Investors Title Company Announces Fourth Quarter and Fiscal Year 2024 Results

Rhea-AI Summary

Investors Title Company (ITIC) reported strong Q4 2024 results with net income of $8.4 million ($4.41 per diluted share), up from $5.8 million ($3.09 per diluted share) in Q4 2023. Revenues increased 31.6% to $70.6 million, driven by higher net premiums written and escrow fees.

For the full year 2024, net income rose to $31.1 million ($16.43 per diluted share) from $21.7 million in 2023. Annual revenues grew 14.9% to $258.3 million, while operating expenses increased 10.2% to $218.8 million.

The company's performance improved despite challenging real estate market conditions, with home sales at a 30-year low. Growth was supported by ongoing expansion initiatives, lower average mortgage interest rates, and home price appreciation. Operating expenses were well-controlled, with higher agent commissions offset by reduced personnel costs from lower staffing levels.

Positive

• Q4 net income increased 44.8% YoY to $8.4 million
• Q4 revenues grew 31.6% to $70.6 million
• Full-year net income rose 43.3% to $31.1 million
• Annual revenues increased 14.9% to $258.3 million
• Effective cost control kept overhead expenses flat YoY

Negative

• Home sales volume remained at 30-year low during 2024
• Decrease in net investment gains due to reduced sales activity
• Record low affordability levels in residential housing market

Insights

Financial Analyst

The Q4 2024 results reveal a company executing effectively despite challenging real estate market conditions. The 31.6% revenue growth significantly outpaced the 26.0% increase in operating expenses, demonstrating strong operational leverage and effective cost management. A notable shift in business mix occurred, with agency premiums increasing to 73.2% of total premiums in Q4 2024 from 68.5% in Q4 2023, indicating successful expansion of the company's distribution network.

The balance sheet remains robust with $232.5 million in total investments and minimal debt, providing ample flexibility for strategic initiatives. The company's disciplined approach to expense management is particularly evident in personnel costs, which decreased despite revenue growth, suggesting improved operational efficiency and scalability of the business model.

Despite residential housing transactions hovering at 30-year lows, ITIC's ability to grow revenues and expand margins demonstrates effective market share capture and pricing power. The increase in average home prices has provided a natural hedge against transaction volume declines. The company's focus on expanding its distribution network while maintaining cost discipline positions it well for potential market recovery, particularly if mortgage rates stabilize or decrease as anticipated.

Key performance indicators show healthy fundamentals: the loss ratio remains well-controlled with claims provisions at $4.5 million for the year, while investment portfolio diversification provides stability with $113 million in fixed maturity securities and $39.9 million in equity securities. The 43.3% increase in full-year net income, achieved during a challenging real estate market, underscores the effectiveness of management's strategic initiatives and operational execution.

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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250212347181/en/

Elizabeth B. Lewter

Telephone: (919) 968-2200

Nasdaq Symbol: ITIC

Source: Investors Title Company

FAQ

What were ITIC's Q4 2024 earnings per share?

ITIC reported earnings of $4.41 per diluted share in Q4 2024, compared to $3.09 per diluted share in Q4 2023.

How much did ITIC's revenue grow in Q4 2024?

ITIC's revenue grew 31.6% to $70.6 million in Q4 2024, compared to $53.7 million in Q4 2023.

What was ITIC's full-year 2024 net income?

ITIC's full-year 2024 net income was $31.1 million ($16.43 per diluted share), up from $21.7 million in 2023.

How did ITIC's operating expenses change in 2024?

ITIC's operating expenses increased 10.2% to $218.8 million in 2024, primarily due to higher agent commissions, while overhead costs remained flat.

What factors drove ITIC's revenue growth in Q4 2024?

ITIC's revenue growth was driven by increases in net premiums written and escrow fees, influenced by expansion initiatives, lower mortgage rates, and home price appreciation.