US Market News
2 months ago
Stewart Reports First Quarter 2026 ResultsApril 22, 2026 4:15 PM
PR Newswire (US)
Total revenues of $781.3 million ($778.4 million on an adjusted basis) compared to $612.0 million ($608.9 million on an adjusted basis) in the prior year quarterNet income of $17.0 million ($24.1 million on an adjusted basis) compared to net income of $3.1 million ($7.0 million on an adjusted basis) in the prior year quarter Diluted EPS of $0.55 ($0.78 on an adjusted basis) compared to prior year quarter diluted EPS of $0.11 ($0.25 on an adjusted basis)HOUSTON, April 22, 2026 /PRNewswire/ -- Stewart Information Services Corporation (NYSE: STC) today reported net income attributable to Stewart of $17.0 million ($0.55 per diluted share) for the first quarter 2026, compared to net income attributable to Stewart of $3.1 million ($0.11 per diluted share) for the first quarter 2025. On an adjusted basis, net income for the first quarter 2026 was $24.1 million ($0.78 per diluted share) compared to net income of $7.0 million ($0.25 per diluted share) in the first quarter 2025. Pretax income before noncontrolling interests for the first quarter 2026 was $23.6 million ($33.2 million on an adjusted basis) compared to $5.9 million ($11.2 million on an adjusted basis) for the first quarter 2025.
First quarter 2026 and 2025 results included $2.9 million and $3.1 million, respectively, of pretax net realized and unrealized gains, both primarily driven by net gains from fair value changes of equity securities investments recorded in the title segment."I am proud of our first quarter results as they reflect the momentum we have built in each of our businesses," commented Fred Eppinger, chief executive officer. "We are pleased with our ability to deliver these solid results while confronting housing market and macroeconomic volatility. We remain focused on growth across all of our business lines and are dedicated to serving our customers with excellence."Selected Financial Information
Summary results of operations are as follows (dollars in millions, except per share amounts, pretax margin and adjusted pretax margin, and amounts may not add as presented due to rounding):
Quarter EndedMarch 31,
20262025
Total revenues781.3612.0
Pretax income before noncontrolling interests23.65.9
Income tax expense (4.6)(0.5)
Net income attributable to noncontrolling interests(2.1)(2.3)
Net income attributable to Stewart17.03.1
Non-GAAP adjustments, after taxes*7.13.9
Adjusted net income attributable to Stewart*24.17.0
Pretax margin3.0 %1.0 %
Adjusted pretax margin*4.3 %1.8 %
Net income per diluted Stewart share0.550.11
Adjusted net income per diluted Stewart share*0.780.25
*Adjusted net income, adjusted pretax margin and adjusted net income per diluted share are non-GAAP measures. See Appendix A for explanation and reconciliation of non-GAAP adjustments.Title Segment
Summary results of the title segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin):
Quarter Ended March 31,
20262025% Change
Operating revenues603.2499.221 %
Investment income13.812.610 %
Net realized and unrealized gains3.13.11 %
Pretax income25.011.8112 %
Non-GAAP adjustments to pretax income*0.2(0.3)180 %
Adjusted pretax income*25.211.5119 %
Pretax margin4.0 %2.3 %
Adjusted pretax margin*4.1 %2.2 %
* Adjusted pretax income and adjusted pretax margin are non-GAAP financial measures. See Appendix A for explanation and reconciliation of non-GAAP adjustments.Title segment operating revenues increased $104.0 million (21 percent) in the first quarter 2026, driven by strong results across both our direct and agency title operations despite the current market environment. Direct title revenues improved $38.5 million (17 percent), primarily reflecting consistent strong performance in our domestic commercial business and improved domestic residential results. Gross agency revenues increased $65.5 million (25 percent), while revenues net of agency retention increased $10.7 million (23 percent) compared to the first quarter 2025. The title segment's combined employee costs and other operating expenses increased $36.9 million (14 percent); however, as a percentage of operating revenues, these costs improved to 48 percent in the first quarter 2026 from 51 percent in the prior year quarter, primarily due to higher title operating revenues. Title loss expense, as a percentage of title operating revenues, improved to 3.1 percent in the first quarter 2026, compared to 3.5 percent in the prior year quarter, primarily due to our continued overall favorable claims experience.Net realized and unrealized gains in the first quarters 2026 and 2025 were primarily related to net gains on fair value changes of equity securities investments. Investment income increased $1.2 million (10 percent) in the first quarter 2026, primarily driven by increased interest income resulting from increased cash balances compared to the first quarter 2025.In addition to the above net realized and unrealized gains, the title segment's adjusted pretax income for the first quarters 2026 and 2025 included total other non-GAAP adjustments of $3.3 million and $2.8 million, respectively, related to acquisition intangible asset amortization and severance expenses (refer to Appendix A for details).Direct title revenues information is presented below (dollars in millions):
Quarter Ended March 31,
20262025% Change
Non-commercial:
Domestic145.6134.48 %
International24.122.29 %
169.7156.68 %
Commercial:
Domestic93.969.335 %
International6.65.814 %
100.575.134 %
Total direct title revenues270.2231.717 %Domestic commercial revenues increased $24.6 million (35 percent) in the first quarter 2026, driven by higher commercial transaction size and volume, primarily across energy, industrial, site development, data center and retail asset classes. Average domestic commercial fee per file improved 33 percent to $21,100 in the first quarter 2026 compared to $15,800 in the first quarter 2025, while domestic commercial closed orders increased 2 percent. Domestic non-commercial revenues increased $11.2 million (8 percent) in the first quarter 2026, primarily due to higher closed transaction volumes, driven mainly by increased refinancing activity. Average domestic residential fee per file was $3,300 in the first quarter 2026, consistent with the prior year quarter. Total international revenues increased $2.7 million (10 percent) in the first quarter 2026, driven primarily by improved residential volumes compared to the prior year quarter.Real Estate Solutions Segment
Summary results of the real estate solutions (RES) segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin):
Quarter Ended March 31,
20262025% Change
Operating revenues161.497.166 %
Pretax income11.04.1172 %
Non-GAAP adjustments to pretax income*9.25.566 %
Adjusted pretax income*20.29.6111 %
Pretax margin6.8 %4.2 %
Adjusted pretax margin*12.5 %9.9 %
* Adjusted pretax income and adjusted pretax margin are non-GAAP financial measures. See Appendix A for an explanation and reconciliation of non-GAAP adjustments.Segment operating revenues increased $64.3 million (66 percent) in the first quarter 2026 compared to the first quarter 2025, primarily driven by higher credit information services revenues and our recently-acquired MCS business. Combined employee costs and other operating expenses increased $55.3 million (64 percent) in the first quarter 2026, primarily due to increased costs of services associated with increased revenue levels. Non-GAAP adjustments to pretax income for both first quarters 2026 and 2025 were primarily related to acquisition intangible asset amortization expenses. The first quarter 2026 also included adjustments for MCS acquisition-related costs.Corporate Segment
Net expenses attributable to corporate operations increased to $12.2 million for the first quarter 2026, compared to $9.9 million in the first quarter 2025, primarily driven by higher interest expense on increased debt balances.Expenses
Consolidated employee costs increased $35.3 million (19 percent) in the first quarter 2026 compared to the prior year quarter, primarily driven by higher salaries and employee benefits expenses related to an increased average employee count, as well as higher incentive compensation consistent with improved operating results. As a percentage of total operating revenues, consolidated employee costs improved to 29 percent in the first quarter 2026, compared to 31 percent in the prior year quarter, primarily due to higher operating revenues.Consolidated other operating expenses increased $56.6 million (35 percent) in the first quarter 2026 compared to the prior year quarter, primarily as a result of higher real estate solutions service expenses and increased title outside search and premium tax expenses associated with increased operating revenues. As a percentage of total operating revenues, first quarter 2026 consolidated other operating expenses were 28 percent, compared to 27 percent in the prior year quarter, primarily due to increased real estate solutions service expenses.Other
Net cash used by operations improved to $4.5 million in the first quarter 2026, compared to net cash used by operations of $29.9 million in the first quarter 2025, primarily as a result of the higher net income in the first quarter 2026. First Quarter Earnings Call
Stewart will hold a conference call to discuss the first quarter 2026 earnings at 8:30 a.m. Eastern Time on Thursday, April 23, 2026. To participate, dial 800-274-8461 (USA) or 203-518-9814 (International) – access code STCQ126. Additionally, participants can listen to the conference call through Stewart's Investor Relations website at https://investors.stewart.com/news-and-events/events/default.aspx. The conference call replay will be available from 11:00 a.m. Eastern Time on April 23, 2026 until midnight on April 30, 2026 by dialing (800) 925-9940 (USA) or (402) 220-5394 (International).About Stewart
Stewart (NYSE-STC) is a global real estate services company, offering products and services through our direct operations, network of Stewart Trusted Providers™ and family of companies. From residential and commercial title insurance and closing and settlement services to specialized offerings for the mortgage and real estate industries, we offer the comprehensive service, deep expertise and solutions our customers need for any real estate transaction. At Stewart, we are dedicated to becoming the premier title services company and we are committed to doing so by partnering with our customers to create mutual success. Learn more at stewart.com.Cautionary statement regarding forward-looking statements. Certain statements in this press release are "forward-looking statements", including statements related to Stewart's future business plans and expectations, including our plans to achieve market growth and pretax margin improvements. Forward-looking statements, by their nature, are subject to various risks and uncertainties that could cause our actual results to differ materially. Such risks and uncertainties include the volatility of general economic conditions, including economic changes that may result from new or increased tariffs, trade restrictions or geopolitical tensions, and adverse changes in the level of real estate activity, as well as a number of other risks and uncertainties discussed in detail in our documents filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2025, and if applicable, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K filed subsequently. We expressly disclaim any obligation to update, amend or clarify any forward-looking statements contained in this press release to reflect events or circumstances that may arise after the date hereof, except as may be required by applicable law.ST-IRSTEWART INFORMATION SERVICES CORPORATIONCONDENSED STATEMENTS OF INCOME(In thousands of dollars, except per share amounts and except where noted)
Quarter Ended March 31,
20262025
Revenues:
Title revenues:
Direct title 270,177231,680
Agency title333,006267,518
Real estate solutions161,37197,077
Total operating revenues764,554596,275
Investment income13,85112,656
Net realized and unrealized gains2,9023,053
781,307611,984
Expenses:
Amounts retained by agencies 276,142221,377
Employee costs221,098185,811
Other operating expenses 217,517160,911
Title losses and related claims 18,44217,702
Depreciation and amortization 16,85515,322
Interest7,6284,961
757,682606,084
Income before taxes and noncontrolling interests23,6255,900
Income tax expense(4,556)(484)
Net income19,0695,416
Less net income attributable to noncontrolling interests2,1052,339
Net income attributable to Stewart16,9643,077
Net earnings per diluted share attributable to Stewart0.550.11
Diluted average shares outstanding (000)30,80928,341
Selected financial information:
Net cash used by operations(4,490)(29,927)
Other comprehensive (loss) income(5,451)6,371
First Quarter Domestic Order Counts:
Opened Orders 2026:JanFebMarTotal
Closed Orders 2026:JanFebMarTotalCommercial1,7301,7321,8885,350
Commercial1,3181,4931,6484,459Purchase13,35713,98817,26544,610
Purchase7,3198,45210,26226,033Refinancing7,2347,4608,62723,321
Refinancing3,8474,2645,27413,385Other3,8462,4305,15111,427
Other1,4751,4711,8044,750Total26,16725,61032,93184,708
Total13,95915,68018,98848,627
Opened Orders 2025:JanFebMarTotal
Closed Orders 2025:JanFebMarTotalCommercial1,3361,3641,6284,328
Commercial1,3941,3761,6204,390Purchase14,11014,40617,73446,250
Purchase7,7848,56210,43426,780Refinancing5,4815,6556,42617,562
Refinancing3,1423,0743,6829,898Other3,3704,7842,64910,803
Other1,4131,5071,6854,605Total24,29726,20928,43778,943
Total13,73314,51917,42145,673STEWART INFORMATION SERVICES CORPORATIONCONDENSED BALANCE SHEETS(In thousands of dollars)
March 31,
2026December 31,
2025Assets:
Cash and cash equivalents271,235321,775Short-term investments46,25047,899Investments in debt and equity securities, at fair value602,485606,170Receivables, net216,203190,064Property and equipment, net91,89285,330Operating lease assets, net107,988106,034Title plants81,71181,670Goodwill1,276,1641,271,958Intangible assets, net of amortization316,097325,135Deferred tax assets7,7387,656Other assets220,224209,114
3,237,9873,252,805Liabilities:
Notes payable646,748646,606Accounts payable and accrued liabilities251,949255,852Operating lease liabilities123,859122,153Estimated title losses516,776524,473Deferred tax liabilities52,99153,323
1,592,3231,602,407Stockholders' equity:
Common Stock and additional paid-in capital521,984520,243Retained earnings1,146,0381,145,415Accumulated other comprehensive loss(27,359)(21,908)Treasury stock(2,666)(2,666)Stockholders' equity attributable to Stewart1,637,9971,641,084Noncontrolling interests7,6679,314Total stockholders' equity1,645,6641,650,398
3,237,9873,252,805
Number of shares outstanding (000)30,42530,223Book value per share53.8454.30STEWART INFORMATION SERVICES CORPORATIONSEGMENT INFORMATION(In thousands of dollars)
Quarter Ended:March 31, 2026
March 31, 2025
TitleReal
Estate
SolutionsCorporateTotal
TitleReal
Estate
SolutionsCorporateTotalRevenues:
Operating revenues603,183161,371-764,554
499,19897,077-596,275Investment income13,82229 -13,851
12,62135-12,656Net realized and unrealized gains (losses)3,085 -(183)2,902
3,055 -(2)3,053
620,090161,400(183)781,307
514,87497,112(2)611,984Expenses:
Amounts retained by agencies 276,142 --276,142
221,377 --221,377Employee costs195,36622,3603,372221,098
168,48713,7363,588185,811Other operating expenses 96,478119,6531,386217,517
86,50572,9431,463160,911Title losses and related claims 18,442--18,442
17,702--17,702Depreciation and amortization 8,2398,35825816,855
8,6146,37233615,322Interest45647,1687,628
42224,5374,961
595,123150,37512,184757,682
503,10793,0539,924606,084Income (loss) before taxes24,96711,025(12,367)23,625
11,7674,059(9,926)5,900Appendix A
Non-GAAP AdjustmentsManagement uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) to analyze its performance. These include: (1) adjusted revenues, which are reported revenues adjusted for net realized and unrealized gains and losses and (2) adjusted pretax income and adjusted net income, which are reported pretax income and reported net income after earnings from noncontrolling interests, respectively, adjusted for net realized and unrealized gains and losses, acquired intangible asset amortization, acquisition-related expenses (in connection with our MCS acquisition), and severance expenses. Adjusted diluted earnings per share (adjusted diluted EPS) is calculated using adjusted net income divided by the diluted average weighted outstanding shares. Adjusted pretax margin is calculated using adjusted pretax income divided by adjusted total revenues. Management views these measures as important performance measures of core profitability for its operations and as key components of its internal financial reporting. Management believes investors benefit from having access to the same financial measures that management uses.Below are reconciliations of the non-GAAP financial measures used by management to the most directly comparable GAAP measures for the quarter ended March 31, 2026 and 2025 (dollars in millions, except shares, per share amounts and pretax margins, and amounts may not add as presented due to rounding).
Quarter Ended March 31,
20262025% Chg
Total revenues781.3612.028 %
Non-GAAP revenue adjustment:
Net realized and unrealized gains(2.9)(3.1)
Adjusted total revenues778.4608.928 %
Net realized and unrealized gains:
Net unrealized gains on equity securities fair value changes3.33.2
Loss on disposal of a subsidiary(0.3)-
Net losses on sale of securities investments-(0.3)
Other items, net(0.1)0.2
Total2.93.1
Pretax income23.65.9300 %
Non-GAAP pretax adjustments:
Net realized and unrealized gains(2.9)(3.1)
Acquired intangible asset amortization9.48.3
Acquisition-related expenses2.5-
Severance expenses0.6-
Adjusted pretax income33.211.2198 %
GAAP pretax margin3.0 %1.0 %
Adjusted pretax margin4.3 %1.8 %
Net income attributable to Stewart17.03.1451 %
Non-GAAP pretax adjustments:
Net realized and unrealized gains(2.9)(3.1)
Acquired intangible asset amortization9.48.3
Acquisition-related expenses2.5-
Severance expenses0.6-
Net tax effects of non-GAAP adjustments(2.5)(1.4)
Non-GAAP adjustments, after taxes7.13.9
Adjusted net income attributable to Stewart24.17.0245 %
Diluted average shares outstanding (000)30,80928,341
GAAP net income per share0.550.11
Adjusted net income per share0.780.25
Quarter Ended March 31,
20262025% Chg
Title Segment:
Revenues620.1514.920 %
Net realized and unrealized gains(3.1)(3.1)
Adjusted revenues617.0511.821 %
Pretax income25.011.8112 %
Non-GAAP pretax adjustments:
Net realized and unrealized gains(3.1)(3.1)
Acquired intangible asset amortization2.72.8
Severance expenses0.6-
Adjusted pretax income25.211.5119 %
GAAP pretax margin4.0 %2.3 %
Adjusted pretax margin4.1 %2.2 %
Real Estate Solutions Segment:
Revenues161.497.166 %
Pretax income11.04.1172 %
Non-GAAP pretax adjustment:
Acquired intangible asset amortization6.75.5
Acquisition-related expenses2.5-
Adjusted pretax income20.29.6111 %
GAAP pretax margin6.8 %4.2 %
Adjusted pretax margin12.5 %9.9 %
View original content to download multimedia:https://www.prnewswire.com/news-releases/stewart-reports-first-quarter-2026-results-302750757.htmlSOURCE Stewart Information Services Corporation
Original: Stewart Reports First Quarter 2026 Results
US Market News
5 months ago
Stewart Reports Fourth Quarter and Full Year 2025 ResultsFebruary 4, 2026 4:15 PM
PR Newswire (US)
Total revenues of $790.6 million ($794.4 million on an adjusted basis) compared to $665.9 million ($664.2 million on an adjusted basis) in the prior year quarterNet income of $36.3 million ($47.9 million on an adjusted basis) compared to net income of $22.7 million ($31.5 million on an adjusted basis) in the prior year quarter Diluted EPS of $1.25 ($1.65 on an adjusted basis) compared to prior year quarter diluted EPS of $0.80 ($1.12 on an adjusted basis)Full year 2025 revenues of $2.9 billion compared to 2024 revenues of $2.5 billion Full year 2025 net income of $115.5 million ($139.6 million on an adjusted basis) compared to 2024 net income of $73.3 million ($94.4 million on an adjusted basis)Full year 2025 diluted EPS of $4.05 ($4.89 on an adjusted basis) compared to 2024 diluted EPS of $2.61 ($3.35 on an adjusted basis)HOUSTON, Feb. 4, 2026 /PRNewswire/ -- Stewart Information Services Corporation (NYSE: STC) today reported net income attributable to Stewart of $36.3 million ($1.25 per diluted share) for the fourth quarter 2025, compared to net income attributable to Stewart of $22.7 million ($0.80 per diluted share) for the fourth quarter 2024. On an adjusted basis, net income for the fourth quarter 2025 was $47.9 million ($1.65 per diluted share) compared to net income of $31.5 million ($1.12 per diluted share) in the fourth quarter 2024. Pretax income before noncontrolling interests for the fourth quarter 2025 was $51.7 million ($67.5 million on an adjusted basis) compared to $35.4 million ($47.3 million on an adjusted basis) for the fourth quarter 2024.
Fourth quarter 2025 results included $3.8 million of pretax net realized and unrealized losses, primarily recorded in the title segment, while the fourth quarter 2024 results included $1.7 million of pretax net realized and unrealized gains, comprised of $2.8 million net gains in the title segment and $1.1 million net losses in the corporate segment."I am pleased with our strong fourth quarter results as they demonstrate continued progress across all lines of business as the market begins to slowly improve," commented Fred Eppinger, chief executive officer. "We are focused on improving our operational results in all of our businesses regardless of market conditions and taking advantage of opportunities." Selected Financial Information
Summary results of operations are as follows (dollars in millions, except per share amounts, pretax margin and adjusted pretax margin, and amounts may not add as presented due to rounding):
Quarter EndedDecember 31,
Year Ended December 31,
20252024
20252024
Total revenues790.6665.9
2,921.62,490.4Pretax income before noncontrolling interests51.735.4
165.6114.3Income tax expense (10.8)(8.2)
(35.4)(26.2)Net income attributable to noncontrolling interests (4.6)(4.5)
(14.6)(14.8)Net income attributable to Stewart36.322.7
115.573.3Non-GAAP adjustments, after taxes*11.78.8
24.021.1Adjusted net income attributable to Stewart*47.931.5
139.694.4Pretax margin6.5 %5.3 %
5.7 %4.6 %Adjusted pretax margin*8.5 %7.1 %
6.8 %5.8 %Net income per diluted Stewart share1.250.80
4.052.61Adjusted net income per diluted Stewart share*1.651.12
4.893.35
*Adjusted net income, adjusted pretax margin and adjusted net income per diluted share are non-GAAP measures. See Appendix A for explanation and reconciliation of non-GAAP adjustments. Title Segment
Summary results of the title segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin):
Quarter Ended December 31,
20252024% Change
Operating revenues668.4562.719 %Investment income14.014.5(3 %)Net realized and unrealized (losses) gains(3.8)2.8(236 %)Pretax income58.045.228 %Non-GAAP adjustments to pretax income*10.15.390 %Adjusted pretax income*68.150.535 %Pretax margin8.5 %7.8 %
Adjusted pretax margin*10.0 %8.8 %
* Adjusted pretax income and adjusted pretax margin are non-GAAP financial measures. See
Appendix A for explanation and reconciliation of non-GAAP adjustments.Title segment operating revenues improved $105.7 million (19 percent) in the fourth quarter 2025, driven by strong performances by our direct and agency title operations with operating revenue growth of 18 percent and 20 percent, respectively, compared to the fourth quarter 2024. Segment total operating expenses increased $85.9 million (16 percent) compared to the prior year quarter, primarily driven by the $43.9 million (19 percent) higher agency retention expenses and $40.3 million (15 percent) increased combined employee costs and other operating expenses, consistent with title revenue growth. As a percentage of operating revenues, total employee costs and other operating expenses for the title segment improved to 47 percent in the fourth quarter 2025 compared to 49 percent in the fourth quarter 2024, primarily due to increased title operating revenues.Title loss expense increased $2.3 million (11 percent) in the fourth quarter 2025, compared to the fourth quarter 2024, primarily driven by higher title revenues. As a percentage of title operating revenues, the title loss expense improved to 3.4 percent in the fourth quarter 2025, compared to 3.7 percent in the prior year quarter, primarily influenced by our continued overall favorable claims experience.Net realized and unrealized losses in the fourth quarter 2025 were primarily related to net losses of $4.7 million on fair value changes of equity securities investments, $2.9 million on disposal of a subsidiary and $1.0 million on an acquisition liability adjustment, partially offset by net gains of $4.9 million on the sale of securities investments. Net realized and unrealized gains in the fourth quarter 2024 were primarily related to $1.4 million of net gains on fair value changes of equity securities investments and a $2.4 million gain on an acquisition liability adjustment, partially offset by a $0.8 million loss on disposal of a subsidiary.In addition to the above net realized and unrealized gains and losses, the title segment's adjusted pretax income for the fourth quarters 2025 and 2024 included total other non-GAAP adjustments of $6.3 million and $8.1 million, respectively, related to acquisition intangible asset amortization, office closure costs and severance expenses (refer to Appendix A for details).Direct title revenues information is presented below (dollars in millions):
Quarter Ended December 31,
20252024% Change
Non-commercial:
Domestic180.2162.511 %
International31.025.920 %
211.2188.412 %
Commercial:
Domestic116.184.138 %
International7.511.1(32 %)
123.695.230 %
Total direct title revenues 334.8283.618 %Domestic commercial revenues improved by $32.0 million (38 percent) in the fourth quarter 2025, primarily driven by increased sizes of commercial closed transactions, principally related to the data center and energy asset classes, while domestic non-commercial revenues increased $17.7 million (11 percent), primarily driven by higher combined purchase and refinancing closed transactions and average fee per file compared to the prior year quarter. Average domestic commercial fee per file for the fourth quarter 2025 grew 39 percent to $27,300, compared to $19,600 in the prior year quarter, while average domestic residential fee per file improved 13 percent to $3,300, compared to $2,900 in the fourth quarter 2024. Total international revenues increased $1.5 million (4 percent) in the fourth quarter 2025, primarily driven by improved residential volumes compared to the prior year quarter.Real Estate Solutions Segment
Summary results of the real estate solutions segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin):
Quarter Ended December 31,
20252024% Change
Total revenues111.987.029 %Pretax income3.90.9317 %Non-GAAP adjustments to pretax income*5.65.52 %Adjusted pretax income*9.56.547 %Pretax margin3.5 %1.1 %
Adjusted pretax margin*8.5 %7.4 %
* Adjusted pretax income and adjusted pretax margin are non-GAAP financial measures. See
Appendix A for an explanation and reconciliation of non-GAAP adjustments.Segment operating revenues increased $24.9 million (29 percent) in the fourth quarter 2025 compared to the fourth quarter 2024, primarily driven by our credit information services business. Combined employee costs and other operating expenses in the fourth quarter 2025 increased $21.6 million (27 percent) primarily due to increased costs of services related to revenue growth. Non-GAAP adjustments to pretax income shown in the schedule above were related to acquisition intangible asset amortization expenses (refer to Appendix A).Corporate Segment
Net expenses attributable to corporate operations for the fourth quarter 2025 increased to $10.1 million, compared to $9.7 million in the fourth quarter 2024, primarily due to higher interest expense on increased debt balances. The segment recorded a $1.1 million realized loss related to an investment impairment in the fourth quarter 2024.Expenses
Consolidated employee costs increased $25.9 million (13 percent) in the fourth quarter 2025 compared to the prior year quarter, primarily driven by higher salaries and employee benefits expenses related to a higher average employee count, and increased incentive compensation consistent with overall improved results. As a percentage of total operating revenues, consolidated employee costs in the fourth quarter 2025 improved to 28.9 percent compared to 30.7 percent in the prior year quarter, primarily due to higher operating revenues in the fourth quarter 2025.Consolidated other operating expenses increased $36.0 million (23 percent), primarily resulting from higher real estate solutions service expenses and title outside search and premium tax expenses driven by increased revenues in the fourth quarter 2025 compared to the prior year quarter. As a percentage of total operating revenues, fourth quarter 2025 consolidated other operating expenses were 25 percent, which was comparable to the prior year quarter.Other
Net cash provided by operations improved to $89.5 million in the fourth quarter 2025, compared to $68.0 million in the fourth quarter 2024, primarily driven by the higher net income in the fourth quarter 2025. Fourth Quarter Earnings Call
Stewart will hold a conference call to discuss the fourth quarter 2025 earnings at 8:30 a.m. Eastern Time on Thursday, February 5, 2026. To participate, dial 800-274-8461 (USA) or 203-518-9814 (International) – access code STCQ425. Additionally, participants can listen to the conference call through Stewart's Investor Relations website at https://investors.stewart.com/news-and-events/events/default.aspx The conference call replay will be available from 11:00 a.m. Eastern Time on February 5, 2026 until midnight on February 12, 2026 by dialing (800) 839-4198 (USA) or (402) 220-2988 (International).About Stewart
Stewart (NYSE-STC) is a global real estate services company, offering products and services through our direct operations, network of Stewart Trusted Providers™ and family of companies. From residential and commercial title insurance and closing and settlement services to specialized offerings for the mortgage and real estate industries, we offer the comprehensive service, deep expertise and solutions our customers need for any real estate transaction. At Stewart, we are dedicated to becoming the premier title services company and we are committed to doing so by partnering with our customers to create mutual success. Learn more at stewart.com.Cautionary statement regarding forward-looking statements. Certain statements in this press release are "forward-looking statements", including statements related to Stewart's future business plans and expectations, including our plans to achieve market growth and pretax margin improvements. Forward-looking statements, by their nature, are subject to various risks and uncertainties that could cause our actual results to differ materially. Such risks and uncertainties include the volatility of general economic conditions, including economic changes that may result from new or increased tariffs, trade restrictions or geopolitical tensions, and adverse changes in the level of real estate activity, as well as a number of other risk and uncertainties discussed in detail in our documents filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2024, and if applicable, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K filed subsequently. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2025. We expressly disclaim any obligation to update, amend or clarify any forward-looking statements contained in this press release to reflect events or circumstances that may arise after the date hereof, except as may be required by applicable law.ST-IRSTEWART INFORMATION SERVICES CORPORATIONCONDENSED STATEMENTS OF INCOME(In thousands of dollars, except per share amounts and except where noted)
Quarter Ended December 31,
Year Ended December 31,
20252024
20252024Revenues:
Title revenues:
Direct title 334,846283,606
1,157,4781,020,380Agency title333,578279,092
1,262,5681,043,173Real estate solutions111,92186,998
438,255358,559Total operating revenues780,345649,696
2,858,3012,422,112Investment income14,04314,538
57,77655,370Net realized and unrealized (losses) gains(3,835)1,699
5,55912,937
790,553665,933
2,921,6362,490,419Expenses:
Amounts retained by agencies 274,648230,724
1,047,660864,807Employee costs225,354199,418
830,594745,405Other operating expenses 195,019159,071
714,626603,959Title losses and related claims 22,96720,656
81,66880,411Depreciation and amortization 15,20815,549
61,07061,612Interest5,6325,147
20,44419,914
738,828630,565
2,756,0622,376,108Income before taxes and noncontrolling interests51,72535,368
165,574114,311Income tax expense(10,810)(8,156)
(35,411)(26,155)Net income40,91527,212
130,16388,156Less net income attributable to noncontrolling interests 4,6384,471
14,62814,846Net income attributable to Stewart36,27722,741
115,53573,310
Net earnings per diluted share attributable to Stewart1.250.80
4.052.61Diluted average shares outstanding (000)29,06028,277
28,56028,129
Selected financial information:
Net cash provided by operations89,54267,953
205,688135,609Other comprehensive income (loss)2,586(19,093)
21,489(8,182) Fourth Quarter Domestic Order Counts:
Opened Orders 2025:OctNovDecTotal
Closed Orders 2025:OctNovDecTotalCommercial1,5991,4041,4934,496
Commercial1,6371,2801,3384,255Purchase15,47112,07712,25139,799
Purchase11,4539,18511,20731,845Refinancing8,6516,4586,74221,851
Refinancing5,6084,4865,41315,507Other2,8202,1672,3947,381
Other3,3831,4912,0756,949Total28,54122,10622,88073,527
Total22,08116,44220,03358,556
Opened Orders 2024:OctNovDecTotal
Closed Orders 2024:OctNovDecTotalCommercial1,4711,2261,5864,283
Commercial1,3631,1741,7664,303Purchase15,85212,22411,32339,399
Purchase11,54510,09810,66232,305Refinancing7,2454,7825,22517,252
Refinancing4,9903,7243,44112,155Other4,0762,2392,0908,405
Other4,3393,9372,38610,662Total28,64420,47120,22469,339
Total22,23718,93318,25559,425 STEWART INFORMATION SERVICES CORPORATIONCONDENSED BALANCE SHEETS(In thousands of dollars)
December 31,
2025 December 31,
2024Assets:
Cash and cash equivalents321,775216,298Short-term investments47,89941,199Investments in debt and equity securities, at fair value606,170669,099Receivables – premiums from agencies38,28636,753Receivables – other159,583111,735Allowance for uncollectible amounts(7,805)(7,725)Property and equipment, net85,33087,613Operating lease assets, net106,034102,210Title plants81,67074,862Goodwill1,271,9581,084,139Intangible assets, net of amortization325,135173,075Deferred tax assets7,6564,827Other assets209,114136,060
3,252,8052,730,145Liabilities:
Notes payable646,606445,841Accounts payable and accrued liabilities255,852214,580Operating lease liabilities122,153118,835Estimated title losses524,473511,534Deferred tax liabilities53,32328,266
1,602,4071,319,056Stockholders' equity:
Common Stock and additional paid-in capital520,243358,721Retained earnings1,145,4151,089,484Accumulated other comprehensive loss(21,908)(43,397)Treasury stock(2,666)(2,666)Stockholders' equity attributable to Stewart1,641,0841,402,142Noncontrolling interests9,3148,947Total stockholders' equity1,650,3981,411,089
3,252,8052,730,145
Number of shares outstanding (000)30,22327,764Book value per share54.3050.50 STEWART INFORMATION SERVICES CORPORATIONSEGMENT INFORMATION(In thousands of dollars)
Quarter Ended:December 31, 2025
December 31, 2024
TitleReal
Estate
SolutionsCorporateTotal
TitleReal
Estate
SolutionsCorporateTotalRevenues:
Operating revenues668,425111,920-780,345
562,69886,998-649,696Investment income14,02023-14,043
14,51127-14,538Net realized and unrealized
(losses) gains(3,750)-(85)(3,835)
2,760-(1,061)1,699
678,695111,943(85)790,553
579,96987,025(1,061)665,933Expenses:
Amounts retained by agencies 274,648--274,648
230,724--230,724Employee costs204,70517,2133,436225,354
181,43614,6673,315199,418Other operating expenses 109,59284,1741,253195,019
92,58065,1241,367159,071Title losses and related claims 22,967--22,967
20,656--20,656Depreciation and amortization 8,3006,66624215,208
8,9216,30132715,549Interest456-5,1765,632
42014,7265,147
620,668108,05310,107738,828
534,73786,0939,735630,565Income (loss) before taxes58,0273,890(10,192)51,725
45,232932(10,796)35,368 Year Ended:December 31, 2025
December 31, 2024
TitleReal
Estate
SolutionsCorporateTotal
TitleReal
Estate
SolutionsCorporateTotalRevenues:
Operating revenues2,420,046438,255-2,858,301
2,063,553358,559-2,422,112Investment income57,663113-57,776
55,256114-55,370Net realized and unrealized gains
(losses)4,309-1,2505,559
14,146-(1,209)12,937
2,482,018438,3681,2502,921,636
2,132,955358,673(1,209)2,490,419Expenses:
Amounts retained by agencies 1,047,660--1,047,660
864,807--864,807Employee costs754,33962,47913,776830,594
677,37854,57213,455745,405Other operating expenses 381,832327,6685,126714,626
339,950258,8275,182603,959Title losses and related claims 81,668--81,668
80,411--80,411Depreciation and amortization 33,71226,2391,11961,070
35,04725,1041,46161,612Interest1,721318,72020,444
1,584918,32119,914
2,300,932416,38938,7412,756,062
1,999,177338,51238,4192,376,108Income (loss) before taxes181,08621,979(37,491)165,574
133,77820,161(39,628)114,311 Appendix A
Non-GAAP AdjustmentsManagement uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) to analyze its performance. These include: (1) adjusted revenues, which are reported revenues adjusted for net realized and unrealized gains and losses and (2) adjusted pretax income and adjusted net income, which are reported pretax income and reported net income after earnings from noncontrolling interests, respectively, adjusted for net realized and unrealized gains and losses, acquired intangible asset amortization, and office closure costs and severance expenses. Adjusted diluted earnings per share (adjusted diluted EPS) is calculated using adjusted net income divided by the diluted average weighted outstanding shares. Adjusted pretax margin is calculated using adjusted pretax income divided by adjusted total revenues. Management views these measures as important performance measures of core profitability for its operations and as key components of its internal financial reporting. Management believes investors benefit from having access to the same financial measures that management uses.Below are reconciliations of the non-GAAP financial measures used by management to the most directly comparable GAAP measures for the quarter and year ended December 31, 2025 and 2024 (dollars in millions, except shares, per share amounts and pretax margins, and amounts may not add as presented due to rounding).
Quarter Ended December 31,
Year Ended December 31,
20252024% Chg
20252024% Chg
Total revenues790.6665.919 %
2,921.62,490.417 %
Non-GAAP revenue adjustment:
Net realized and unrealized losses (gains)3.8(1.7)
(5.6)(12.9)
Adjusted total revenues794.4664.220 %
2,916.12,477.518 % Net realized and unrealized (losses) gains:
Net unrealized (losses) gains on equity securities
fair value changes(4.7)1.4
5.212.6
Net gains (losses) on sale of securities
investments4.9(0.2)
4.4-
Losses on disposal of subsidiaries(2.9)(0.8)
(2.9)(0.8)
Net (losses) gains from acquisition liability
adjustments(1.0)2.4
(2.0)2.4
Losses from impairment of investments(0.1)(1.1)
(0.2)(1.2)
Other items, net--
1.0(0.1)
Total(3.8)1.7
5.612.9
Pretax income51.735.446 %
165.6114.345 %
Non-GAAP pretax adjustments:
Net realized and unrealized losses (gains)3.8(1.7)
(5.6)(12.9)
Acquired intangible asset amortization8.48.5
33.533.6
Office closure and severance expenses3.55.1
4.57.8
Adjusted pretax income67.547.343 %
198.1142.839 %
GAAP pretax margin6.5 %5.3 %
5.7 %4.6 %
Adjusted pretax margin8.5 %7.1 %
6.8 %5.8 %
Net income attributable to Stewart36.322.760 %
115.573.358 %
Non-GAAP pretax adjustments:
Net realized and unrealized losses (gains)3.8(1.7)
(5.6)(12.9)
Acquired intangible asset amortization8.48.5
33.533.6
Office closure and severance expenses3.55.1
4.57.8
Net tax effects of non-GAAP adjustments(4.1)(3.1)
(8.4)(7.4)
Non-GAAP adjustments, after taxes11.78.8
24.021.1
Adjusted net income attributable to Stewart47.931.552 %
139.694.448 %
Diluted average shares outstanding (000)29,06028,277
28,56028,129
GAAP net income per share1.250.80
4.052.61
Adjusted net income per share1.651.12
4.893.35
Quarter Ended December 31,
Year Ended December 31,
20252024% Chg
20252024% Chg
Title Segment:
Revenues678.7580.017 %
2,482.02,133.016 %Net realized and unrealized losses (gains)3.8(2.8)
(4.3)(14.1)
Adjusted revenues682.4577.218 %
2,477.72,118.817 %Pretax income58.045.228 %
181.1133.835 %Non-GAAP pretax adjustments:
Net realized and unrealized losses (gains)3.8(2.8)
(4.3)(14.1)
Acquired intangible asset amortization2.83.0
11.211.5
Office closure and severance expenses3.55.1
4.47.8
Adjusted pretax income68.150.535 %
192.3138.938 %GAAP pretax margin8.5 %7.8 %
7.3 %6.3 %
Adjusted pretax margin10.0 %8.8 %
7.8 %6.6 %
Real Estate Solutions Segment:
Revenues111.987.029 %
438.3358.622 %
Pretax income3.90.9317 %
22.020.29 %Non-GAAP pretax adjustment:
Acquired intangible asset amortization 5.65.5
22.422.2
Severance expenses--
0.1-
Adjusted pretax income9.56.547 %
44.542.35 %GAAP pretax margin3.5 %1.1 %
5.0 %5.6 %
Adjusted pretax margin8.5 %7.4 %
10.1 %11.8 %
View original content to download multimedia:https://www.prnewswire.com/news-releases/stewart-reports-fourth-quarter-and-full-year-2025-results-302679435.htmlSOURCE Stewart Information Services Corporation
Original: Stewart Reports Fourth Quarter and Full Year 2025 Results
Enterprising Investor
12 years ago
Stewart Reports Earnings for the Fourth Quarter and Year 2013 (2/13/14)
- Pretax earnings were $15.5 million for the fourth quarter and $101.1 million for the year
- Net earnings attributable to Stewart were $17.5 million for the fourth quarter and $63.0 million for the year
- Title revenues decreased 10.6 percent for the fourth quarter 2013 compared to the prior year period and increased 3.8 percent overall for the year 2013 compared to 2012
- Title losses as a percentage of title revenues improved 220 basis points to 5.9 percent in 2013 compared to 8.1 percent in 2012
- Title segment pretax margins improved to 11.1 percent for the fourth quarter and 11.9 percent for the year 2013
HOUSTON, Feb. 13, 2014 /PRNewswire/ -- Stewart Information Services Corporation (NYSE: STC) today reported net earnings attributable to Stewart of $17.5 million, or $0.72 per diluted share, for the fourth quarter 2013, as compared to $61.8 million, or $2.56 per diluted share for the fourth quarter 2012. Comparisons of net earnings for 2013 to 2012 are affected by atypical income taxes in both periods, which resulted from the partial release of deferred tax asset valuation allowances in both years' fourth quarters and certain other tax adjustments reducing fourth quarter 2013 expense. The credit to income tax expense (benefit) from these items was $10.3 million ($0.42 per diluted share) and $36.6 million ($1.50 per diluted share) in the fourth quarters 2013 and 2012, respectively.
Pretax earnings for the fourth quarter 2013 were $15.5 million, a decrease of $11.2 million when compared to pretax earnings of $26.7 million for the fourth quarter 2012. The decline in pretax earnings is primarily attributable to a $15.7 million decrease in earnings from our mortgage services segment. During the latter half of 2013, the continued improvement in the housing market, although beneficial for our title operations overall, resulted in less demand for services related to distressed properties, which resulted in declining revenues in our mortgage services operations. During the third and fourth quarters of 2013, we entered into new contracts that, once fully implemented, will result in additional revenues in the first half of 2014.
For the year ended December 31, 2013, net earnings attributable to Stewart of $63.0 million, or $2.60 per diluted share, represents a decrease of $46.2 million from the same period in 2012. The decline in net earnings is attributable to the higher adjustment to the tax asset valuation allowance in 2012 compared to 2013 discussed previously and to the decrease in earnings in our mortgage services segment. Pretax earnings for the year ended December 31, 2013 were $101.1 million, an increase of $11.7 million from the same period in 2012. Results for the year ended December 31, 2013 include a non-cash charge of $5.4 million, or $0.22 per diluted share, relating to the early retirement of $37.8 million of our 6% Convertible Senior Notes due October 2014, as well as gains of $2.3 million, or $0.09 per diluted share, on non-title-related insurance policy proceeds (no tax benefit or expense is associated with either item; thus there was no tax-related effect on earnings per share).
Total revenues for the fourth quarter 2013 were $450.2 million, a decrease of $70.8 million, or 13.6 percent, from $521.0 million for the fourth quarter 2012. Operating revenues decreased 13.7 percent to $445.1 million in the fourth quarter 2013 compared to $515.6 million in the fourth quarter 2012. Compared to the fourth quarter 2012, title revenues decreased 10.6 percent in the fourth quarter 2013, while mortgage services revenues decreased 46.5 percent.
Total revenues for 2013 were $1,928.0 million, an increase of $17.6 million, or 0.9 percent, from $1,910.4 million for the 2012 year.
"Our 2013 results reflect transitions for Stewart and our industry during which we made significant progress adapting by focusing on our core business, aligning operations around delivery channels, enhancing productivity and reducing our risk profile," said Matthew W. Morris, chief executive officer. "Over the course of the year, we divested non-core assets, significantly lowered our title loss ratio and better aligned our product offerings with our customers' needs in order to deliver high-quality, trusted services. As the market continues to change and the regulatory landscape evolves, we believe we are well positioned to excel through our disciplined growth strategies and innovative service efforts like the Stewart Trusted ProviderTM program."
"Our title operations delivered another solid year of earnings, as we managed the business to maximize profitability in the face of increasing interest rates. Revenues, which were impacted by the weakening in refinancing title orders and a significant decline in total opened orders due to harsh winter weather conditions in the last month of the year, increased $61.7 million for the year, while title segment earnings increased $50.2 million."
"During the course of the quarter, we continued to transform our mortgage services operations from a default-centric operation to one that can provide high-quality offerings to mortgage lending clients across a more normalized market. Although revenues continued to decline significantly and the ramp-up of revenues from new products and services is taking longer than expected, we remain confident in future opportunities. We believe our continued ability to diversify our mortgage service offerings as well as our client base positions us for solid performance in this segment."
"We remain optimistic regarding the outlook for real estate in 2014, as the industry continues to adapt to an origination market that is much smaller overall, and one that is purchase-driven rather than refinance-driven. We will continue our priority of increasing our commercial presence while expanding our direct office presence in attractive markets. We will maintain our focus on ensuring our network of independent title agencies represent the best in the industry. We recognize that exceptional customer service sets us apart, and so we will continue to invest in innovative, high-quality, cost-effective service delivery. Most importantly, we will maintain our focus on reducing our cost structure and improving the efficiency of our operations to expand margins. These are the fundamentals of success, and we believe consistent execution of them will produce improving financial results, sustainable growth and enhanced shareholder value," concluded Morris.
[table removed]
Real Estate Market
The national real estate market showed steady improvement throughout the fourth quarter 2013, particularly in existing home sales, with the twelve-month moving average sales rate increasing 10.0 percent from the same quarter 2012, and sequentially 1.2 percent from the third quarter 2013. Increasing median home prices accompanied this higher volume, rising 10.8 percent from the fourth quarter 2012. Refinancing originations declined during the quarter, slowed by an increase in interest rates, which have risen by more than 100 basis points since January 2013. According to Fannie Mae, fourth quarter 2013 refinance lending decreased 67.8 percent from the fourth quarter 2012 and decreased 42.5 percent sequentially from the third quarter 2013.
Title Insurance Segment
Our title segment revenues declined 10.5 percent and 16.2 percent from the fourth quarter 2012 and third quarter 2013, respectively. As noted above, refinancing originations, and therefore title orders, fell significantly from the prior year quarter, and, although existing home sales continue to show improvement on a twelve month moving average basis, unadjusted existing home sales declined almost 8 percent over the prior year period. In the fourth quarter 2013, the title segment generated a pretax margin of 11.1 percent, an improvement of 120 basis points from fourth quarter 2012 and, sequentially, a decrease of 120 basis points from the third quarter 2013.
Revenues from direct operations for the fourth quarter 2013 decreased 7.3 percent compared to the same quarter last year and 9.8 percent sequentially from the third quarter 2013. Our direct operations include local closing offices, commercial, and international operations. We generate commercial revenues both domestically and internationally. U.S. and Canadian commercial revenues increased 11.3 percent to $42.3 million from the fourth quarter 2012 and increased sequentially by 34.7 percent from the third quarter 2013. International operating revenues (including foreign-sourced commercial revenues) decreased 0.8 percent to $27.9 million from the fourth quarter 2012 and sequentially by 18.8 percent from the third quarter 2013.
Total opened title orders in direct domestic operations declined over the prior year, decreasing 26.5 percent from the fourth quarter 2012 and 19.3 percent sequentially from the third quarter 2013. Opened orders for residential resale transactions declined significantly from third quarter 2013 due to the normal seasonal slowdown in activity, which was exacerbated by the unusually harsh winter weather in December, and refinancing orders falling significantly during the fourth quarter. Refinancing orders were 18 percent of total opened orders in fourth quarter 2013, down from 35 percent in the fourth quarter 2012. Title orders closed per workday in direct operations decreased 28.6 percent and 19.5 percent from the fourth quarter 2012 and the third quarter 2013, respectively. Title revenue per closed order in direct operations increased 20.8 percent and 1.4 percent from the fourth quarter 2012 and the third quarter 2013, respectively, primarily due to home price appreciation, a shift in order mix to more resale and commercial orders, and, to a lesser extent, a rate increase in Texas that became effective May 1, 2013.
Independent agency revenues decreased 13.0 percent from the fourth quarter 2012 and 21.0 percent sequentially from the third quarter 2013. Our independent agency remittance rate improved to 20.8 percent in the fourth quarter 2013 from 18.2 percent in the fourth quarter 2012 and improved sequentially from 18.4 percent in the third quarter 2013. The improvement in agency remittance rates is due largely to the geographic mix of revenues from independent agencies. Independent agency revenues net of agent retention expense in the fourth quarter 2013 were $50.4 million, essentially unchanged from the prior year's fourth quarter of $50.6 million. However, independent agency revenues net of agent retention expense increased 11.0 percent for the year 2013 compared to 2012, and over the past year, the average annual premium received per agency increased 19.5 percent.
We are taking the lead in assisting our independent agencies to prepare for new regulation by the Consumer Financial Protection Bureau and enabling them to meet the changing market and regulatory requirements for settlement services providers. In this regard, our Stewart Trusted ProviderTM Program has been well received by independent agencies and lenders. In order to improve profitability and reduce risk, we are continuing with our disciplined strategy of partnering with the highest-quality independent agencies in the industry, and are focusing our growth efforts on capturing a greater percentage of business from current agencies and signing new high-quality agencies in states with favorable remittance rates.
Title policy loss development continued to improve during the fourth quarter 2013, reflecting an ongoing decline in prior policy year loss experience on non-large title losses as well as our continued attention to prudent risk management with emphasis on the quality and profitability of our independent agency network. The title loss ratio in any given quarter is significantly influenced by any new large claims incurred as well as adjustments to reserves for existing large claims. As a percentage of title revenues, title losses were 6.2 percent in the fourth quarter 2013, a decrease of 140 basis points from the fourth quarter 2012 and 30 basis points from the third quarter 2013. For the year, title losses as a percentage of title revenues decreased to 5.9 percent in 2013 from 8.1 percent in 2012. The decrease in the title loss ratio was due to lower provisioning rates in 2013 compared to 2012, while higher losses in the current year relating to large title losses were offset by non-large loss reserve reductions of a net $2.8 million for the year. Total balance sheet policy loss reserves were $506.9 million at December 31, 2013, and continued to be above the actuarial mid-point of total estimated policy losses.
Mortgage Services Segment
Revenues from our mortgage services segment were $25.6 million for the fourth quarter 2013, as compared to $46.7 million in the fourth quarter 2012, largely due to the project-based nature of the contracts in this segment. As noted in third quarter 2013 results, this segment is transitioning from its historical service offerings for the management of defaulted and distressed loans to a more sustainable suite of service offerings to support the ongoing loan origination and servicing support needs of lenders in a heightened regulatory environment. Many lending institutions are under pressure to maintain earnings while managing the rising costs of regulatory compliance, which we believe will drive increased demand for the outsourced solutions we offer.
We are focused on reducing expenses in the segment; however, we were unable to achieve efficiencies fast enough to offset the decline in revenues. As a result, the segment reported a pretax loss of $1.6 million in the fourth quarter 2013 compared to pretax earnings of $14.2 million and a pretax loss of $1.4 million for the fourth quarter 2012 and third quarter 2013, respectively. We maintained much of the existing operational infrastructure to support newly acquired contracts that are in the process of ramping up to their full revenue potential. Many of these contracts require several months to reach steady-state revenues and normalized margins. Nonetheless, in January 2014, we began adjusting employee levels. Additionally, this quarter the mortgage services segment was negatively impacted by the integration costs and operating results of a recent acquisition of assets as these assets are assimilated and we work to reach their full contribution potential. The acquisition of these assets, which we expect to be accretive to earnings during the first half of 2014, enables us to continue diversifying our mortgage service offerings to a broader client base.
Notwithstanding the short-term operating losses of our mortgage services segment, we continue to execute on our longer-term strategy of providing mortgage process outsourcing services which are high-quality, flexible and responsive. Adding new service capabilities within the broad category of servicing and origination support is a key component of our strategy and will serve to deepen our relationship with mortgage lenders, enhance our abilities to improve the real estate transaction process and counterbalance highly cyclical title revenues while increasing our margins.
Expenses
Employee costs in the fourth quarter 2013 decreased 2.9 percent from the fourth quarter 2012 and decreased sequentially 4.4 percent from the third quarter 2013. As a percentage of total operating revenues, employee costs were 31.6 percent, 28.1 percent, and 27.6 percent in the fourth quarter 2013, fourth quarter 2012, and third quarter 2013, respectively. As newly opened title orders decline, we are actively managing employee costs in the title segment to counteract the expected revenue decline while being mindful of the short term-nature of depressed opened orders due to seasonal factors. We also continue to pursue our growth objectives for our direct title operations and, to that end, are aggressively recruiting additional sales professionals in our target growth markets. As noted above, employee costs in the mortgage services segment did not decline at the same rate as revenues and were also impacted by the increase in employees related to the recent acquisition. Therefore, headcount reductions targeted to reduce mortgage services annualized employee costs by approximately 7 percent took place in January 2014.
Other operating expenses decreased by 12.0 percent in the fourth quarter 2013 compared to the fourth quarter 2012 and decreased 3.1 percent sequentially from the third quarter 2013. The decline from the prior year fourth quarter is due to a decline in litigation defense-related accruals. The sequential decrease in the fourth quarter 2013 from the third quarter 2013 is partially due to decreased variable costs associated with the 9.8 percent sequential decrease in direct title operations revenues. As a percentage of total operating revenues, other operating expenses were 15.8 percent, 15.5 percent, and 13.7 percent in the fourth quarter 2013, fourth quarter 2012 and third quarter 2013, respectively.
Cash provided by operations was $16.3 million in the fourth quarter 2013 compared to $63.7 million for the same period in 2012. For the year ended December 31, 2013, cash provided by operations was $87.2 million, a decline of $33.3 million, or 27.7 percent, over the same period in 2012.
About Stewart Information Services
Stewart Information Services Corp. (NYSE: STC) is a leading provider of real estate services, including global residential and commercial title insurance, escrow and settlement services, lender services, underwriting, specialty insurance, loan due diligence, compliance solutions, service performance management and other solutions that facilitate successful real estate transactions. Stewart offers personalized service, industry expertise and customized solutions for virtually any type of real estate transaction, through our direct operations, network of approved agencies and other companies within the Stewart family. Through a focus on integrity, smart growth and conservative management, Stewart remains committed to serving our customers, innovating and improving to meet their needs in an ever-changing market.
http://www.prnewswire.com/news-releases/stewart-reports-earnings-for-the-fourth-quarter-and-year-2013-245348691.html
Enterprising Investor
13 years ago
Stewart Reports Earnings for the Second Quarter 2013 (7/25/13)
- Net earnings attributable to Stewart increased $2.0 million (8.0 percent) to $26.9 million
- Earnings per diluted share increased $0.04 (3.8 percent) to $1.09
- Pretax earnings improved $17.7 million (56.5 percent) to $48.9 million
- Pretax margin improved to 9.4 percent from 6.5 percent
- On a year-to-date basis, revenues increased $72.2 million to yield a $32.7 million increase in pretax earnings, an incremental margin of 45.3 percent
HOUSTON, July 25, 2013 /PRNewswire/ -- Stewart Information Services Corporation (NYSE-STC) today reported net earnings attributable to Stewart of $26.9 million, or $1.09 per diluted share, for the second quarter 2013, representing an improvement of $2.0 million over the second quarter 2012 net earnings of $24.9 million, or $1.05 per diluted share. Pretax earnings for the second quarter 2013 were $48.9 million, an improvement of $17.7 million over the second quarter 2012's $31.2 million.
For the first six months of 2013, net earnings attributable to Stewart of $30.1 million, or $1.25 per diluted share, represent an improvement of $17.3 million over the same period in 2012. Results for the first six months of 2013 include a non-cash charge of $5.4 million, or $0.22 per share, relating to the early retirement of $37.1 million of our 6% Convertible Senior Notes due October 2014, as well as a gain of $1.7 million, or $0.07 per share, on non-title-related insurance policy proceeds (no tax benefit or expense is associated with either item; thus no tax-related earnings per share effect).
Total revenues for the second quarter 2013 were $517.2 million, an increase of $33.5 million, or 6.9 percent, from $483.7 million for the second quarter 2012. Operating revenues increased 7.0 percent to $512.8 million in the second quarter 2013 compared to $479.2 million in the second quarter 2012. Compared to second quarter 2012, title revenues increased 9.7 percent in the second quarter 2013, while mortgage services revenues decreased 22.2 percent. Total revenues for the first six months of 2013 were $940.9 million, an increase of $72.2 million, or 8.3 percent, from $868.7 million for the same period in 2012.
"Throughout 2012 and continuing into 2013, we have diligently executed our plan to simplify our operations and align our organization to our customers' needs. This focus has resulted in improved financial performance over the last several quarters, and the second quarter 2013 continued the trend of solid financial results," said Matthew W. Morris, chief executive officer. "Our title operations delivered a 15.4 percent pretax margin, up from 9.9 percent in the prior year quarter, driven by improving transaction volume and increasing prices, as well as lower title losses. We have been able to capitalize on Texas being our home market, with strong job growth feeding ongoing population growth and the concurrent demand for housing. We further benefited from a 3.8 percent rate increase in Texas effective May 1, the first rate increase for the Texas title industry in more than 20 years."
"Although revenues and pretax margins in our mortgage services operations declined compared to the prior year quarter and this year's first quarter, the decline was anticipated and does not alter our strategy of continuing to invest in new service offerings, diversify our client base and generate sustainable revenues. We believe that we are well positioned to continue offering outsourcing services and solutions to our lending clients to help them manage the challenge of ever-increasing regulations," continued Morris.
"As always, we are mindful of developing market conditions. Late in the second quarter and continuing so far into the third quarter, we saw newly opened orders begin to decline, largely as a result of fewer refinancing transactions. Even though refinancing transactions continue to represent a lower proportion of our total direct orders than industry averages, we are actively implementing measures to control costs as closings decline. Notwithstanding the potential for a decline in revenues in the third quarter, we are continuing our plans to focus on strong resale volume and expand our direct office presence in select markets, as our new operating model allows for office expansion that is quickly profitable," concluded Mr. Morris.
Summary results of operations are as follows (dollars in millions, except per share amounts):
[Table removed]
The real estate market showed steady improvement throughout the second quarter 2013, particularly in existing home sales, with the 12-month moving average seasonally-adjusted annualized sales rate increasing 10.5 percent from the same quarter 2012, and sequentially 2.6 percent from the first quarter 2013. Increasing median home prices accompanied this higher volume, rising 10.0 percent from the second quarter 2012. Refinance activity also remained strong during the quarter, driven by record low interest rates and the modified HARP program. Second quarter 2013 refinance lending increased 19.6 percent from the same quarter 2012 and increased 9.1 percent sequentially from the first quarter 2013 according to Fannie Mae. We are beginning to see a decline in refinancing orders in our direct operations as a result of the approximately 100 basis point increase in interest rates since January of this year.
Revenues from our title segment increased 9.2 percent and 24.3 percent from the second quarter 2012 and first quarter 2013, respectively. Revenues from direct operations for the second quarter 2013 increased 12.6 percent compared to the same quarter last year and increased 32.7 percent sequentially from the first quarter 2013. Our direct operations include local closing offices, commercial, and international operations. We generate commercial revenues both domestically and internationally; U.S. and Canadian commercial revenues increased 21.6 percent to $37.3 million from the second quarter 2012 and sequentially by 40.9 percent from the first quarter 2013. This was the best second quarter for commercial revenues since 2007. International operating revenues (including foreign-sourced commercial revenues) declined 6.3 percent to $30.6 million from the second quarter 2012 and increased sequentially from the first quarter 2013 by 53.6 percent.
Opened title orders in direct operations improved over the prior year period, increasing 4.2 percent from the second quarter 2012, and 10.4 percent sequentially from the first quarter 2013. Title orders closed per workday in direct operations increased 9.1 percent and 16.2 percent from the second quarter 2012 and the first quarter 2013, respectively. Title revenue per closed order in direct operations increased 3.6 percent and 11.7 percent from the second quarter 2012 and the first quarter 2013, respectively, primarily due to home price appreciation and, to a lesser extent, a rate increase in Texas that was effective May 1. Although industry-wide order counts continue to be influenced by refinancing activity driven by historically low interest rates, our overall proportion of total direct orders in the second quarter from refinancing transactions was lower than industry averages, which we expect will result in less volatility in future revenues as refinancing transactions retract.
Independent agency revenues increased 7.5 percent from the second quarter 2012 and increased 18.6 percent sequentially from the first quarter 2013. Our independent agency remittance rate improved to 18.7 percent in the second quarter 2013 from 17.6 percent in the second quarter 2012 and from 17.8 percent in the first quarter 2013. Since early 2009, we have vetted our independent agencies with the goal of achieving the highest-quality network of independent agencies. Since the fourth quarter 2008, our average annual premium revenue received per independent agency has increased more than 125 percent and we have reduced the number of independent agencies in our network by approximately 42 percent. Further, the policy loss ratio of our current independent agency network for the second quarter 2013 is less than one-fourth of its level in the fourth quarter 2008. As the operating environment for independent agencies evolves due to proposed new regulation by the Consumer Financial Protection Bureau and increased lender due diligence, we have taken a lead in helping our independent agencies prepare for the market changes by offering regular educational opportunities and effective solutions. We have provided leadership to the American Land Title Association in its efforts to develop title insurance and settlement company best practices. Our focus on partnering with the highest quality independent agencies in the industry should yield consistent and improving profitability.
Revenues from our mortgage services segment decreased 15.8 percent from the second quarter 2012 and decreased 9.4 percent sequentially from the first quarter 2013. The decline in revenues is largely due to the scheduled expiration of certain contracts related to providing distressed loan services. During the second quarter, preparatory work began on several recently signed contracts, which should generate revenues beginning in mid-third quarter 2013 and partially offset the revenue loss from the expiring contracts. As a result, mortgage services pretax earnings in the second quarter 2013 were $5.2 million (13.9 percent margin) as compared to $12.8 million (28.8 percent margin) in the second quarter 2012 and $9.8 million (23.8 percent margin) in the first quarter 2013. The offerings in our mortgage services segment continue to expand, with new projects and contracts within the broad category of servicing support creating a more diverse client base and providing the foundation for more sustainable revenues over market cycles. The focus is on providing mortgage process outsourcing services which are high-quality, flexible and responsive.
Title policy loss development continued to improve more than anticipated during the second quarter 2013, reflecting an ongoing decline in prior policy year loss experience as well as our continued attention to prudent risk management and emphasis on quality and profitability of our network of independent agencies. Due to this ongoing improvement, we lowered our overall loss provisioning rate effective with policies issued in the second quarter 2013, and recorded a policy loss reserve reduction of $6.6 million relating to prior policy years. As a percentage of title revenues, title losses were 5.0 percent, 8.7 percent and 6.1 percent in the second quarter 2013, second quarter 2012 and first quarter 2013, respectively. Excluding the reserve reduction and adjustments related to large claims, title losses were 5.9 percent, 7.5 percent and 6.1 percent in the second quarter 2013, second quarter 2012 and first quarter 2013, respectively. The title loss ratio in any given quarter is significantly influenced by any new large claims incurred as well as adjustments to reserves for existing large claims. Adjustments to new and existing large losses did not exceed our normal provisioning rate during the first or second quarters of 2013. Although there can be no assurances that this result for large losses will continue for the remainder of 2013, we continue to manage and resolve large claims prudently and in keeping with our commitments to our policyholders. Cash claim payments in the second quarter 2013 increased 7.4 percent over the second quarter 2012 and decreased 11.7 percent from the first quarter 2013 in which payments on previously reserved large losses had been made.
Employee costs in the second quarter 2013 increased 11.7 percent from the second quarter 2012 and increased sequentially 7.0 percent from the first quarter 2013. As a percentage of total operating revenues, employee costs were 28.5 percent, 27.4 percent, and 32.3 percent in the second quarter 2013, second quarter 2012, and first quarter 2013, respectively. Employee costs in the mortgage services segment did not substantially decline due to the preparatory work on recently signed contracts, as discussed above. Many of the employees servicing the expired contracts will be utilized for the new contracts as production ramps up in the third quarter.
Other operating expenses increased by 4.3 percent in the second quarter 2013 compared to the second quarter 2012 and increased 15.1 percent sequentially from the first quarter 2013. As a percentage of total operating revenues, other operating expenses were 14.3 percent, 14.7 percent, and 15.1 percent in the second quarter 2013, second quarter 2012, and first quarter 2013, respectively. The sequential increase in the second quarter 2013 from the first quarter 2013 is primarily due to increased variable costs associated with the 24.4 percent sequential increase in title revenues.
Cash provided by operations was $46.5 million in the second quarter 2013 compared to $39.7 million for the same period in 2012. On a year to date basis, cash provided by operations was $43.1 million, an improvement of $23.7 million, or 122.4 percent, over the first six months of 2012.
Stewart Information Services Corp. (NYSE: STC) is a leading provider of real estate services, including global residential and commercial title insurance, escrow and settlement services, lender services, underwriting, specialty insurance and other solutions that facilitate successful real estate transactions. Stewart offers personalized service, industry expertise and customized solutions for virtually any type of real estate transaction, through our direct operations, network of approved agencies and other companies within the Stewart family. Through a focus on integrity, smart growth and conservative management, Stewart remains committed to serving our customers, innovating and improving to meet their needs in an ever-changing market.
http://www.prnewswire.com/news-releases/stewart-reports-earnings-for-the-second-quarter-2013-216900081.html
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