Shares of Investors Title Company (ITIC Quick QuoteITIC - Free Report) have gained 1.4% since the company reported its earnings for the quarter ended March 31, 2025. This compares to the S&P 500 index’s 4.5% growth over the same time frame. Over the past month, the stock has gained 5.9% compared with the S&P 500’s 8.8% growth, indicating a modestly positive but relatively underwhelming performance in the context of broader market gains.

For the first quarter of 2025, Investors Title reported net income of $1.67 per share, down from $2.40 per share in the same period last year, a 30.4% decrease in earnings per share. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The company’s revenues of $56.6 million denoted an increase of 5.8% from $53.5 million in the year-ago quarter. The revenue growth was driven primarily by a 15.3% increase in net premiums written, reflecting stronger activity in the company’s key markets. 

However, net income declined to $3.2 million from $4.5 million, in the same period last year. The drop in profitability was attributed to higher operating expenses and a $3.6 million swing in investment gains, as the company posted a $1.2 million net investment loss this quarter compared to a $2.4 million gain last year.

Other Key Business Metrics

Net premiums written totaled $46.3 million, up from $40.2 million in the prior-year quarter. Direct premiums comprised $13.5 million, while agency premiums made up $32.8 million, accounting for nearly 71% of the total. Title-related fees and non-title services contributed $3.9 million and $4.6 million, respectively, both reflecting modest year-over-year increases. Interest and dividend income declined to $2.3 million from $2.5 million, while other investment income rose to $0.4 million from $0.1 million. The shift in investment-related income largely mirrored broader market fluctuations during the period.

Operating expenses increased 10.2% to $52.5 million, up from $47.7 million a year earlier. Agent commissions rose significantly, climbing from $19.9 million to $24.9 million due to growth in agent-driven business. This was partially offset by a decline in the provision for claims, which dropped to $0.3 million from $0.9 million, benefiting from favorable development on known claims. Personnel costs remained flat, while other expense categories saw only slight increases, aided by ongoing cost-control initiatives.

Management Commentary

Chairman J. Allen Fine highlighted the positive momentum in premium growth, crediting modest market improvements and ongoing efforts to expand market presence. He acknowledged that while expense growth was mainly tied to volume-related commissions, fixed overhead costs were lower year-over-year due to successful cost-saving strategies. The management’s narrative reflects a cautious optimism, balancing improved top-line performance with prudent cost control.

Factors Influencing the Headline Numbers

The main driver of revenue growth was the double-digit increase in net premiums written, signaling a healthy demand environment in core real estate markets. However, investment performance notably reversed course compared to last year, resulting in a $1.2 million net loss that significantly affected bottom-line profitability. This swing aligns with recent volatility in equity markets, which impacted the fair value of the company’s investment portfolio.

Adjusted income before income taxes, which strips out the effect of net investment losses, provides a more favorable picture. This non-GAAP figure rose to $5.2 million from $3.4 million in the year-ago period, a 53% increase. Adjusted revenues, similarly recalibrated to exclude investment losses, were $57.7 million compared with $51 million last year. These metrics suggest that core business performance improved meaningfully, even as GAAP results were weighed down by market-driven investment losses.