What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-05-11 · 81 added, 70 removed, 300 unchanged (33% 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 91.1% of the Company's revenues for the three-month period ended March 31, 2026.

Total revenues from the title segment accounted for 92.0% of the Company's revenues for the six-month period ended June 30, 2026.

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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Starting at the March 2022 meeting of the FOMC through July 2023, the FOMC repeatedly increased the target range, reaching a high of between 5.25% and 5.50%.

During several meetings in 2024 and 2025, the FOMC has lowered the federal funds rate.

During several meetings in 2024 and 2025, the FOMC lowered the federal funds rate.

The most recent adjustment, in December 2025, reduced the target range to 3.5% and 3.75%.

During the first quarter of 2026, the FOMC maintained the target range for the federal funds rate, indicating that future policy actions would depend on continued evaluation of incoming economic data, changes in the economic outlook, and the balance of associated risks.

Through the second quarter of 2026, the FOMC maintained the target range for the federal funds rate, indicating that future policy actions would depend on continued evaluation of incoming economic data, changes in the economic outlook, and the balance of associated risks.

In normal economic situations, future adjustments to the FOMC’s stance of monetary policy are expected to be based on realized and expected economic developments to achieve maximum employment and inflation near the FOMC's symmetric long-term 2.0% objective.

Real Estate Environment

The Mortgage Bankers Association's ("MBA") April 20, 2026 Mortgage Finance Forecast (“MBA Forecast”) projects 2026 purchase activity to increase 4.6% to $1.4 trillion and mortgage refinance activity to increase 10.8% to $769 billion, resulting in a net increase in total mortgage originations of 6.7% to $2.2 trillion, all from 2025 levels.

The Mortgage Bankers Association's ("MBA") July 22, 2026 Mortgage Finance Forecast (“MBA Forecast”) projects 2026 purchase activity to increase 4.4% to $1.4 trillion and mortgage refinance activity to increase 7.6% to $747 billion, resulting in a net increase in total mortgage originations of 5.5% to $2.2 trillion, all from 2025 levels.

In 2025, purchase activity accounted for 66.1% of all mortgage originations and is projected in the MBA Forecast to represent 65.5% of all mortgage originations in 2026.

According to data published by Freddie Mac, the average 30-year fixed mortgage interest rates in the United States were 6.1% and 6.8% for the three-month periods ended March 31, 2026 and 2025, respectively.

Per the MBA Forecast, mortgage interest rates are projected to increase in subsequent periods, reaching 6.3% in 2027 and 6.5% in 2028.

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.

According to data published by Freddie Mac, the average 30-year fixed mortgage interest rates in the United States were 6.3% and 6.8% for the six-month periods ended June 30, 2026 and 2025, respectively.

The MBA Forecast projects that mortgage interest rates will reach 6.5% in 2026 and remain relatively flat through 2028.

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

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.

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Actual results could differ from these estimates.

During the three-month period ended March 31, 2026, the Company did not make any material changes to its critical accounting policies as previously disclosed in Management's Discussion and Analysis in the 2025 Form 10-K.

During the six-month period ended June 30, 2026, the Company did not make any material changes to its critical accounting policies as previously disclosed in Management's Discussion and Analysis in the 2025 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, 2026 and 2025:

The following table presents certain unaudited Consolidated Statements of Operations data for the three- and six-month periods ended June 30, 2026 and 2025:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2026 2025 2026 2025

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Other investment income 667 609 1,331 1,019

Net investment gains (losses) 524 (1,179)

Net investment gains 4,795 2,104 5,319 925

Other 154 2,908 336 3,057

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Net Premiums Written

Net premiums written increased 9.9% for the three-month period ended March 31, 2026 to $50.9 million, compared with $46.3 million for the same prior year period.

The increase for the three-month period ended March 31, 2026 was primarily due to higher levels of real estate activity and ongoing expansion initiatives.

Net premiums written increased 23.9% and 17.5% for the three- and six-month periods ended June 30, 2026 to $67.5 million and $118.5 million, respectively, compared with $54.5 million and $100.8 million for the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2026 were primarily due to higher levels of real estate activity and ongoing expansion initiatives.

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, 2026 and 2025:

Three Months Ended March 31,

Following is a breakdown of premiums generated by direct and agency operations for the three- and six-month periods ended June 30, 2026 and 2025:

Three Months Ended

June 30, Six Months Ended

(in thousands, except percentages) 2026 % 2025 % 2026 % 2025 %

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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 5.1% for the three-month period ended March 31, 2026, compared with the same prior year period.

The increase for the three-month period ended March 31, 2026 was primarily due to higher levels of real estate activity and ongoing expansion initiatives.

Net premiums written from direct operations increased 24.8% and 15.7% for the three- and six-month periods ended June 30, 2026, respectively, compared with the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2026 were primarily the result of higher levels of real estate activity and ongoing expansion initiatives.

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 11.9% for the three-month period ended March 31, 2026, compared with the same prior year period.

The increase for the three-month period ended March 31, 2026 was primarily due to higher levels of real estate activity and ongoing expansion initiatives.

Following is a schedule of net premiums written for the three-month periods ended March 31, 2026 and 2025 in select states in which the Company's two insurance subsidiaries, ITIC and NITIC, currently underwrite title insurance:

Agency net premiums written increased 23.6% and 18.2% for the three- and six-month periods ended June 30, 2026, respectively, compared with the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2026 were primarily due to higher levels of real estate activity and ongoing expansion initiatives.

Following is a schedule of net premiums written for the three- and six-month periods ended June 30, 2026 and 2025 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) 2026 2025 2026 2025

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The Texas Commissioner of Insurance approved a 6.2% reduction in title insurance rates that became effective March 1, 2026.

The North Carolina Department of Insurance recently approved a 9.4% rate increase that became effective October 1, 2025, and the Ohio Department of Insurance approved a 9.0% rate increase that became effective January 1, 2026.

The North Carolina Department of Insurance approved a 9.4% rate increase that became effective October 1, 2025, and the Ohio Department of Insurance approved a 9.0% rate increase that became effective January 1, 2026.

Overall, the Company anticipates that these rate adjustments, along with other approved rate changes, will have a favorable net impact on premium revenues in future reporting periods.

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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 $5.0 million for the three-month period ended March 31, 2026, compared with $3.9 million for the same prior year period.

The increase for the three-month period ended March 31, 2026 was primarily due to higher levels of real estate activity and ongoing expansion initiatives.

Escrow and other title-related fee revenues were $6.0 million and $11.0 million for the three- and six-month periods ended June 30, 2026, respectively, compared with $5.7 million and $9.6 million for the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2026 were primarily due to higher levels of real estate activity and ongoing expansion initiatives.

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 $4.4 million for the three-month period ended March 31, 2026, compared with $4.6 million for the same prior year period.

The decrease for the three-month period ended March 31, 2026 was primarily related to lower revenue from like-kind exchanges.

Non-title service revenues were $5.1 million and $9.5 million for the three- and six-month periods ended June 30, 2026, respectively, compared with $5.5 million and $10.1 million for the same prior year periods.

The decreases for the three- and six-month periods ended June 30, 2026 were primarily related to declines in revenue from like-kind exchanges.

Investment-Related Revenues

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

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, 2026 is less than 10 years.

The average effective maturity of the majority of the fixed maturity securities at June 30, 2026 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 remained consistent at $2.3 million for the three-month periods ended March 31, 2026 and 2025.

Interest and dividends were $2.3 million and $4.6 million for the three- and six-month periods ended June 30, 2026, respectively, compared with $2.4 million and $4.7 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 decreases for the three- and six-month periods ended June 30, 2026 were primarily due to declines in lower average yields.

Other Investment Income

Other investment income consists primarily of income related to investments in unconsolidated affiliates, typically structured as limited liability companies ("LLCs"), accounted for under either the equity method of accounting or the measurement alternative for investments that do not have readily determinable fair values.

Other investment income consists primarily of income related to investments in unconsolidated affiliates, typically structured as either limited partnerships ("LPs") or limited liability companies ("LLCs"), accounted for under either the equity method of accounting or the measurement alternative for investments that do not have readily determinable fair values.

The measurement alternative method requires investments without readily determinable fair values to be recorded at cost, less impairments, and plus or minus any changes resulting from observable price changes.

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 $664 thousand for the three-month period ended March 31, 2026, compared with $410 thousand for the same prior year period.

Other investment income was $667 thousand and $1.3 million for the three- and six-month periods ended June 30, 2026, respectively, compared with $609 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 Gains (Losses)

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 $117 thousand for the three-month period ended March 31, 2026, compared with $2.0 million for the same prior year period.

The Company did not record any impairment charges in the three-month period ended March 31, 2026, compared to $275 thousand on other investments for the same prior year period.

Management believes unrealized losses on the remaining fixed maturity securities at March 31, 2026 are temporary in nature.

The net realized investment gains were $1.5 million and $1.6 million for the three- and six-month periods ended June 30, 2026, respectively, compared with $1.1 million and $3.1 million for the same prior year periods.

The Company recorded impairment charges of $362 thousand on other investments for both the three- and six-month periods ended June 30, 2026, compared with $144 thousand and $419 thousand on other investments for the same prior year periods.

Management believes unrealized losses on the remaining fixed maturity securities at June 30, 2026 are temporary in nature.

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

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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 $407 thousand for the three-month period ended March 31, 2026, compared with $(3.2) million for the same prior year period.

Changes in the Estimated Fair Value of Equity Security Investments – Changes in the estimated fair value of equity security investments were $3.3 million and $3.7 million for the three- and six-month periods ended June 30, 2026, respectively, compared with $973 thousand and $(2.2) million 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.

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

Other revenues were $182 thousand for the three-month period ended March 31, 2026, compared with $149 thousand for the same prior year period.

Other revenues were $154 thousand and $336 thousand for the three- and six-month periods ended June 30, 2026, respectively, compared with $2.9 million and $3.1 million for the same prior year periods.

The decreases for the three- and six-month periods ended June 30, 2026 were primarily due to non-recurring gains from the prior year.

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 7.2% for the three-month period ended March 31, 2026, compared with the same prior year period.

The increase for the three-month period ended March 31, 2026 was primarily due to increases in commissions to agents, personnel expenses and other expenses.

Following is a summary of the Company's operating expenses for the three-month periods ended March 31, 2026 and 2025.

Operating expenses increased 15.9% and 11.8% for the three- and six-month periods ended June 30, 2026, compared with the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2026 were primarily due to increases in commissions to agents, personnel expenses and the provision for claims.

Following is a summary of the Company's operating expenses for the three- and six-month periods ended June 30, 2026 and 2025.

Inter-segment eliminations have been netted;

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Three Months Ended

June 30, Six Months Ended

(in thousands, except percentages) 2026 % 2025 % 2026 % 2025 %

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Total $ 67,057 100.0 $ 57,851 100.0 $ 123,355 100.0 $ 110,363 100.0

On a combined basis, the after-tax profit margin was 9.5% for the three-month period ended March 31, 2026, compared with 5.6% for the same prior year period.

The increase for the three-month period ended March 31, 2026 was primarily due to growth in net premiums written, escrow and other title-related fees, and net investment gains (losses), partially offset by increases in commissions to agents, personnel expenses and other expenses.

On a combined basis, the after-tax profit margins were 16.9% and 13.8% for the three- and six-month periods ended June 30, 2026, respectively, compared with 16.7% and 11.9% for the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2026 were primarily attributable to increases in net premiums written, escrow and other title-related fees, and net investment gains, partially offset by decreases in other revenues and increases in commissions to agents, personnel expenses and the provision for claims.

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 $19.0 million for the three-month period ended March 31, 2026, compared with $18.3 million for the same prior year period.

The increase in personnel expenses for the three-month period ended March 31, 2026 was primarily due to merit increases in salaries and contractor expenditures.

On a consolidated basis, personnel expenses as a percentage of total revenues were 29.7% for the three-month period ended March 31, 2026, compared with 32.4% for the same prior year period.

Personnel expenses were $19.0 million and $38.1 million for the three- and six-month periods ended June 30, 2026, respectively, compared with $17.5 million and $35.8 million for the same prior year periods.

The increases in personnel expenses for the three- and six-month periods ended June 30, 2026 were primarily due to increases in staffing levels and incentive compensation.

On a consolidated basis, personnel expenses as a percentage of total revenues were 22.0% and 25.3% for the three- and six-month periods ended June 30, 2026, respectively, compared with 23.7% and 27.5% for the same prior year periods.

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 relatively consistent with the prior year period at $4.5 million for the three-month periods ended March 31, 2026 and 2025.

Office and technology expenses were $4.7 million and $9.2 million for the three- and six-month periods ended June 30, 2026, respectively, compared with $4.3 million and $8.9 million for the same prior year periods.

The increases for the three- and six-month periods ended June 30, 2026 were primarily due to increases in software expenses.

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 were $4.8 million for the three-month period ended March 31, 2026, compared with $4.5 million for the same prior year period.

The increase for the three-month period ended March 31, 2026 was primarily due to increases in expenses associated with higher title insurance revenues and business development expenses, partially offset by a decline in professional service expenses.

Other expenses were $4.9 million and $9.8 million for the three- and six-month periods ended June 30, 2026, respectively, compared with $4.9 million and $9.4 million for the same prior year periods.

The increase for the six-months ended June 30, 2026 was primarily due to increases in expenses associated with higher title insurance revenues, partially offset by a decline in professional fees.

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 10.4% for the three-month period ended March 31, 2026, compared with the same prior year period.

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

Commission expense as a percentage of net premiums written by agents was 74.8% for the three-month period ended March 31, 2026, compared with 75.8% for the same prior year period.

Commissions to agents increased 22.6% and 17.0% for the three- and six-month periods ended June 30, 2026, respectively, compared with the same prior year periods.

The changes in commission expense were commensurate with the increases in agent premium volume.

Commission expense as a percentage of net premiums written by agents was 74.6% and 74.7% for the three- and six-month periods ended June 30, 2026, respectively, compared with 75.2% and 75.4% for the same prior year periods.

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

Provision for Claims – The provision for claims increased 46.1% for the three-month period ended March 31, 2026, compared with the same prior year period.

The provision for claims as a percentage of net premiums written was 0.9% for the three-month period ended March 31, 2026, compared with 0.7% for the same prior year period.

The increase in the provision for claims as a percentage of net premiums written for the three-month period ended March 31, 2026 was primarily attributable to actuarial projections resulting in higher current‑year loss expectations.

Provision for Claims – The provision for claims increased 33.8% and 35.5% for the three- and six-month periods ended June 30, 2026, respectively, compared with the same prior year periods.

The provision for claims as a percentage of net premiums written was 4.1% and 2.7% for the three- and six-month periods ended June 30, 2026, respectively, compared with 3.8% and 2.4% for the same prior year periods.

The increases in the provision for claims for the three- and six-month periods ended June 30, 2026 were primarily due to the impacts of increased premium volume and changes in actuarially determined loss ratio estimates.

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 $670 thousand and $386 thousand for the three-month periods ended March 31, 2026 and 2025, respectively.

At March 31, 2026, the total reserve for claims was $37.9 million.

Actual payments of claims, net of recoveries, were $2.2 million and $1.4 million for the six-month periods ended June 30, 2026 and 2025, respectively.

At June 30, 2026, the total reserve for claims was $39.1 million.

Of that total, approximately $2.8 million was reserved for specific claims, and approximately $36.3 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 $1.6 million for the three-month period ended March 31, 2026, compared with $882 thousand for the same prior year period.

Income tax expense, including federal and state taxes, as a percentage of income before income taxes was 21.4% for the three-month period ended March 31, 2026, compared with 21.8% for the same prior year period.

The provision for income taxes was $4.8 million and $6.5 million for the three- and six-month periods ended June 30, 2026, respectively, compared with $3.5 million and $4.4 million for the same prior year periods.

Income tax expense, including federal and state taxes, as a percentage of income before income taxes was 24.8% and 23.8% for the three- and six-month periods ended June 30, 2026, respectively, compared with 22.3% and 22.2% for the same prior year periods.

The effective income tax rates for both 2026 and 2025 differ from the U.S.

federal statutory income tax rate of 21% primarily due to the effects of tax credits, 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, 2026 will be realized.

federal statutory income tax rate of 21% primarily due to the effect of tax credits, 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 June 30, 2026 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.

The Company recognized the impact of the now-effective provisions of this legislative change beginning in the third quarter of 2025 in accordance with ASC 740, Income Taxes.

Liquidity and Capital Resources

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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 flows provided by (used in) operating activities were $1.6 million and $(75) thousand for the three-month periods ended March 31, 2026 and 2025, respectively.

Cash flows provided by (used in) 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 $9.8 million and $8.8 million for the six-month periods ended June 30, 2026 and 2025, 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 related to 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 and used in financing activities for the three-month periods ended March 31, 2026 and 2025.

Net cash was used in investing activities and financing activities for the six-month periods ended June 30, 2026 and 2025.

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, 2026, the Company held cash and cash equivalents of $26.7 million, short-term investments of $58.4 million, available-for-sale fixed maturity securities of $117.3 million and equity securities of $46.4 million.

The net effect of all activities on total cash and cash equivalents was an increase of $5.9 million in 2026.

As of June 30, 2026, the Company held cash and cash equivalents of $20.5 million, short-term investments of $51.7 million, available-for-sale fixed maturity securities of $130.5 million and equity securities of $51.3 million.

The net effect of all activities on total cash and cash equivalents was a decrease of $374 thousand in 2026.

Capital Resources – The amount of capital resources the Company maintains is influenced by state regulation, the need to maintain superior financial ratings from third-party rating agencies and other marketing and operational considerations.

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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, 2026, both ITIC and NITIC met the minimum capital, surplus and reserve requirements for each state in which they are licensed.

As of June 30, 2026, 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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The Company is carefully monitoring the U.S.

political environment, inflation, geopolitical and military tensions and 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.

political environment, including the impacts of federal government shutdowns, inflation, geopolitical and military tensions and 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 periods ended March 31, 2026 and 2025.

Pursuant to the Company’s ongoing purchase program, the Company purchased no shares in the six-month periods ended June 30, 2026 and 2025.

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 $1.1 million for the three-month period ended March 31, 2026 .

Capital Expenditures – Capital expenditures were approximately $2.9 million for the six-month period ended June 30, 2026 .

In 2026, 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, 2026, the Company had a claims reserve totaling $37.9 million.

Contractual Obligations - As of June 30, 2026, the Company had a claims reserve totaling $39.1 million.

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

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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, 2026 and December 31, 2025, were $15.7 million and $15.6 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, 2026 and December 31, 2025, were $15.8 million and $15.6 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.

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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 $291.4 million and $269.3 million as of March 31, 2026 and December 31, 2025, respectively.

Like-kind exchange deposits and reverse exchange property held by the Company for the purpose of completing such transactions totaled approximately $329.1 million and $269.3 million as of June 30, 2026 and December 31, 2025, respectively.

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

49 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