) loss — ( 37 )

Amortization of unrecognized gain ( 15 ) — ( 37 )

Net periodic benefits cost at end of year $ 35 $ — $ 28

14 unchanged sentences

Interest cost on projected benefit obligation ( 50 ) —

Actuarial (loss) gain ( 45 ) 87

Actuarial gain (loss) 55 ( 45 )

Accrued postretirement benefit obligation at end of year $ ( 946 ) $ ( 951 )

4 unchanged sentences

Unrecognized prior service cost — —

Amortization of gain (loss), net — ( 37 )

Amortization of loss, net ( 15 ) —

Actuarial gain 70 —

7 unchanged sentences

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.

As a service to its customers, the Company, through ITIC, administers escrow and 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.

Cash administered by the Company for these purposes was approximately $ 62.6 million and $ 55.0 million as of December 31, 2025 and 2024, respectively.

32 unchanged sentences

Total operating expenses 226,465 2,833 13,946 ( 15,038 ) 228,206

Income before income taxes $ 31,965 $ 8,346 $ 3,871 $ ( 4,719 ) $ 39,463

Income (loss) before income taxes $ 36,564 $ 11,175 $ ( 29 ) $ ( 3,161 ) $ 44,549

Total assets $ 259,982 $ 3,120 $ 100,036 $ — $ 363,138

13 unchanged sentences

Total assets $ 232,932 $ 6,179 $ 94,460 $ — $ 333,571

2023 (in thousands)

Insurance Exchange

Other Intersegment

Eliminations Total

Insurance and other services revenues $ 207,140 $ 13,270 $ 7,800 $ ( 19,715 ) $ 208,495

Net investment income 12,303 196 3,756 — 16,255

Total revenues 219,443 13,466 11,556 ( 19,715 ) 224,750

Commissions to agents 98,170 — — ( 14,796 ) 83,374

Provision for claims 4,762 — — — 4,762

Personnel expenses 68,851 2,236 5,619 — 76,706

Other 33,196 282 3,266 ( 3,066 ) 33,678

Total operating expenses 204,979 2,518 8,885 ( 17,862 ) 198,520

Income before income taxes $ 14,464 $ 10,948 $ 2,671 $ ( 1,853 ) $ 26,230

Total assets $ 216,622 $ 5,534 $ 108,403 $ — $ 330,559

Shareholders’ Equity

25 unchanged sentences

Business Concentration

The Company generates a significant amount of title insurance premiums in North Carolina, Texas, South Carolina, Georgia and Florida.

The Company generates a significant amount of title insurance premiums in North Carolina, Texas, Georgia, South Carolina and Florida.

In 2025, 2024, and 2023, these states generated the following percentage of total premiums written:

2 unchanged sentences

Texas 27.1 % 27.9 % 27.0 %

South Carolina 8.8 % 9.3 %

Georgia 8.6 % 7.6 % 6.8 %

South Carolina 8.1 % 8.8 % 9.3 %

Florida 6.4 % 7.2 % 4.0 %

12 unchanged sentences

Intangible Assets

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.

The estimated fair values of intangible assets recognized as the result of title insurance agency acquisitions are all Level 3 inputs.

Management determined that no events or changes in circumstances occurred during the periods ended December 31, 2025 and 2024 that would indicate the carrying amounts may not be recoverable, and therefore, determined that no identifiable intangible assets were impaired.

During the year ended December 31, 2025, the Company completed the acquisition of title insurance agencies for an aggregate estimated purchase price $ 12 million, including potential contingent payments that the Company deems probable, as part of its ongoing strategy to pursue opportunistic growth opportunities.

In connection with these acquisitions, the Company recorded $ 8.2 million in intangible assets and $ 2.5 million in goodwill.

Additional changes in goodwill and intangible assets in 2025 were related to a transfer of assets to a joint venture.

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

13 unchanged sentences

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

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

In accordance with FASB’s Accounting Standards Codification (“ASC”) 350, the Company determined that no events or changes in circumstances occurred during the periods ended December 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.

In accordance with FASB’s ASC 350, the Company determined that no events or changes in circumstances occurred during the periods ended December 31, 2025 and 2024 that would indicate the carrying amounts may not be recoverable, and therefore, determined that there were no goodwill or title plant impairments.

Accumulated Other Comprehensive Income

5 unchanged sentences

Beginning balance at January 1 $ 300 $ 55 $ 355

Other comprehensive (loss) income before calculations ( 339 ) — ( 339 )

Other comprehensive income before calculations 702 44 746

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive (loss) income ( 283 ) — ( 283 )

( 10 ) — ( 10 )

Net current-period other comprehensive income 692 44 736

Ending balance $ 992 $ 99 $ 1,091

4 unchanged sentences

Beginning balance at January 1 $ 583 $ 55 $ 638

Other comprehensive (loss) income before calculations ( 339 ) — ( 339 )

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive loss ( 283 ) — ( 283 )

Ending balance $ 300 $ 55 $ 355

2023 (in thousands)

Unrealized Gains and Losses

On Available-for-Sale

Securities Postretirement

Benefits Plans

Beginning balance at January 1 $ 164 $ 36 $ 200

Other comprehensive income before calculations 259 19 278

10 unchanged sentences

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

Net realized gains on investments $ 12

Impairments of securities —

Total $ 12 Net investment gains

Tax ( 2 ) Provision for Income Taxes

Net of Tax $ 10

Reclassifications for the period $ 10

2024 (in thousands)

Details about Accumulated Other Comprehensive Income Components

Amount Reclassified from

Accumulated Other Comprehensive Income

Affected Line Item in the

Statements of Operations

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

Net realized losses on investments $ —

43 unchanged sentences

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

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk