Investors Title pany(ITIC) - 2025 Q1 - Quarterly Report

Revenue and Premiums - Total revenues for the title insurance segment accounted for 90.4% of the Company's revenues for the three-month period ended March 31, 2025[84]. - Net premiums written increased 15.3% for the three-month period ended March 31, 2025, reaching $46.3 million compared to $40.2 million for the same prior year period[107]. - Agency net premiums written increased 22.2% for the three-month period ended March 31, 2025, primarily due to higher activity levels across key markets[110]. - Total revenues for the three-month period ended March 31, 2025, were $56.6 million, compared to $53.5 million for the same period in 2024[104]. - Net premiums written for the three-month period ended March 31, 2025, increased to $46,345 thousand, up from $40,180 thousand in the same period of 2024, representing a growth of 15.4%[111]. - Revenue from non-title services increased to $4.6 million for the three-month period ended March 31, 2025, up from $4.3 million in the same prior year period, reflecting a growth of 7.0%[113]. Income and Expenses - Net income for the three-month period ended March 31, 2025, was $3.2 million, down from $4.5 million in the same prior year period[104]. - The Company's operating expenses for the three-month period ended March 31, 2025, totaled $52.5 million, compared to $47.7 million for the same period in 2024[104]. - Operating expenses increased by 10.2% for the three-month period ended March 31, 2025, totaling $52,512 thousand, compared to $47,662 thousand in the same prior year period[128]. - Interest and dividends income decreased to $2.3 million for the three-month period ended March 31, 2025, from $2.5 million in the same prior year period[104]. - Interest and dividends decreased to $2.3 million for the three-month period ended March 31, 2025, down from $2.5 million in the same prior year period, a decline of 8.0%[118]. Claims and Reserves - The provision for claims decreased by 64.5% for the three-month period ended March 31, 2025, with claims totaling $386 thousand compared to $741 thousand in the same prior year period[135]. - The total reserve for claims as of March 31, 2025, was $37.0 million, with approximately $2.5 million reserved for specific claims[137]. - The Company had a claims reserve totaling $37.0 million as of March 31, 2025, with potential variability in future payments due to economic conditions[157]. Cash and Investments - Net cash used in operating activities was $(75) thousand for Q1 2025, compared to $1.4 million for Q1 2024[146]. - As of March 31, 2025, the Company held cash and cash equivalents of $27.6 million, short-term investments of $54.1 million, and available-for-sale fixed maturity securities of $118.3 million[148]. - The net effect of all activities on total cash and cash equivalents was an increase of $2.9 million in 2025[148]. - Like-kind exchange deposits held by the Company totaled approximately $362.1 million as of March 31, 2025, up from $323.5 million at the end of 2024[162]. Strategic Initiatives - The company is evaluating nonorganic growth opportunities, including mergers and acquisitions, as part of its ongoing business strategy[142]. - The Company anticipates making further stock repurchases under its plan, having purchased no shares in Q1 2025 and 6,763 shares in Q1 2024[155]. - The Company’s capital resources are influenced by state regulations and the need to maintain superior financial ratings[149]. - The Company’s title insurance subsidiaries met the minimum capital, surplus, and reserve requirements for their respective states as of March 31, 2025[151]. Market Conditions - The average 30-year fixed mortgage interest rates were 6.8% for the three-month period ended March 31, 2025, compared to 6.7% for the same period in 2024[101]. - The Mortgage Bankers Association projects a 16.7% net increase in total mortgage originations to $2,076 billion in 2025 from 2024 levels[101]. - The Company's profitability is influenced by the overall level of residential and commercial real estate activity, which is cyclical and affected by various economic factors[91]. Financial Instruments and Risk Management - The Company does not currently utilize derivative financial instruments for hedging purposes, actively monitoring market risks related to interest rates and equity values[168]. - Other investment income rose significantly to $410 thousand for the three-month period ended March 31, 2025, compared to $111 thousand for the same prior year period, marking an increase of 269.4%[120]. - The effective income tax rate for the three-month period ended March 31, 2025, was 21.8%, slightly down from 21.9% in the same prior year period[139]. - Capital expenditures for Q1 2025 were approximately $1.3 million, with plans for technology and system development initiatives funded by cash flows from operations[156].