Investors Title's Q4 Earnings Slump Y/Y Due to Lower Premium

Shares of Investors Title Company ITIC have declined 17.5% since the company reported its earnings for the quarter ended Dec. 31, 2025, underperforming the S&P 500 index’s 1.1% change over the same time frame. Over the past month, the stock has declined 15.2% compared with the S&P 500’s 1.1% decline, reflecting a sharper pullback relative to the broader market.

For the fourth quarter, Investors Title reported net income of $3.97 per share compared with $4.41 per share in the prior-year period.

Total revenues declined 1.6% year over year to $69.5 million from $70.6 million.

Operating expenses edged up 0.2% to $59.9 million, resulting in income before income taxes of $9.6 million, down from $10.8 million a year earlier.

The company reported net income of $7.5 million compared with $8.4 million in the prior-year period.

Full-Year Update

For the year ended Dec. 31, 2025, net income increased to $35.2 million, or $18.57 per share compared with $31.1 million, or $16.43 per share, in 2024. Revenues rose 5.6% to $272.8 million from $258.3 million, while operating expenses climbed 4.3% to $228.2 million. 

Income before income taxes improved to $44.5 million from $39.5 million in the prior year.

Other Key Business Metrics

Net premiums written, the company’s largest revenue component, fell to $55.4 million in the fourth quarter from $57.8 million a year earlier. Direct premiums accounted for $16.2 million, or 29.2% of total net premiums written compared with $15.5 million or 26.8% in the prior-year quarter. Agency premiums declined to $39.2 million from $42.3 million, reflecting lower agent-originated volume.

Escrow and other title-related fees increased modestly to $4.9 million, while non-title services revenue rose to $5.3 million from $4.3 million, supported by growth in like-kind exchange and title agency management services.

On the expense side, commissions to agents declined to $29.5 million from $31.8 million, broadly in line with lower agency premium volume. Personnel expenses increased to $19 million from $17.7 million, and other expenses rose to $6.3 million from $4.9 million, contributing to the slight uptick in overall operating costs.

Management Commentary

Chairman J. Allen Fine said the company delivered its highest level of profits since 2021, citing increased title insurance volumes in most key markets and modest improvements in refinance activity driven by slightly lower mortgage rates. He also pointed to ongoing efforts to expand market presence and grow market share, which contributed to revenue gains for the year.

Fine noted that non-title businesses performed well, benefiting from higher like-kind exchange activity and the addition of recurring management services revenue streams. He added that investments aimed at strengthening operational efficiency, coupled with disciplined management of personnel and office expenses, are expected to enhance long-term profitability.

Factors Influencing the Quarter

The fourth-quarter revenue decline was primarily attributed to lower net premiums written, despite higher overall activity levels. The company indicated that market-driven factors had favorably impacted the prior-year accrual for unreported premiums, creating a tougher comparison.

Non-title services revenue growth partially offset the drop in title premiums. Operating expenses rose slightly, mainly due to higher personnel costs tied to increased incentive compensation and contract services, along with professional services expenses related to agency acquisitions and other projects. Lower agent commissions mitigated some of this pressure.

For the full year, revenue growth was driven by higher net premiums written, increased escrow and title-related fees, stronger non-title services, a gain on assets contributed to a joint venture in the second quarter of 2025 and variations in investment earnings.