ITIC's Q4 Earnings Rise Y/Y in Q4 on Lower Rates, Stock Up 2%

Shares of Investors Title Company ITIC have gained 2.3% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 index’s 1% growth over the same time frame. Over the past month, the stock has declined 0.2% against the S&P 500’s 1.8% growth.See the Zacks Earnings Calendar to stay ahead of market-making news.For the fourth quarter of 2024, Investors Title reported net income of $4.41 per share, reflecting an increase from $3.09 per share in the prior-year quarter. The company’s total revenues surged 31.6% year over year to $70.6 million, compared to $53.7 million in the fourth quarter of 2023. The growth was primarily driven by increased net premiums written and higher escrow and title-related fees, which benefited from the company’s expansion initiatives, lower mortgage interest rates, and rising home prices.Net income of $8.4 million reflected an increase from $5.8 million in the prior-year quarter.On the expense side, operating costs rose 26% year over year to $59.8 million, primarily due to higher agent commissions linked to the increased premium volume. However, personnel expenses declined, reflecting lower staffing levels. Income before income taxes increased to $10.8 million from $6.2 million in the year-ago quarter. Excluding investment gains, adjusted pre-tax income rose significantly to $10.8 million from $3.5 million in the prior-year period.Investors Title Company Price, Consensus and EPS Surprise Investors Title Company price-consensus-eps-surprise-chart | Investors Title Company QuoteKey Business MetricsNet premiums written reached $57.8 million in the fourth quarter, marking a 50.7% year-over-year increase from $38.4 million in the same period of 2023. Escrow and title-related fees also climbed to $4.9 million, up 16.5% from the prior-year quarter. However, non-title service revenue declined by 9.4% to $4.3 million.Investment income continued to be a minor but stable contributor, with interest and dividend income rising 12.5% to $2.8 million. The company recorded a modest $0.04 million in net investment gains during the quarter, a steep decline from $2.7 million in the fourth quarter of 2023, as changes in fair value of equity securities and lower sales activity impacted the results.Total operating expenses were driven by a 62.1% increase in commissions to agents, which rose to $31.8 million from $19.6 million in the prior-year period. Provisions for claims edged up to $1.1 million from $0.9 million, while office and technology expenses remained at $4.3 million.Full Year UpdateFor 2024, revenues increased 14.9% to $258.3 million, up from $224.8 million in the prior-year quarter. Net premiums written totaled $204.3 million, a 19.3% increase from $171.2 million in 2023. Pre-tax income for 2024 was $39.5 million, an increase from $26.2 million in 2023. Excluding investment gains, adjusted pre-tax income rose to $34.8 million from $22.8 million.Net income came in at $16.43 per share, an increase from $11.45 per share in 2023.Management CommentaryChairman J. Allen Fine noted that the company achieved its highest revenue level in over two years despite a challenging real estate market. He credited disciplined cost control measures for helping maintain profitability.Fine acknowledged that real estate conditions remain difficult due to record-low housing affordability, though demand has remained relatively steady. He highlighted that home sales volumes were at 30-year lows throughout 2024, but a potential stabilization or decrease in mortgage interest rates could support future transaction activity. The company remains focused on expanding its distribution network, investing in capital improvements, and managing costs while real estate activity remains subdued.Factors Influencing PerformanceThe robust revenue growth in the fourth quarter was primarily driven by higher premiums, reflecting increased activity levels in title insurance services. The company's ongoing expansion efforts and lower mortgage interest rates contributed to this momentum. Additionally, appreciation in home prices supported transaction values, enhancing fee-based revenues.However, declining investment gains weighed on the bottom line, reflecting weaker sales activity in the company’s investment portfolio. The increase in agent commissions also impacted expense growth, though this was offset in part by lower personnel costs.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Investors Title Company (ITIC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks