INVESTORS TITLE COMPANY ANNOUNCES

FOURTH QUARTER AND FISCAL YEAR 2021 RESULTS

February 14, 2022

Telephone: (919) 968-2200

        Nasdaq Symbol: ITIC

FOR IMMEDIATE RELEASE:

Chapel Hill, NC – Investors Title Company today announced results for the fourth quarter and year ended December 31, 2021.  The Company set all-time quarterly and annual records for total revenues and net premiums written, in addition to setting an all-time annual record for net income.

For the quarter, net income increased 13.7% to $18.9 million, or $9.94 per diluted share, versus $16.6 million, or $8.77 per diluted share, in the prior year period.  For the year, net income increased 70.0% to $67.0 million, or $35.28 per diluted share, versus $39.4 million, or $20.80 per diluted share, in the prior year.

Revenues for the quarter increased 18.0% to $91.0 million, compared to $77.1 million in the prior year period.  Net premiums written increased 16.8% to $72.5 million, driven mainly by higher average home prices and continued low mortgage interest rates.  Escrow and other title-related fees increased 53.0%, primarily due to increases in commission income and title ancillary services.  Revenues from non-title services increased 23.4%, mainly due to increases in income from like-kind exchanges, trust management fees and agency income.  Other investment income increased $823,000 due to earnings from partnership investments.  Changes in the estimated fair value of equity security investments resulted in a benefit to revenues of $7.7 million, a slight decrease compared with the prior year quarter, as market values continued to increase.

Operating expenses increased 20.5%, mainly due to a 20.6% increase in commissions to agents commensurate with the increase in agent premium volume.  Personnel expenses were 9.0% higher than the prior year due primarily to staffing additions in support of strategic growth initiatives and volume increases.  Higher premium volumes, increases in travel-related expenses and ongoing technology initiatives drove the increases in office and technology expenses and other operating expenses.  Slightly offsetting these increases was a relatively low level of claims activity experienced on policies written in recent years.

Income before income taxes increased 11.6% to $23.9 million for the current quarter versus $21.4 million in the prior year period.  Excluding the impact of changes in the estimated fair value of equity security investments, adjusted income before income taxes (non-GAAP) increased 18.9% to $16.2 million versus $13.6 million for the prior year period (see Appendix A for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure).

For the year, revenues increased 39.4% to $329.5 million compared with $236.4 million for the prior year.  Aside from changes in the estimated fair value of equity security investments and other income, overall results for the year were shaped predominantly by the same factors that affected the fourth quarter.  Changes in the estimated fair value of equity security investments increased $10.0 million compared with the prior year, as U.S. stock markets recorded a third straight year of growth in 2021.  Other income increased $4.1 million mainly due to a gain on the sale of property.   Income before income taxes increased 71.0% to $84.9 million compared with $49.7 million in the prior year.  Excluding the impact of changes in the estimated fair value of investments in equity securities, adjusted income before income taxes (non-GAAP) increased 56.4% to $70.0 million versus $44.8 million for the prior year (see Appendix A for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure).

Chairman J. Allen Fine commented, “We are pleased to report another year of exceptionally strong performance.  For both the quarter and the year, the Company set all-time records for revenues and premiums, in addition to an annual record for earnings.  As the country grapples with the ongoing pandemic for the second year, we continued to see strong demand for housing as well as record growth in real estate values in our operating markets during 2021.  Although refinance activity has slowed recently in light of an uptick in mortgage interest rates relative to most of 2021, the level of refinance activity actually surpassed 2020’s record activity levels.  As we turn our focus to 2022, we will remain focused on enhancing our competitive strengths and profitably expanding our market presence.”

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.

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, projections regarding U.S. recovery from the COVID-19 pandemic, 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, positive 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 severity and duration of the COVID-19 pandemic (including any of its variants) and its effects (and the effects of measures undertaken to combat it) on the economy and the Company’s business; 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; changes resulting from President Biden’s administration and Congress; 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, 2020 as filed with the Securities and Exchange Commission, and in subsequent filings.

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		Three Months Ended December 31,								Twelve Months Ended December 31,
		2021				2020				2021				2020
Revenues:
Net premiums written		$	72,536			$	62,107			$	273,885			$	205,418
Escrow and other title-related fees			3,530				2,307				13,678				8,321
Non-title services			2,735				2,217				9,667				8,693
Interest and dividends			966				1,051				3,773				4,393
Other investment income			2,310				1,487				6,920				3,723
Net realized investment gains			1,098				6				1,869				333
Changes in the estimated fair value of equity security investments			7,668				7,771				14,934				4,904
Other			200				180				4,772				623
Total Revenues			91,043				77,126				329,498				236,408
Operating Expenses:
Commissions to agents			40,357				33,463				142,815				106,807
Provision for claims			666				752				5,686				5,204
Personnel expenses			16,669				15,297				64,193				51,929
Office and technology expenses			3,931				2,623				13,059				9,951
Other expenses			5,528				3,580				18,813				12,856
Total Operating Expenses			67,151				55,715				244,566				186,747
Income before Income Taxes			23,892				21,411				84,932				49,661
Provision for Income Taxes			4,980				4,776				17,912				10,241
Net Income		$	18,912			$	16,635			$	67,020			$	39,420
Basic Earnings per Common Share		$	9.98			$	8.79			$	35.38			$	20.84
Weighted Average Shares Outstanding – Basic			1,895				1,892				1,894				1,892
Diluted Earnings per Common Share		$	9.94			$	8.77			$	35.28			$	20.80
Weighted Average Shares Outstanding – Diluted			1,903				1,897				1,900				1,896