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Investors Title Company Announces Fourth Quarter and Fiscal Year 2024 Results

Investors Title Company Announces Fourth Quarter and Fiscal Year 2024 Results

CHAPEL HILL, N.C.–(BUSINESS WIRE)–
Investors Title Company (Nasdaq: ITIC) today announced results for the fourth quarter ended December 31, 2024. The Company reported net income of $8.4 million, or $4.41 per diluted share, compared with $5.8 million, or $3.09 per diluted share, for the prior year period.

Revenues increased 31.6% to $70.6 million, compared to $53.7 million in the prior year period, primarily due to increases in net premiums written and escrow and title-related fees, partially offset by a decline in net investment gains. The increase in net premiums written and escrow and title-related fees was mainly driven by increased activity levels, which were influenced by ongoing expansion initiatives and lower average mortgage interest rates, and appreciation in average home prices. The decrease in net investment gains was mostly due to the impact of changes in the estimated fair value of equity security investments and reduced sales activity during the current year quarter.

Operating expenses increased 26.0% to $59.8 million, compared to $47.5 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 generally in line with the prior year period.

Income before income taxes increased to $10.8 million for the current year quarter, versus $6.2 million in the prior year period. Excluding the impact of net investment gains, adjusted income before income taxes (non-GAAP) increased to $10.8 million for the current year quarter, versus $3.5 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 twelve months ended December 31, 2024, net income increased $9.4 million to $31.1 million, or $16.43 per diluted share, versus $21.7 million, or $11.45 per diluted share, for the prior year period. Revenues increased 14.9% to $258.3 million, compared with $224.8 million for the prior year period. Operating expenses increased 10.2% to $218.8 million, compared to $198.5 million for the prior year period. Income before income taxes increased to $39.5 million for the current year, versus $26.2 million in the prior year period. Excluding the impact of net investment gains, adjusted income before income taxes (non-GAAP) increased to $34.8 million for the current year, versus $22.8 million in the prior year period (see Appendix A for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure). Overall results for the full year period have been shaped predominantly by the same factors that affected the fourth quarter. Positive changes in the estimated fair value of equity security investments resulted in higher net investment gains compared to the prior year period.

Chairman J. Allen Fine commented, “We are pleased to report growth in both revenue and net income for the fourth quarter in comparison to the same period last year. The Company achieved a solid gain in revenue, taking it to the highest level in over two years. Profitability was aided by ongoing cost control measures which kept overhead costs flat when compared to the prior year.

“Although conditions in the real estate market remain challenging, we made solid progress against our operational goals. The overall economy remains strong and supportive of real estate activity despite record low levels of affordability in residential housing. Although the volume of home sales during 2024 hovered at a 30-year low, demand remained fairly steady over the course of the year. Any stabilization or decrease in mortgage interest rates along with ongoing improvement in the supply of homes available for sale should be supportive of increased activity. We continue to seek opportunities to expand our distribution network, make prudent investments in capital improvement projects, and maintain a disciplined approach to expense control while real estate activity remains subdued.”

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, executing on expense management strategies, 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; changes in government regulations and policy, including as a result of the recent change in presidential administrations and balance of power in Congress; 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 Twelve Months Ended December 31, 2024 and 2023

(in thousands, except per share amounts)

(unaudited)
 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

2024

 

2023

 

2024

 

2023

Revenues:

 

 

 

 

 

 

 

Net premiums written

$

57,813

 

$

38,365

 

$

204,264

 

$

171,158

Escrow and other title-related fees

 

4,856

 

 

4,167

 

 

17,954

 

 

17,109

Non-title services

 

4,280

 

 

4,724

 

 

17,193

 

 

19,237

Interest and dividends

 

2,833

 

 

2,518

 

 

10,657

 

 

9,055

Other investment income

 

604

 

 

837

 

 

2,600

 

 

3,752

Net investment gains

 

43

 

 

2,728

 

 

4,683

 

 

3,448

Other

 

199

 

 

344

 

 

947

 

 

991

Total Revenues

 

70,628

 

 

53,683

 

 

258,298

 

 

224,750

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

Commissions to agents

 

31,834

 

 

19,639

 

 

107,343

 

 

83,374

Provision for claims

 

1,047

 

 

865

 

 

4,530

 

 

4,762

Personnel expenses

 

17,720

 

 

18,255

 

 

72,513

 

 

76,706

Office and technology expenses

 

4,344

 

 

4,237

 

 

17,505

 

 

17,359

Other expenses

 

4,872

 

 

4,474

 

 

16,944

 

 

16,319

Total Operating Expenses

 

59,817

 

 

47,470

 

 

218,835

 

 

198,520

 

 

 

 

 

 

 

 

Income before Income Taxes

 

10,811

 

 

6,213

 

 

39,463

 

 

26,230

 

 

 

 

 

 

 

 

Provision for Income Taxes

 

2,449

 

 

377

 

 

8,390

 

 

4,544

 

 

 

 

 

 

 

 

Net Income

$

8,362

 

$

5,836

 

$

31,073

 

$

21,686

 

 

 

 

 

 

 

 

Basic Earnings per Common Share

$

4.44

 

$

3.09

 

$

16.48

 

$

11.45

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding – Basic

 

1,885

 

 

1,891

 

 

1,885

 

 

1,893

 

 

 

 

 

 

 

 

Diluted Earnings per Common Share

$

4.41

 

$

3.09

 

$

16.43

 

$

11.45

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding – Diluted

 

1,896

 

 

1,891

 

 

1,892

 

 

1,893

Investors Title Company and Subsidiaries

Consolidated Balance Sheets

As of December 31, 2024 and 2023

(in thousands)

(unaudited)
 

 

December 31,

2024

 

December 31,

2023

Assets

 

 

 

 

 

 

 

Cash and cash equivalents

$

24,654

 

$

24,031

 

 

 

 

Investments:

 

 

 

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

 

112,972

 

 

63,847

Equity securities, at fair value

 

39,893

 

 

37,212

Short-term investments

 

59,101

 

 

110,224

Other investments

 

20,578

 

 

17,385

Total investments

 

232,544

 

 

228,668

 

 

 

 

Premiums and fees receivable

 

16,054

 

 

13,338

Accrued interest and dividends

 

1,469

 

 

978

Prepaid expenses and other receivables

 

7,033

 

 

13,525

Property, net

 

27,935

 

 

23,886

Goodwill and other intangible assets, net

 

15,071

 

 

16,249

Lease assets

 

6,156

 

 

6,303

Other assets

 

2,655

 

 

2,500

Current income taxes recoverable

 

—

 

 

1,081

Total Assets

$

333,571

 

$

330,559

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Liabilities:

 

 

 

Reserve for claims

$

37,060

 

$

37,147

Accounts payable and accrued liabilities

 

34,011

 

 

31,864

Lease liabilities

 

6,356

 

 

6,449

Current income taxes payable

 

276

 

 

—

Deferred income taxes, net

 

4,095

 

 

3,546

Total liabilities

 

81,798

 

 

79,006

 

 

 

 

Stockholders’ Equity:

 

 

 

Common stock – no par value (10,000 authorized shares; 1,886 and 1,891 shares issued and outstanding as of December 31, 2024 and 2023, respectively, excluding in each period 292 shares of common stock held by the Company’s subsidiary)

 

—

 

 

—

Retained earnings

 

251,418

 

 

250,915

Accumulated other comprehensive income

 

355

 

 

638

Total stockholders’ equity

 

251,773

 

 

251,553

Total Liabilities and Stockholders’ Equity

$

333,571

 

$

330,559

Investors Title Company and Subsidiaries

Direct and Agency Net Premiums Written

For the Three and Twelve Months Ended December 31, 2024 and 2023

(in thousands)

(unaudited)
 

 

Three Months Ended December 31,

Twelve Months Ended December 31,

 

2024

%

2023

%

2024

%

2023

%

Direct

$

15,507

26.8

$

12,088

31.5

$

60,626

29.7

$

58,063

33.9

 

 

 

 

 

 

 

 

 

Agency

 

42,306

73.2

 

26,277

68.5

 

143,638

70.3

 

113,095

66.1

 

 

 

 

 

 

 

 

 

Total

$

57,813

100.0

$

38,365

100.0

$

204,264

100.0

$

171,158

100.0
 

Investors Title Company and Subsidiaries

Appendix A

Non-GAAP Measures Reconciliation

For the Three and Twelve Months Ended December 31, 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

December 31,

Twelve Months Ended

December 31,

 

2024

 

2023

2024

 

2023

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

Total revenues (GAAP)

$

70,628

 

 

$

53,683

 

$

258,298

 

 

$

224,750

 

Subtract: Net investment gains

 

(43

)

 

 

(2,728

)

 

(4,683

)

 

 

(3,448

)

Adjusted revenues (non-GAAP)

$

70,585

 

 

$

50,955

 

$

253,615

 

 

$

221,302

 

 

 

 

 

 

 

 

Income before Income Taxes

 

 

 

 

 

 

Income before income taxes (GAAP)

$

10,811

 

 

$

6,213

 

$

39,463

 

 

$

26,230

 

Subtract: Net investment gains

 

(43

)

 

 

(2,728

)

 

(4,683

)

 

 

(3,448

)

Adjusted income before income taxes (non-GAAP)

$

10,768

 

 

$

3,485

 

$

34,780

 

 

$

22,782

 

 

Elizabeth B. Lewter

Telephone: (919) 968-2200

Nasdaq Symbol: ITIC

KEYWORDS: North Carolina United States North America

INDUSTRY KEYWORDS: Legal Commercial Building & Real Estate Insurance Construction & Property Finance Banking Professional Services Other Construction & Property Residential Building & Real Estate

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