EX-99.1 2 tm2513006d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

NEWS RELEASE

 

STEWART INFORMATION SERVICES CORP. CONTACT
P.O. Box 2029 Kathryn Bass / Brian Glaze
Houston, Texas 77252-2029 Investor Relations
www.stewart.com (713) 625-8633

 

Stewart Reports First Quarter 2025 Results

 

·Total revenues of $612.0 million ($608.9 million on an adjusted basis) compared to $554.3 million ($547.3 million on an adjusted basis) in the prior year quarter

·Net income of $3.1 million ($7.0 million on an adjusted basis) compared to net income of $3.1 million ($4.6 million on an adjusted basis) in the prior year quarter

·Diluted EPS of $0.11 ($0.25 on an adjusted basis) compared to prior year quarter diluted EPS of $0.11 ($0.17 on an adjusted basis)

 

HOUSTON, April 23, 2025 - Stewart Information Services Corporation (NYSE: STC) today reported net income attributable to Stewart of $3.1 million ($0.11 per diluted share) for the first quarter 2025, compared to net income attributable to Stewart of $3.1 million ($0.11 per diluted share) for the first quarter 2024. On an adjusted basis, net income for the first quarter 2025 was $7.0 million ($0.25 per diluted share) compared to net income of $4.6 million ($0.17 per diluted share) in the first quarter 2024. Pretax income before noncontrolling interests for the first quarter 2025 was $5.9 million ($11.2 million on an adjusted basis) compared to $7.1 million ($9.1 million on an adjusted basis) for the first quarter 2024.

 

First quarters 2025 and 2024 results included $3.1 million and $7.0 million, respectively, of total pretax net realized and unrealized gains, both primarily related to net gains from fair value changes of equity securities investments recorded in the title segment.

 

“I’m proud of our first quarter 2025 performance as we delivered strong revenue results across all our segments, growing our total revenues compared to the first quarter of last year,” commented Fred Eppinger, chief executive officer. “We are pleased with our performance as we were able to deliver these results while navigating a historically challenging macro environment. We remain focused on managing our operations well, growing the company thoughtfully and relentlessly serving our customers.”

 

-1-

 

 

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 Ended
March 31,
 
   2025   2024 
Total revenues   612.0    554.3 
Pretax income before noncontrolling interests   5.9    7.1 
Income tax expense   (0.5)   (0.9)
Net income attributable to noncontrolling interests   (2.3)   (3.1)
Net income attributable to Stewart   3.1    3.1 
Non-GAAP adjustments, after taxes*   3.9    1.5 
Adjusted net income attributable to Stewart*   7.0    4.6 
Pretax margin   1.0%   1.3%
Adjusted pretax margin*   1.8%   1.7%
Net income per diluted Stewart share   0.11    0.11 
Adjusted net income per diluted Stewart share*   0.25    0.17 

 

*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, 
   2025   2024   % Change 
Operating revenues   499.2    451.4    11%
Investment income   12.6    12.9    (2)%
Net realized and unrealized gains   3.1    7.1    (57)%
Pretax income   11.8    10.2    16%
Non-GAAP adjustments to pretax income*   (0.3)   (3.7)     
Adjusted pretax income*   11.5    6.5    77%
Pretax margin   2.3%   2.2%     
Adjusted pretax margin*   2.2%   1.4%    

 

* 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 in the first quarter 2025 increased $47.8 million (11 percent), as revenues from both our direct and agency title operations improved, while total segment operating expenses increased $41.9 million (9 percent) compared to the first quarter 2024. Agency retention expenses in the first quarter 2025 increased $21.4 million (11 percent), consistent with the gross agency revenue increase of $26.7 million (11 percent) compared to the prior year quarter.

 

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Title segment combined employee costs and other operating expenses for the first quarter 2025 increased $20.3 million (9 percent), compared to the first quarter 2024, primarily due to increased incentive compensation expenses related to higher title revenues, and higher outside search and service expenses resulting from higher commercial revenues. As a percentage of operating revenues, total title employee costs and other operating expenses improved to 51.1 percent in the first quarter 2025 compared to 52.0 percent in the prior year quarter.

 

Title loss expense in the first quarter 2025 was $17.7 million compared to $17.4 million in the first quarter 2024. As a percentage of title operating revenues, first quarter 2025 title loss expense improved to 3.5 percent, compared to 3.9 percent in the prior year quarter, primarily driven by our overall favorable claims experience. In addition to the net realized and unrealized gains presented above (which were primarily related to fair value changes of equity securities investments), non-GAAP adjustments to the title segment’s pretax income for the first quarters 2025 and 2024 of $2.8 million and $3.4 million, respectively, were primarily related to acquisition intangible asset amortization and related expenses (refer to Appendix A for details).

 

Direct title revenues information is presented below (dollars in millions):

 

   Quarter Ended March 31, 
   2025   2024   % Change 
Non-commercial:               
Domestic   134.4    135.3    (1)%
International   22.2    19.2    16%
    156.6    154.5    1%
Commercial:               
Domestic   69.3    49.7    39%
International   5.8    6.4    (9)%
    75.1    56.1    34%
Total direct title revenues   231.7    210.6    10%

 

Domestic commercial revenues in the first quarter 2025 improved $19.6 million (39 percent), driven by a 13 percent higher average transaction size and a 23 percent increase in commercial closed transactions compared to the prior year quarter. Domestic non-commercial revenues in the first quarter 2025 were slightly lower compared to the prior year quarter, primarily due to lower total non-commercial domestic transactions, partially offset by a 13 percent higher fee per file during first quarter 2025. First quarter 2025 average domestic commercial fee per file was $15,800, compared to $13,900 from the first quarter 2024, while average domestic residential fee per file was $3,300, compared to $2,900 from the prior year quarter. Total international revenues improved $2.4 million (9 percent) in the first quarter 2025, primarily driven by increased volumes from our Canadian operations compared to the prior year quarter.

 

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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 March 31, 
   2025   2024   % Change 
Operating revenues   97.1    83.0    17%
Pretax income   4.1    6.7    (40)%
Non-GAAP adjustments to pretax income*   5.5    5.6      
Adjusted pretax income*   9.6    12.3    (22)%
Pretax margin   4.2%   8.1%     
Adjusted pretax margin*   9.9%   14.8%     

 

* 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 improved $14.1 million (17 percent) in the first quarter 2025, primarily driven by increased revenues from our credit information services operations compared to the first quarter 2024. Combined employee costs and other operating expenses increased $16.6 million (24 percent), primarily due to higher costs of services related to credit information and increased employee costs supporting 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

 

The segment’s results primarily relate to net expenses attributable to corporate operations which totaled $9.9 million in the first quarter 2025, compared to $9.7 million in the prior year quarter.

 

Expenses

 

Consolidated employee costs in the first quarter 2025 increased $13.4 million (8 percent) compared to the first quarter 2024, primarily due to higher incentive compensation on overall improved revenues and increased salaries primarily due to slightly higher employee counts in our title and real estate solutions businesses. As a percentage of total operating revenues, consolidated employee costs in the first quarter 2025 improved to 31.2 percent from 32.3 percent in the prior year quarter.

 

Consolidated other operating expenses in the first quarter 2025 increased $24.0 million (18 percent), primarily due to higher real estate solutions service expenses and commercial title outside search fees driven by higher related revenues compared to the first quarter 2024. As a percentage of total operating revenues, first quarter 2025 consolidated other operating expenses increased to 27.0 percent compared to 25.6 percent from the prior year quarter, primarily due to increased real estate solutions service expenses.

 

Other

 

Net cash used by operations in the first quarter 2025 was $29.9 million, which was comparable to net cash used of $29.6 million in the first quarter 2024.

 

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First Quarter Earnings Call

 

Stewart will hold a conference call to discuss the first quarter 2025 earnings at 8:30 a.m. Eastern Time on Thursday, April 24, 2025. To participate, dial 800-267-6316 (USA) or 203-518-9783 (International) – access code STCQ125. 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 24, 2025 until midnight on May 1, 2025 by dialing (800) 938-0998 (USA) or (402) 220-1550 (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. 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-IR

 

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STEWART INFORMATION SERVICES CORPORATION

CONDENSED STATEMENTS OF INCOME

(In thousands of dollars, except per share amounts and except where noted)

 

   Quarter Ended
March 31,
 
   2025   2024 
Revenues:        
Title revenues:          
Direct operations   231,680    210,588 
Agency operations   267,518    240,772 
Real estate solutions   97,077    83,016 
Total operating revenues   596,275    534,376 
Investment income   12,656    12,901 
Net realized and unrealized gains   3,053    7,038 
    611,984    554,315 
Expenses:          
Amounts retained by agencies   221,377    199,976 
Employee costs   185,811    172,417 
Other operating expenses   160,911    136,951 
Title losses and related claims   17,702    17,383 
Depreciation and amortization   15,322    15,384 
Interest   4,961    5,058 
    606,084    547,169 
Income before taxes and noncontrolling interests   5,900    7,146 
Income tax expense   (484)   (936)
Net income   5,416    6,210 
Less net income attributable to noncontrolling interests   2,339    3,080 
Net income attributable to Stewart   3,077    3,130 
           
Net earnings per diluted share attributable to Stewart   0.11    0.11 
Diluted average shares outstanding (000)   28,341    28,027 
           
Selected financial information:          
Net cash used by operations   (29,927)   (29,588)
Other comprehensive income (loss)   6,371    (6,596)

 

First Quarter Domestic Order Counts:

Opened Orders 2025:  Jan   Feb   Mar   Total   Closed Orders 2025:  Jan   Feb   Mar   Total 
Commercial   1,336    1,364    1,628    4,328   Commercial   1,394    1,376    1,620    4,390 
Purchase   14,110    14,406    17,734    46,250   Purchase   7,784    8,562    10,434    26,780 
Refinancing   5,481    5,655    6,426    17,562   Refinancing   3,142    3,074    3,682    9,898 
Other   3,370    4,784    2,649    10,803   Other   1,413    1,507    1,685    4,605 
Total   24,297    26,209    28,437    78,943   Total   13,733    14,519    17,421    45,673 
                                            
Opened Orders 2024:  Jan   Feb   Mar   Total   Closed Orders 2024:  Jan   Feb   Mar   Total 
Commercial   1,142    1,359    1,192    3,693   Commercial   1,065    1,186    1,317    3,568 
Purchase   14,867    15,920    17,237    48,024   Purchase   8,941    9,843    10,960    29,744 
Refinancing   5,419    5,391    5,561    16,371   Refinancing   2,935    3,108    3,310    9,353 
Other   3,983    3,836    3,428    11,247   Other   2,618    2,566    2,610    7,794 
Total   25,411    26,506    27,418    79,335   Total   15,559    16,703    18,197    50,459 

 

 

 

 

STEWART INFORMATION SERVICES CORPORATION

CONDENSED BALANCE SHEETS

(In thousands of dollars)

 

   March 31,
2025
   December 31,
2024
 
Assets:          
Cash and cash equivalents   148,510    216,298 
Short-term investments   45,716    41,199 
Investments in debt and equity securities, at fair value   674,842    669,098 
Receivables – premiums from agencies   35,984    36,753 
Receivables – other   129,607    111,735 
Allowance for uncollectible amounts   (8,407)   (7,725)
Property and equipment, net   84,638    87,613 
Operating lease assets, net   99,458    102,210 
Title plants   74,955    74,862 
Goodwill   1,092,747    1,084,139 
Intangible assets, net of amortization   165,156    173,075 
Deferred tax assets   4,401    4,827 
Other assets   159,489    136,061 
    2,707,096    2,730,145 
Liabilities:          
Notes payable   445,860    445,841 
Accounts payable and accrued liabilities   198,554    214,580 
Operating lease liabilities   114,323    118,835 
Estimated title losses   510,790    511,534 
Deferred tax liabilities   29,706    28,266 
    1,299,233    1,319,056 
Stockholders’ equity:          
Common Stock and additional paid-in capital   361,741    358,721 
Retained earnings   1,078,378    1,089,484 
Accumulated other comprehensive loss   (37,026)   (43,397)
Treasury stock   (2,666)   (2,666)
Stockholders’ equity attributable to Stewart   1,400,427    1,402,142 
Noncontrolling interests   7,436    8,947 
Total stockholders’ equity   1,407,863    1,411,089 
    2,707,096    2,730,145 
           
Number of shares outstanding (000)   27,919    27,764 
Book value per share   50.16    50.50 

 

 

 

 

STEWART INFORMATION SERVICES CORPORATION

SEGMENT INFORMATION

(In thousands of dollars)

 

Quarter Ended:  March 31, 2025   March 31, 2024 
   Title   Real
Estate
Solutions
   Corporate   Total   Title   Real
Estate
Solutions
   Corporate   Total 
Revenues:                                
Operating revenues   499,198    97,077    -    596,275    451,360    83,016    -    534,376 
Investment income   12,621    35    -    12,656    12,876    25    -    12,901 
Net realized and unrealized gains (losses)   3,055    -    (2)   3,053    7,116    -    (78)   7,038 
    514,874    97,112    (2)   611,984    471,352    83,041    (78)   554,315 
Expenses:                                        
Amounts retained by agencies   221,377    -    -    221,377    199,976    -    -    199,976 
Employee costs   168,487    13,736    3,588    185,811    156,803    12,217    3,397    172,417 
Other operating expenses   86,505    72,943    1,463    160,911    77,901    57,817    1,234    136,952 
Title losses and related claims   17,702    -    -    17,702    17,383    -    -    17,383 
Depreciation and amortization   8,614    6,372    336    15,322    8,729    6,275    380    15,384 
Interest   422    2    4,537    4,961    379    -    4,679    5,058 
    503,107    93,053    9,924    606,084    461,171    76,309    9,690    547,170 
Income (loss) before taxes   11,767    4,059    (9,926)   5,900    10,181    6,732    (9,768)   7,145 

 

 

 

 

Appendix A

Non-GAAP Adjustments

 

Management 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, acquisition intangible asset amortization and other expenses (acquisition-related), 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 ended March 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 March 31, 
   2025   2024   % Chg 
Total revenues   612.0    554.3    10%
Non-GAAP revenue adjustments:               
Net realized and unrealized gains   (3.1)   (7.0)     
Adjusted total revenues   608.9    547.3    11%
                
Details of net realized and unrealized gains:               
Unrealized gains on equity securities fair value   3.2    7.2      
Gains on acquisition liability adjustments   0.2    -      
Net losses on sale of securities investments   (0.3)   (0.1)     
Other items, net   -    (0.1)     
Total net realized and unrealized gains   3.1    7.0      
                
Pretax income   5.9    7.1    (17)%
Non-GAAP pretax adjustments:               
Net realized and unrealized gains   (3.1)   (7.0)     
Acquisition intangible asset amortization and other expenses   8.3    8.5      
Office closure and severance expenses   -    0.5      
Adjusted pretax income   11.2    9.1    22%
GAAP pretax margin   1.0%   1.3%     
Adjusted pretax margin   1.8%   1.7%     

 

 

 

 

   Quarter Ended March 31, 
   2025   2024   % Chg 
Net income attributable to Stewart   3.1    3.1    0%
Non-GAAP pretax adjustments:               
Net realized and unrealized gains   (3.1)   (7.0)     
Acquisition intangible asset amortization and other expenses   8.3    8.5      
Office closure and severance expenses   -    0.5      
Net tax effects of non-GAAP adjustments   (1.4)   (0.5)     
Non-GAAP adjustments, after taxes   3.9    1.5      
Adjusted net income attributable to Stewart   7.0    4.6    51%
                
Diluted average shares outstanding (000)   28,341    28,027      
GAAP net income per share   0.11    0.11      
Adjusted net income per share   0.25    0.17      

 

    Quarter Ended March 31,  
      2025       2024       % Chg  
Title Segment:                        
                         
Total revenues     514.9       471.4       9 %
Net realized and unrealized gains     (3.1 )     (7.1 )        
Adjusted total revenues     511.8       464.2       10 %
                         
Pretax income     11.8       10.2       16 %
Non-GAAP revenue adjustments:                        
Net realized and unrealized gains     (3.1 )     (7.1 )        
Acquisition intangible asset amortization and other expenses     2.8       2.9                      
Office closure and severance expenses     -       0.5          
Adjusted pretax income     11.5       6.5       77 %
GAAP pretax margin     2.3 %     2.2 %        
Adjusted pretax margin     2.2 %     1.4 %        
                         
Real Estate Solutions Segment:                        
                         
Total revenues     97.1       83.0       17 %
                         
Pretax income     4.1       6.7       (40 )%
Non-GAAP revenue adjustment:                        
Acquisition intangible asset amortization     5.5       5.6          
Adjusted pretax income     9.6       12.3       (22 )%
GAAP pretax margin     4.2 %     8.1 %           
Adjusted pretax margin     9.9 %     14.8 %