INVESTORS TITLE CO

Previous wording

The Company is a holding company that engages primarily in issuing title insurance through two subsidiaries, Investors Title Insurance Company (“ITIC”) and National Investors Title Insurance Company (“NITIC”). 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 92.0% of the Company's revenues for the six-month period ended June 30, 2026.

Current wording

The Company is a holding company that engages primarily in issuing title insurance through two subsidiaries, Investors Title Insurance Company (“ITIC”) and National Investors Title Insurance Company (“NITIC”). 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 92.2% of the Company's revenues for the nine-month period ended September 30, 2026.

Previous wording

Inflationary pressures, ongoing geopolitical and military conflicts, and changes in government regulations and policy, including as a result of policies implemented by the Trump administration, have created additional volatile market conditions and uncertainties in the global economy. These events have impacted and could continue to impact the Company in a number of ways including, but not limited to, future fluctuations in the Company's investment portfolio and potential decreases in net premiums written. The Federal Open Market Committee (“FOMC”) of the Federal Reserve has closely monitored the risks associated with these developments and responded by increasing the target federal funds rate across several meetings from 2022 through 2023, followed by a gradual reduction in 2024 and 2025. Although the federal funds rate does not directly impact mortgage interest rates, it can have a significant influence as lenders pass on the costs of rate increases to consumers. The current period of elevated mortgage interest rates has impacted the demand and pricing of real estate.

Current wording

Inflationary pressures, ongoing geopolitical and military conflicts, and changes in government regulations and policy have created additional volatile market conditions and uncertainties in the global economy. These events have impacted and could continue to impact the Company in a number of ways including, but not limited to, future fluctuations in the Company's investment portfolio and potential decreases in net premiums written. The Federal Open Market Committee (“FOMC”) of the Federal Reserve has closely monitored the risks associated with these developments and responded by increasing the target federal funds rate across several meetings from 2022 through 2023, gradually reducing it in 2024 and 2025, and then increasing it in September 2026. Although the federal funds rate does not directly impact mortgage interest rates, it can have a significant influence as lenders pass on the costs of rate increases to consumers. The current period of elevated mortgage interest rates has impacted the demand and pricing of real estate.

Previous wording

The FOMC issues disclosures on a periodic basis that include projections of the federal funds rate and expected actions. 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 lowered the federal funds rate. The most recent adjustment, in December 2025, reduced the target range to 3.5% and 3.75%. 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.

Current wording

The FOMC issues disclosures on a periodic basis that include projections of the federal funds rate and expected actions. From March 2022 through July 2023, the FOMC repeatedly increased the target range for the federal funds rate to a high of 5.25% to 5.50%. The FOMC subsequently reduced the target range over several meetings in 2024 and 2025, to 3.50% to 3.75% following the December 2025 meeting. The FOMC maintained that target range until its September 2026 meeting, when it increased the target range to 3.75% to 4.00%. Future adjustments to the FOMC’s stance of monetary policy are expected to be based on realized and expected economic developments, consistent with its objectives of achieving maximum employment and inflation at the rate of 2.0% over the longer run.

Previous wording

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 6.3% 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 administration, these projections and the impact of actual future developments on the Company could be subject to material change.

Current wording

The Mortgage Bankers Association's ("MBA") October 11, 2026 Mortgage Finance Forecast (“MBA Forecast”) projects 2026 purchase activity to increase 0.5% to $1.4 trillion and mortgage refinance activity to increase 25.4% to $686 billion, resulting in a net increase in total mortgage originations of 7.5% to $2.1 trillion, all from 2025 levels. In 2025, purchase activity accounted for 72.0% of all mortgage originations and is projected in the MBA Forecast to represent 67.3% 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 6.4% and 6.7% for the nine-month periods ended September 30, 2026 and 2025, respectively. The MBA Forecast projects that 30-year fixed mortgage interest rates will rise to 7.3% by the end of 2026 before gradually declining to 6.9% by 2029. 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, these projections and the impact of actual future developments on the Company could be subject to material change.

Previous wording

The preparation of the Company's unaudited Consolidated Financial Statements requires management to make estimates and judgments that affect the reported amounts of certain assets, liabilities, revenues, expenses and related disclosures regarding contingencies and commitments. Actual results could differ from these estimates. 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.

Current wording

The preparation of the Company's unaudited Consolidated Financial Statements requires management to make estimates and judgments that affect the reported amounts of certain assets, liabilities, revenues, expenses and related disclosures regarding contingencies and commitments. Actual results could differ from these estimates. During the nine-month period ended September 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.

Previous wording

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

Current wording

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

Previous wording

Insurance revenues include net premiums written and escrow and other title-related income that includes escrow fees, commissions and settlement fees. Non-title services revenue, investment-related revenues and other revenues are discussed separately below.

Current wording

Insurance revenues include net premiums written and escrow and other title-related fees, which consists of escrow fees, commissions and settlement fees. Non-title services revenue, investment-related revenues and other revenues are discussed separately below.

Previous wording

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- and six-month periods ended June 30, 2026 and 2025:

Current wording

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- and nine-month periods ended September 30, 2026 and 2025:

Previous wording

Direct Net Premiums – The Company's direct business consists of operations at the home office, branch offices, and wholly owned title insurance agencies. 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 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.

Current wording

Direct Net Premiums – The Company's direct business consists of operations at the home office, branch offices, and wholly owned title insurance agencies. 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 20.1% and 17.3% for the three- and nine-month periods ended September 30, 2026, respectively, compared with the same prior year periods. The increases for the three- and nine-month periods ended September 30, 2026 were primarily due to higher real estate transaction volumes and contributions from ongoing expansion initiatives.

Previous wording

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. The agent retains a majority of the premium as a commission and remits the net amount to the Company. Title insurance commissions earned by the Company’s agents are recognized as expenses concurrently with premium recognition. 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.

Current wording

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. The agent retains a majority of the premium as a commission and remits the net amount to the Company. Title insurance commissions earned by the Company’s agents are recognized as expenses concurrently with premium recognition. Agency net premiums written increased 21.3% and 19.3% for the three- and nine-month periods ended September 30, 2026, respectively, compared with the same prior year periods. The increases for the three- and nine-month periods ended September 30, 2026 were primarily due to higher real estate transaction volumes and contributions from ongoing expansion initiatives.

Previous wording

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:

Current wording

Following is a schedule of net premiums written for the three- and nine-month periods ended September 30, 2026 and 2025 in select states in which the Company's two insurance subsidiaries, ITIC and NITIC, currently underwrite title insurance:

Previous wording

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 $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.

Current wording

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 $6.0 million and $17.0 million for the three- and nine-month periods ended September 30, 2026, respectively, compared with $4.8 million and $14.4 million for the same prior year periods. The increases for the three- and nine-month periods ended September 30, 2026 were primarily due to higher real estate transaction volumes and contributions from ongoing expansion initiatives.

Previous wording

Revenue from non-title services includes trust services, agency management services and exchange services income. 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.

Current wording

Revenue from non-title services includes trust services, agency management services, and exchange services income. Non-title service revenues were $5.0 million and $14.4 million for the three- and nine-month periods ended September 30, 2026, respectively, compared with $6.3 million and $16.3 million for the same prior year periods. The decreases for the three- and nine-month periods ended September 30, 2026 were primarily due to lower like-kind exchange activity.

Previous wording

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

Current wording

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

Previous wording

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.

Current wording

Interest and dividends were $2.6 million and $7.1 million for the three- and nine-month periods ended September 30, 2026, respectively, compared with $2.4 million and $7.1 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.

Previous wording

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.

Current wording

Other investment income was $1.6 million and $2.9 million for the three- and nine-month periods ended September 30, 2026, respectively, compared with $985 thousand and $2.0 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.

Previous wording

Net Realized Investment Gains and Losses – Dispositions of equity securities at a realized gain or loss reflect such factors as industry sector allocation decisions, ongoing assessments of issuers’ business prospects and tax planning considerations. Additionally, the amounts included in net realized investment gains or losses are affected by assessments of securities’ valuation for impairment. 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.

Current wording

Net Realized Investment Losses and Gains – Dispositions of equity securities at a realized gain or loss reflect such factors as industry sector allocation decisions, ongoing assessments of issuers’ business prospects and tax planning considerations. Additionally, the amounts included in net realized investment gains or losses are affected by assessments of securities’ valuation for impairment. 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.

Previous wording

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.

Current wording

The net realized investment (losses) gains were $(51) thousand and $1.6 million for the three- and nine-month periods ended September 30, 2026, respectively, compared with $857 thousand and $4.0 million for the same prior year periods. The Company recorded impairment charges of $1.3 million and $1.7 million on fixed maturity securities and other investments for the three- and nine-month periods ended September 30, 2026, respectively, compared with $50 thousand and $469 thousand on other investments for the same prior year periods. Management believes unrealized losses on the remaining fixed maturity securities at September 30, 2026 are temporary in nature.

Previous wording

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.

Current wording

Changes in the Estimated Fair Value of Equity Security Investments – Changes in the estimated fair value of equity security investments were $(1.6) million and $2.1 million for the three- and nine-month periods ended September 30, 2026, respectively, compared with $1.2 million and $(1.0) 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.

Previous wording

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

Current wording

Other revenues primarily include miscellaneous income and gains and losses on the disposal of fixed assets and real estate. Other revenues were $239 thousand and $575 thousand for the three- and nine-month periods ended September 30, 2026, respectively, compared with $106 thousand and $3.2 million for the same prior year periods. The decrease for the nine-month period ended September 30, 2026 was primarily due to non-recurring gains from the prior year.

Previous wording

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 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.

Current wording

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 21.7% and 15.2% for the three- and nine-month periods ended September 30, 2026, respectively, compared with the same prior year periods. The increases for the three- and nine-month periods ended September 30, 2026 were primarily due to increases in commissions to agents, the provision for claims, and personnel expenses.

Previous wording

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; therefore, the individual segment amounts will not agree to Note 4 to the unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Current wording

Following is a summary of the Company's operating expenses for the three- and nine-month periods ended September 30, 2026 and 2025. Inter-segment eliminations have been netted; therefore, the individual segment amounts will not agree to Note 4 to the unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Previous wording

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.

Current wording

On a combined basis, the after-tax profit margins were 11.5% and 13.0% for the three- and nine-month periods ended September 30, 2026, respectively, compared with 16.7% and 13.6% for the same prior year periods. The decreases for the three- and nine-month periods ended September 30, 2026 were primarily attributable to increases in operating expenses, particularly commissions to agents, the provision for claims, and personnel expenses, which outpaced the growth in revenues. The Company continually strives to enhance its competitive strengths and market position, including ongoing initiatives to manage its operating expenses.

Previous wording

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 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.

Current wording

Personnel Expenses– Personnel expenses include base salaries, benefits and payroll taxes, bonuses paid to employees and contract labor expenses. Personnel expenses were $19.2 million and $57.3 million for the three- and nine-month periods ended September 30, 2026, respectively, compared with $17.4 million and $53.2 million for the same prior year periods. The increases in personnel expenses for the three- and nine-month periods ended September 30, 2026 were primarily a result of geographic expansion and merit increases. On a consolidated basis, personnel expenses as a percentage of total revenues were 23.5% and 24.7% for the three- and nine-month periods ended September 30, 2026, respectively, compared with 23.9% and 26.2% for the same prior year periods.

Previous wording

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 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.

Current wording

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 were $4.7 million and $13.9 million for the three- and nine-month periods ended September 30, 2026, respectively, compared with $4.2 million and $13.0 million for the same prior year periods. The increases for the three- and nine-month periods ended September 30, 2026 were primarily due to increases in software expenses.

Previous wording

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 $4.9 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.

Current wording

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 $5.5 million and $15.3 million for the three- and nine-month periods ended September 30, 2026, respectively, compared with $4.9 million and $14.3 million for the same prior year periods. The increases for the three- and nine-month periods ended September 30, 2026 were primarily due to increases in expenses associated with higher title insurance revenues, partially offset by declines in professional fees.

Previous wording

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 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.

Current wording

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 21.9% and 18.8% for the three- and nine-month periods ended September 30, 2026, respectively, compared with the same prior year periods. The changes in commission expense were commensurate with the growth in agency premiums. Commission expense as a percentage of net premiums written by agents was 75.8% and 75.1% for the three- and nine-month periods ended September 30, 2026, respectively, compared with 75.4% for both prior year periods. Commission rates vary by market due to local practice, competition and state regulations.

Previous wording

Provision for Claims– The provision for claims increased 33.8% and 35.5% for thethree- 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 thethree- 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.

Current wording

Provision for Claims– The provision for claims increased 242.8% and 104.8% for thethree- and nine-month periods ended September 30, 2026, respectively, compared with the same prior year periods. The provision for claims as a percentage of net premiums written was 6.1% and 4.0% for thethree- and nine-month periods ended September 30, 2026, respectively, compared with 2.1% and 2.3% for the same prior year periods. The increases in the provision for claims for the three- and nine-month periods ended September 30, 2026 were primarily due to higher claims experience.

Previous wording

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 $2.2 million and $1.4 million for the six-month periods ended June 30, 2026 and 2025, respectively.

Current wording

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 $4.4 million and $2.5 million for the nine-month periods ended September 30, 2026 and 2025, respectively.

Previous wording

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. Because of the uncertainty of future claims, changes in economic conditions, and the fact that claims may not materialize for several years, reserve estimates are subject to variability.

Current wording

At September 30, 2026, the total reserve for claims was $41.1 million. Of that total, approximately $3.4 million was reserved for specific claims, and approximately $37.7 million was reserved for claims for which the Company had no notice. Because of the uncertainty of future claims, changes in economic conditions, and the fact that claims may not materialize for several years, reserve estimates are subject to variability.

Previous wording

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 effect of tax credits, tax-exempt income and state taxes.

Current wording

The provision for income taxes was $2.0 million and $8.4 million for the three- and nine-month periods ended September 30, 2026, respectively, compared with $2.9 million and $7.3 million for the same prior year periods. Income tax expense, including federal and state taxes, as a percentage of income before income taxes was 17.3% and 21.9% for the three- and nine-month periods ended September 30, 2026, respectively, compared with 19.1% and 20.8% 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 effect of tax credits, tax-exempt income and state taxes.

Previous wording

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.

Current wording

Cash Flows– Net cash flows provided by operating activities were $24.4 million and $25.9 million for the nine-month periods ended September 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.

Previous wording

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

Current wording

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 used in investing activities and financing activities for the nine-month periods ended September 30, 2026 and 2025.

Previous wording

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 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.

Current wording

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 September 30, 2026, the Company held cash and cash equivalents of $23.9 million, short-term investments of $53.0 million, available-for-sale fixed maturity securities of $138.5 million, and equity securities of $51.9 million. The net effect of all activities on total cash and cash equivalents was an increase of $3.0 million in 2026.

Previous wording

Due to the Company’s historical ability to consistently generate positive cash flows from its consolidated operations and investment income, management believes that funds generated from operations will enable the Company to adequately meet its current operating needs for the foreseeable future. However, given inflationary pressures and geopolitical and military tensions and conflicts, there can be no assurance that future experience will be similar to historical experience, since it is influenced by such factors as the interest rate environment, real estate activity, the Company’s claims-paying ability and its financial strength ratings. In addition to operational and investment considerations, taking advantage of opportunistic external growth opportunities may necessitate obtaining additional capital resources. The Company is carefully monitoring the U.S. 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.

Current wording

Due to the Company’s historical ability to consistently generate positive cash flows from its consolidated operations and investment income, management believes that funds generated from operations will enable the Company to adequately meet its current operating needs for the foreseeable future. However, given inflationary pressures and geopolitical and military conflicts, there can be no assurance that future experience will be similar to historical experience, since it is influenced by such factors as the interest rate environment, real estate activity, the Company’s claims-paying ability, and its financial strength ratings. In addition to operational and investment considerations, taking advantage of opportunistic external growth opportunities may necessitate obtaining additional capital resources. The Company is carefully monitoring the U.S. political environment, including the impacts of federal government shutdowns, inflation, geopolitical and military 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.

Previous wording

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 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.

Current wording

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 did not purchase shares in the nine-month periods ended September 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.

Previous wording

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.

Current wording

Capital Expenditures– Capital expenditures were approximately $4.8 million for the nine-month period ended September 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.

Previous wording

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. Events such as fraud, defalcation, and multiple property title defects can substantially and unexpectedly cause increases in both the amount and timing of estimated title insurance loss payments and loss cost trends whereby increases or decreases in inflationary factors (including the value of real estate) will influence the ultimate amount of title insurance loss payments and could increase total obligations and influence claim payout patterns. Due to the length of time over which claim payments are made and regularly occurring changes in underlying economic and market conditions, claim estimates are subject to variability and future payments could increase or decrease from these estimated amounts in the future.

Current wording

Contractual Obligations -As of September 30, 2026, the Company had a claims reserve totaling $41.1 million. The amounts and timing of these obligations are estimated and not set contractually. Events such as fraud, defalcation, and multiple property title defects can substantially and unexpectedly cause increases in both the amount and timing of estimated title insurance loss payments and loss cost trends whereby increases or decreases in inflationary factors (including the value of real estate) will influence the ultimate amount of title insurance loss payments and could increase total obligations and influence claim payout patterns. Due to the length of time over which claim payments are made and regularly occurring changes in underlying economic and market conditions, claim estimates are subject to variability and future payments could increase or decrease from these estimated amounts in the future.

Previous wording

The Company enters into lease agreements that are primarily used for office space. These leases are accounted for as operating leases, with lease expense recognized on a straight-line basis over the term of the lease. The Company occasionally assumes equipment lease agreements through business acquisitions. These leases are accounted for as finance leases. Included in a portion of the Company's current leases is an option to extend or cancel the lease term, and the exercise of such an option is solely at the Company's discretion. The total of undiscounted future minimum lease payments under operating leases that have initial or remaining noncancelable lease terms in excess of one year after 2026 is $8.7 million, which includes lease payments related to options to extend or cancel the lease term if the Company determined at the date of adoption that the lease was expected to be renewed or extended. Information about leases can be found in Note 12 to the unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Current wording

The Company enters into lease agreements that are primarily used for office space. These leases are accounted for as operating leases, with lease expense recognized on a straight-line basis over the term of the lease. The Company occasionally assumes equipment lease agreements through business acquisitions. These leases are accounted for as finance leases. Included in a portion of the Company's current leases is an option to extend or cancel the lease term, and the exercise of such an option is solely at the Company's discretion. The total of undiscounted future minimum lease payments under operating leases that have initial or remaining noncancelable lease terms in excess of one year after 2026 is $9.6 million, which includes lease payments related to options to extend or cancel the lease term if the Company determined at the date of adoption that the lease was expected to be renewed or extended. Information about leases can be found in Note 12 to the unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Previous wording

In addition, in administering tax-deferred like-kind exchanges pursuant to § 1031 of the Internal Revenue Code, ITEC serves as a qualified intermediary for exchanges, holding the net sales proceeds from relinquished property to be used for purchase of replacement property. 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 $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. Exchange deposits are not considered assets of the Company and, therefore, are excluded from the accompanying unaudited Consolidated Balance Sheets; however, the Company remains contingently liable for the disposition of the transfers of property, disbursements of proceeds and the return on the proceeds at the agreed upon rate. Exchange services revenue includes earnings on these deposits; therefore, investment income is shown as non-title services rather than investment income. These like-kind exchange funds are primarily invested in money market funds and other short-term investments.

Current wording

In addition, in administering tax-deferred like-kind exchanges pursuant to § 1031 of the Internal Revenue Code, ITEC serves as a qualified intermediary for exchanges, holding the net sales proceeds from relinquished property to be used for purchase of replacement property. 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 $240.9 million and $269.3 million as of September 30, 2026 and December 31, 2025, respectively. These exchange deposits are held at third-party financial institutions. Exchange deposits are not considered assets of the Company and, therefore, are excluded from the accompanying unaudited Consolidated Balance Sheets; however, the Company remains contingently liable for the disposition of the transfers of property, disbursements of proceeds, and the return on the proceeds at the agreed upon rate. Exchange services revenue includes earnings on these deposits; therefore, investment income is shown as non-title services rather than investment income. These like-kind exchange funds are primarily invested in money market funds and other short-term investments.