ITIC Investors Title Company

Investors Title Company (Nasdaq: ITIC) today announced results for the third quarter ended September 30, 2024. The Company reported net income of $9.3 million, or $4.92 per diluted share, compared with $7.1 million, or $3.75 per diluted share, for the prior year period.

Revenues increased 12.1% to $68.8 million, compared to $61.4 million in the prior year period, primarily due to an increase in net premiums written and a positive change in net investment gains (losses). Net premiums written increased primarily due to expansion efforts in our Texas and Florida markets, in addition to appreciation in average home prices and higher activity levels related to lower average mortgage interest rates. The improvement in net investment gains (losses) was due to the impact of positive changes in the estimated fair value of equity security investments during the current year quarter.

Operating expenses increased 8.4% to $57.2 million, compared to $52.8 million in the prior year period. The increase in operating expenses was primarily due to higher agent commissions, commensurate with the increase in agent premium volume, partially offset by a decrease in personnel expenses resulting from lower staffing levels. Other categories of operating expenses were in line with the prior year period.

Income before income taxes increased to $11.6 million for the current year quarter, versus $8.6 million in the prior year period. Excluding the impact of net investment gains (losses), adjusted income before income taxes (non-GAAP) increased to $10.6 million for the current year quarter, versus $9.4 million in the prior year period (see Appendix A for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure).

For the nine months ended September 30, 2024, net income increased $6.9 million to $22.7 million, or $12.02 per diluted share, versus $15.9 million, or $8.37 per diluted share, for the prior year period. Revenues increased 9.7% to $187.7 million, compared with $171.1 million for the prior year period. Operating expenses increased 5.3% to $159.0 million, compared to $151.1 million for the prior year period. Overall results for the year-to-date period have been shaped predominantly by the same factors that affected the third quarter.

Chairman J. Allen Fine commented, "We were pleased to see an increase in revenues and net income for the third quarter, driven mostly by higher volume, particularly in agent-focused markets. Expenses were up in total due to higher commissions resulting from an increase in volume, but overhead costs were down from the prior year period due to cost-saving measures.

"Market conditions remain challenging for the industry and transaction volumes remain materially below levels seen in the years immediately following the COVID pandemic. However, activity seems to have generally stabilized, and third quarter volumes were higher than the second quarter of the year.

"Interest rates declined over the course of the quarter as the Fed began easing monetary policy, although some of the improvement was offset by the subsequent release of surprisingly strong economic data. Regardless of market conditions, we will continue to focus on achieving our strategic goals and improving our competitive positioning."

Investors Title Company’s subsidiaries issue and underwrite title insurance policies. The Company also provides investment management services and services in connection with tax-deferred exchanges of like-kind property.

Cautionary Statements Regarding Forward-Looking Statements

Certain statements contained herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of words such as “plan,” expect,” “aim,” “believe,” “project,” “anticipate,” “intend,” “estimate,” “should,” “could,” “would,” and other expressions that indicate future events and trends. Such statements include, among others, any statements regarding the Company’s expected performance for this year, future home price fluctuations, changes in home purchase or refinance demand, activity and the mix thereof, interest rate changes, expansion of the Company’s market presence, enhancing competitive strengths, development in housing affordability, wages, unemployment or overall economic conditions or statements regarding our actuarial assumptions and the application of recent historical claims experience to future periods. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from anticipated and historical results. Such risks and uncertainties include, without limitation: the cyclical demand for title insurance due to changes in the residential and commercial real estate markets; the occurrence of fraud, defalcation or misconduct; variances between actual claims experience and underwriting and reserving assumptions, including the limited predictive power of historical claims experience; declines in the performance of the Company’s investments; government regulations; changes in the economy; the impact of inflation and responses by government regulators, including the Federal Reserve, such as changes in interest rates; loss of agency relationships, or significant reductions in agent-originated business; difficulties managing growth, whether organic or through acquisitions and other considerations set forth under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission, and in subsequent filings.

Investors Title Company and Subsidiaries

Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2024 and 2023

(in thousands, except per share amounts)

(unaudited)

     

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2024

 

2023

 

2024

 

2023

Revenues:

 

 

 

 

 

 

 

 

Net premiums written

 

$

54,855

 

$

49,822

 

 

$

146,451

 

$

132,793

Escrow and other title-related fees

 

 

4,574

 

 

4,683

 

 

 

13,098

 

 

12,942

Non-title services

 

 

4,305

 

 

4,636

 

 

 

12,913

 

 

14,513

Interest and dividends

 

 

2,736

 

 

2,313

 

 

 

7,824

 

 

6,537

Other investment income

 

 

995

 

 

514

 

 

 

1,996

 

 

2,915

Net investment gains (losses)

 

 

976

 

 

(815

)

 

 

4,640

 

 

720

Other

 

 

388

 

 

257

 

 

 

748

 

 

647

Total Revenues

 

 

68,829

 

 

61,410

 

 

 

187,670

 

 

171,067

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

Commissions to agents

 

 

29,089

 

 

23,806

 

 

 

75,509

 

 

63,735

Provision for claims

 

 

1,668

 

 

1,838

 

 

 

3,483

 

 

3,897

Personnel expenses

 

 

18,057

 

 

19,083

 

 

 

54,793

 

 

58,451

Office and technology expenses

 

 

4,388

 

 

4,209

 

 

 

13,161

 

 

13,122

Other expenses

 

 

4,039

 

 

3,864

 

 

 

12,072

 

 

11,845

Total Operating Expenses

 

 

57,241

 

 

52,800

 

 

 

159,018

 

 

151,050

 

 

 

 

 

 

 

 

 

Income before Income Taxes

 

 

11,588

 

 

8,610

 

 

 

28,652

 

 

20,017

 

 

 

 

 

 

 

 

 

Provision for Income Taxes

 

 

2,273

 

 

1,526

 

 

 

5,941

 

 

4,167

 

 

 

 

 

 

 

 

 

Net Income

 

$

9,315

 

$

7,084

 

 

$

22,711

 

$

15,850

 

 

 

 

 

 

 

 

 

Basic Earnings per Common Share

 

$

4.94

 

$

3.75

 

 

$

12.05

 

$

8.37

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding – Basic

 

 

1,884

 

 

1,891

 

 

 

1,885

 

 

1,894

 

 

 

 

 

 

 

 

 

Diluted Earnings per Common Share

 

$

4.92

 

$

3.75

 

 

$

12.02

 

$

8.37

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding – Diluted

 

 

1,893

 

 

1,891

 

 

 

1,889

 

 

1,894

Investors Title Company and Subsidiaries

Consolidated Balance Sheets

As of September 30, 2024 and December 31, 2023

(in thousands)

(unaudited)

 

 

 

September 30,

 

December 31,

 

2024

2023

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

25,464

 

$

24,031

 

 

 

 

 

Investments:

 

 

 

 

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

 

 

103,368

 

 

63,847

Equity securities, at fair value

 

 

37,753

 

 

37,212

Short-term investments

 

 

87,449

 

 

110,224

Other investments

 

 

20,640

 

 

17,385

Total investments

 

 

249,210

 

 

228,668

 

 

 

 

 

Premiums and fees receivable

 

 

14,228

 

 

13,338

Accrued interest and dividends

 

 

1,468

 

 

978

Prepaid expenses and other receivables

 

 

9,585

 

 

13,525

Property, net

 

 

27,453

 

 

23,886

Goodwill and other intangible assets, net

 

 

15,349

 

 

16,249

Lease assets

 

 

5,883

 

 

6,303

Other assets

 

 

2,649

 

 

2,500

Current income taxes recoverable

 

 

697

 

 

1,081

Total Assets

 

$

351,986

 

$

330,559

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

Reserve for claims

 

$

37,049

 

$

37,147

Accounts payable and accrued liabilities

 

 

33,911

 

 

31,864

Lease liabilities

 

 

6,088

 

 

6,449

Deferred income taxes, net

 

 

3,625

 

 

3,546

Total liabilities

 

 

80,673

 

 

79,006

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

Common stock – no par value (10,000 authorized shares; 1,884 and 1,891 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively, excluding in each period 292 shares of common stock held by the Company's subsidiary)

 

 

—

 

 

—

Retained earnings

 

 

270,225

 

 

250,915

Accumulated other comprehensive income

 

 

1,088

 

 

638

Total stockholders’ equity

 

 

271,313

 

 

251,553

Total Liabilities and Stockholders’ Equity

 

$

351,986

 

$

330,559

Investors Title Company and Subsidiaries

Direct and Agency Net Premiums Written

For the Three and Nine Months Ended September 30, 2024 and 2023

(in thousands)

(unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

%

 

2023

 

%

 

2024

 

%

 

2023

 

%

Direct

 

$

16,267

 

29.7

 

$

17,485

 

35.1

 

$

45,119

 

30.8

 

$

45,975

 

34.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agency

 

 

38,588

 

70.3

 

 

32,337

 

64.9

 

 

101,332

 

69.2

 

 

86,818

 

65.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

54,855

 

100.0

 

$

49,822

 

100.0

 

$

146,451

 

100.0

 

$

132,793

 

100.0

Investors Title Company and Subsidiaries Appendix A Non-GAAP Measures Reconciliation For the Three and Nine Months Ended September 30, 2024 and 2023 (in thousands) (unaudited)

Management uses various financial and operational measurements, including financial information not prepared in accordance with generally accepted accounting principles ("GAAP"), to analyze Company performance. This includes adjusting revenues to remove the impact of net investment gains and losses, which are recognized in net income under GAAP. Net investment gains and losses include realized gains and losses on sales of investment securities and changes in the estimated fair value of equity security investments. Management believes that these measures are useful to evaluate the Company's internal operational performance from period to period because they eliminate the effects of external market fluctuations. The Company also believes users of the financial results would benefit from having access to such information, and that certain of the Company’s peers make available similar information. This information should not be used as a substitute for, or considered superior to, measures of financial performance prepared in accordance with GAAP, and may be different from similarly titled non-GAAP financial measures used by other companies.

The following tables reconcile non-GAAP financial measurements used by Company management to the comparable measurements using GAAP:

 

 

Three Months Ended

 

Nine Months Ended

September 30,

September 30,

 

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Total revenues (GAAP)

 

$

68,829

 

 

$

61,410

 

$

187,670

 

 

$

171,067

 

(Subtract) Add: Net investment (gains) losses

 

 

(976

)

 

 

815

 

 

(4,640

)

 

 

(720

)

Adjusted revenues (non-GAAP)

 

$

67,853

 

 

$

62,225

 

$

183,030

 

 

$

170,347

 

 

 

 

 

 

 

 

 

 

Income before Income Taxes

 

 

 

 

 

 

 

 

Income before income taxes (GAAP)

 

$

11,588

 

 

$

8,610

 

$

28,652

 

 

$

20,017

 

(Subtract) Add: Net investment (gains) losses

 

 

(976

)

 

 

815

 

 

(4,640

)

 

 

(720

)

Adjusted income before income taxes (non-GAAP)

 

$

10,612

 

 

$

9,425

 

$

24,012

 

 

$

19,297

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241104312948/en/

Elizabeth B. Lewter Telephone: (919) 968-2200