Stewart Reports Fourth Quarter and Full Year 2024 Results

Total revenues of $665.9 million ($664.2 million on an adjusted basis) compared to $582.2 million ($577.4 million on an adjusted basis) in the prior year quarter Net income of $22.7 million ($31.5 million on an adjusted basis) compared to $8.8 million ($16.6 million on an adjusted basis) in the prior year quarter Diluted earnings per share of $0.80 ($1.12 on an adjusted basis) compared to prior year quarter diluted EPS of $0.32 ($0.60 on an adjusted basis) Full year 2024 net income of $73.3 million ($94.4 million on an adjusted basis) compared to 2023 net income of $30.4 million ($66.6 million on an adjusted basis) Full year 2024 diluted earnings per share of $2.61 ($3.35 on an adjusted basis) compared to $1.11 ($2.42 on an adjusted basis) for 2023 , /PRNewswire/ -- Stewart Information Services Corporation (NYSE: STC) today reported net income attributable to Stewart of $22.7 million ($0.80 per diluted share) for the fourth quarter 2024, compared to $8.8 million ($0.32 per diluted share) for the fourth quarter 2023. On an adjusted basis, net income for the fourth quarter 2024 was $31.5 million ($1.12 per diluted share) compared to $16.6 million ($0.60 per diluted share) in the fourth quarter 2023. Pretax income before noncontrolling interests for the fourth quarter 2024 was $35.4 million ($47.3 million on an adjusted basis) compared to $18.8 million ($29.1 million on an adjusted basis) for the fourth quarter 2023. Fourth quarter 2024 results included $1.7 million of pretax net realized and unrealized gains, primarily related to net gains from fair value changes of equity securities investments and an acquisition liability adjustment, partially offset by losses from a sale of an office and an investment impairment. Fourth quarter 2023 results included $4.8 million of pretax net realized and unrealized gains, primarily driven by net gains from fair value changes of equity securities investments and an acquisition liability adjustment. "We are pleased with our fourth quarter and full year 2024 results as they demonstrate both our progress and resilience in these continued challenging macro-housing conditions," commented Fred Eppinger, chief executive officer. "We continue to improve on our operations to win share and fortify our position and look forward to continuing to do so in 2025. We remain focused on our pursuit of growth and margin improvement across all business lines." Selected Financial InformationSummary 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 December 31, Year Ended December 31, 2024 2023 2024 2023 Total revenues 665.9 582.2 2,490.4 2,257.3 Pretax income before noncontrolling interests 35.4 18.8 114.3 60.9 Income tax expense (8.2) (5.7) (26.2) (15.3) Net income attributable to noncontrolling interests (4.5) (4.3) (14.8) (15.2) Net income attributable to Stewart 22.7 8.8 73.3 30.4 Non-GAAP adjustments, after taxes* 8.8 7.8 21.1 36.2 Adjusted net income attributable to Stewart* 31.5 16.6 94.4 66.6 Pretax margin 5.3 % 3.2 % 4.6 % 2.7 % Adjusted pretax margin* 7.1 % 5.0 % 5.8 % 4.8 % Net income per diluted Stewart share 0.80 0.32 2.61 1.11 Adjusted net income per diluted Stewart share* 1.12 0.60 3.35 2.42 * 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 SegmentSummary results of the title segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin): Quarter Ended December 31, 2024 2023 % Change Operating revenues 562.7 502.9 12 % Investment income 14.5 13.0 12 % Net realized and unrealized gains 2.8 5.1 (46 %) Pretax income 45.2 27.3 65 % Non-GAAP adjustments to pretax income* 5.3 4.0 Adjusted pretax income* 50.5 31.4 61 % Pretax margin 7.8 % 5.2 % Adjusted pretax margin* 8.8 % 6.1 % * 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 fourth quarter 2024 improved $59.8 million, or 12 percent, driven by increased revenues from our direct and agency title operations, while total segment operating expenses increased $41.0 million, or 8 percent, compared to the fourth quarter 2023. Agency retention expenses in the fourth quarter 2024 increased $13.7 million, or 6 percent, consistent with the $16.6 million, or 6 percent, increase in gross agency revenues compared to the prior year quarter. Total title segment employee costs and other operating expenses for the fourth quarter 2024 increased $27.1 million, or 11 percent, compared to the prior year quarter, primarily due to increased incentive compensation expenses related to higher title revenues, higher outside search expenses resulting from higher commercial revenues, and increased severance expenses, primarily related to an executive retirement announced in September 2024. As a percentage of operating revenues, total segment employee costs and other operating expenses slightly improved to 48.7 percent in the fourth quarter 2024 compared to 49.1 percent in the prior year quarter. Title loss expense in the fourth quarter 2024 was $20.7 million, which was comparable to the fourth quarter 2023, primarily as a result of our overall favorable claim experience offsetting the incremental title loss expense related to increased title revenues. As a percentage of title revenues, title loss expense was 3.7 percent for the fourth quarter 2024 compared to 4.1 percent in the prior year quarter. In addition to the net realized and unrealized gains presented above, non-GAAP adjustments to the title segment's pretax income for the fourth quarters 2024 and 2023 included $8.1 million and $9.1 million, respectively, of total acquisition intangible asset amortization and related expenses, executive severance expenses and office closure costs (refer to Appendix A). Direct title revenues information is presented below (dollars in millions): Quarter Ended December 31, 2024 2023 % Change Non-commercial: Domestic 162.5 153.8 6 % International 25.9 24.0 8 % 188.4 177.8 6 % Commercial: Domestic 84.1 56.1 50 % International 11.1 6.5 71 % 95.2 62.6 52 % Total direct title revenues 283.6 240.4 18 % Domestic non-commercial revenues in the fourth quarter 2024 improved by $8.7 million, or 6 percent, primarily due to increased total non-commercial domestic transactions compared to the fourth quarter 2023. Domestic commercial revenues in the fourth quarter 2024 increased by $28.0 million, or 50 percent, primarily due to a higher average transaction size and a 13 percent increase in commercial transactions compared to the prior year quarter. Fourth quarter 2024 average domestic commercial fee per file was $19,600, or 33 percent higher compared to $14,800 from the fourth quarter 2023, while average domestic residential fee per file was $2,900, or 8 percent lower compared to $3,200 from the prior year quarter, primarily due to a lower purchase transaction mix during the fourth quarter 2024. Real Estate Solutions SegmentSummary results of the real estate solutions segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin): Quarter Ended December 31, 2024 2023 % Change Operating revenues 87.0 61.4 42 % Pretax income 0.9 1.4 (34 %) Non-GAAP adjustments to pretax income* 5.5 6.0 Adjusted pretax income* 6.5 7.4 (13 %) Pretax margin 1.1 % 2.3 % Adjusted pretax margin* 7.4 % 12.0 % * Adjusted pretax income and adjusted pretax margin are non-GAAP financial measures. See Appendix A for an explanation and reconciliation of non-GAAP adjustments. Fourth quarter 2024 operating revenues increased $25.6 million, or 42 percent, primarily due to increased revenues from our credit information and valuation services operations compared to the fourth quarter 2023. On a combined basis, the segment's employee costs and other operating expenses increased $26.2 million, or 49 percent, primarily driven by higher vendor prices for credit information services and increased employee count in anticipation of new customers and related revenue. Non-GAAP adjustments to pretax income shown in the schedule above were primarily related to acquisition intangible asset amortization expenses (refer to Appendix A). Corporate SegmentThe segment's fourth quarter 2024 results included net expenses attributable to corporate operations of $9.7 million, which were comparable to the prior year quarter, and a $1.1 million unrealized loss related to an investment impairment. ExpensesConsolidated employee costs in the fourth quarter 2024 increased by $21.3 million, or 12 percent, compared to the fourth quarter 2023, primarily driven by higher incentive compensation on overall improved revenues, increased salaries primarily due to higher employee counts in commercial services and real estate solutions, and higher executive severances expenses primarily related to a title segment executive retirement announced in September 2024. As a percentage of total operating revenues, employee costs improved to 30.7 percent in the fourth quarter 2024 compared to 31.6 percent in the prior year quarter. Consolidated other operating expenses in the fourth quarter 2024 increased $31.9 million, or 25 percent, primarily driven by higher service expenses and outside search fees related to higher revenues from real estate solutions and commercial title operations, respectively, partially offset by lower office closures compared to the fourth quarter 2023. As a percentage of total operating revenues, fourth quarter 2024 total other operating expenses increased to 24.5 percent compared to 22.5 percent in the prior year quarter, primarily due to increased real estate solutions service expenses. OtherNet cash provided by operations in the fourth quarter 2024 was $68.0 million compared to $39.5 million in the fourth quarter 2023, primarily driven by the higher consolidated net income in the fourth quarter 2024. Fourth Quarter Earnings CallStewart will hold a conference call to discuss the fourth quarter 2024 earnings at 8:30 a.m. Eastern Time on Thursday, February 6, 2025. To participate, dial (800) 343-5172 (USA) or (203) 518-9856 (International) – access code STCQ424. 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 6, 2025 until midnight on February 13, 2025 by dialing (800) 753-5479 (USA) or (402) 220-2675 (International). About StewartStewart (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 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, 2023, 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, 2024. 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 STEWART INFORMATION SERVICES CORPORATION CONDENSED STATEMENTS OF INCOME (In thousands of dollars, except per share amounts and except where noted) Quarter Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Revenues: Title revenues: Direct operations 283,606 240,432 1,020,380 962,674 Agency operations 279,092 262,513 1,043,173 985,989 Real estate solutions 86,998 61,408 358,559 263,577 Total operating revenues 649,696 564,353 2,422,112 2,212,240 Investment income 14,538 13,021 55,370 45,135 Net realized and unrealized gains (losses) 1,699 4,795 12,937 (34) 665,933 582,169 2,490,419 2,257,341 Expenses: Amounts retained by agencies 230,724 217,021 864,807 813,519 Employee costs 199,418 178,084 745,405 712,794 Other operating expenses 159,071 127,171 603,959 507,701 Title losses and related claims 20,656 20,555 80,411 80,282 Depreciation and amortization 15,549 15,600 61,612 62,447 Interest 5,147 4,959 19,914 19,737 630,565 563,390 2,376,108 2,196,480 Income before taxes and noncontrolling interests 35,368 18,779 114,311 60,861 Income tax expense (8,156) (5,675) (26,155) (15,263) Net income 27,212 13,104 88,156 45,598 Less net income attributable to noncontrolling interests 4,471 4,289 14,846 15,159 Net income attributable to Stewart 22,741 8,815 73,310 30,439 Net earnings per diluted share attributable to Stewart 0.80 0.32 2.61 1.11 Diluted average shares outstanding (000) 28,277 27,751 28,129 27,520 Selected financial information: Net cash provided by operations 67,953 39,464 135,609 83,042 Other comprehensive (loss) income (19,093) 23,406 (8,182) 16,128 Fourth Quarter Domestic Order Counts: Opened Orders 2024: Oct Nov Dec Total Closed Orders 2024: Oct Nov Dec Total Commercial 1,471 1,226 1,586 4,283 Commercial 1,363 1,174 1,766 4,303 Purchase 15,852 12,224 11,323 39,399 Purchase 11,545 10,098 10,662 32,305 Refinancing 7,245 4,782 5,225 17,252 Refinancing 4,990 3,724 3,441 12,155 Other 4,076 2,239 2,090 8,405 Other 4,339 3,937 2,386 10,662 Total 28,644 20,471 20,224 69,339 Total 22,237 18,933 18,255 59,425 Opened Orders 2023: Oct Nov Dec Total Closed Orders 2023: Oct Nov Dec Total Commercial 1,031 1,335 1,381 3,747 Commercial 1,074 1,264 1,463 3,801 Purchase 16,995 14,076 11,679 42,750 Purchase 12,187 10,595 10,989 33,771 Refinancing 5,165 5,038 5,194 15,397 Refinancing 3,479 3,034 3,045 9,558 Other 1,912 1,506 3,271 6,689 Other 2,000 1,309 1,367 4,676 Total 25,103 21,955 21,525 68,583 Total 18,740 16,202 16,864 51,806 STEWART INFORMATION SERVICES CORPORATION CONDENSED BALANCE SHEETS (In thousands of dollars) December 31, 2024 December 31, 2023 Assets: Cash and cash equivalents 216,298 233,365 Short-term investments 41,199 39,023 Investments in debt and equity securities, at fair value 669,098 679,936 Receivables – premiums from agencies 36,753 38,676 Receivables – other 111,735 93,811 Allowance for uncollectible amounts (7,725) (7,583) Property and equipment, net 87,613 82,335 Operating lease assets, net 102,210 115,879 Title plants 74,862 73,359 Goodwill 1,084,139 1,072,129 Intangible assets, net of amortization 173,075 193,196 Deferred tax assets 4,827 3,776 Other assets 136,061 84,959 2,730,145 2,702,861 Liabilities: Notes payable 445,841 445,290 Accounts payable and accrued liabilities 214,580 190,054 Operating lease liabilities 118,835 135,654 Estimated title losses 511,534 528,269 Deferred tax liabilities 28,266 25,045 1,319,056 1,324,312 Stockholders' equity: Common Stock and additional paid-in capital 358,721 338,451 Retained earnings 1,089,484 1,070,841 Accumulated other comprehensive loss (43,397) (35,215) Treasury stock (2,666) (2,666) Stockholders' equity attributable to Stewart 1,402,142 1,371,411 Noncontrolling interests 8,947 7,138 Total stockholders' equity 1,411,089 1,378,549 2,730,145 2,702,861 Number of shares outstanding (000) 27,764 27,370 Book value per share 50.50 50.11 STEWART INFORMATION SERVICES CORPORATION SEGMENT INFORMATION (In thousands of dollars) Quarter Ended: December 31, 2024 December 31, 2023 Title RealEstate Solutions Corporate Total Title Real Estate Solutions Corporate Total Revenues: Operating revenues 562,698 86,998 - 649,696 502,945 61,408 - 564,353 Investment income 14,511 27 - 14,538 12,996 25 - 13,021 Net realized and unrealized gains (losses) 2,760 - (1,061) 1,699 5,094 (3) (296) 4,795 579,969 87,025 (1,061) 665,933 521,035 61,430 (296) 582,169 Expenses: Amounts retained by agencies 230,724 - - 230,724 217,021 - - 217,021 Employee costs 181,436 14,667 3,315 199,418 163,142 11,987 2,955 178,084 Other operating expenses 92,580 65,124 1,367 159,071 83,777 41,587 1,807 127,171 Title losses and related claims 20,656 - - 20,656 20,555 - - 20,555 Depreciation and amortization 8,921 6,301 327 15,549 8,819 6,401 380 15,600 Interest 420 1 4,726 5,147 378 48 4,533 4,959 534,737 86,093 9,735 630,565 493,692 60,023 9,675 563,390 Income (loss) before taxes 45,232 932 (10,796) 35,368 27,343 1,407 (9,971) 18,779 Year Ended: December 31, 2024 December 31, 2023 Title Real Estate Solutions Corporate Total Title Real Estate Solutions Corporate Total Revenues: Operating revenues 2,063,553 358,559 - 2,422,112 1,948,663 263,577 - 2,212,240 Investment income 55,256 114 - 55,370 45,028 107 - 45,135 Net realized and unrealized gains (losses) 14,146 - (1,209) 12,937 3,437 (3) (3,468) (34) 2,132,955 358,673 (1,209) 2,490,419 1,997,128 263,681 (3,468) 2,257,341 Expenses: Amounts retained by agencies 864,807 - - 864,807 813,519 - - 813,519 Employee costs 677,378 54,572 13,455 745,405 648,832 49,320 14,642 712,794 Other operating expenses 339,950 258,827 5,182 603,959 320,529 179,640 7,532 507,701 Title losses and related claims 80,411 - - 80,411 80,282 - - 80,282 Depreciation and amortization 35,047 25,104 1,461 61,612 35,000 25,802 1,645 62,447 Interest 1,584 9 18,321 19,914 1,442 239 18,056 19,737 1,999,177 338,512 38,419 2,376,108 1,899,604 255,001 41,875 2,196,480 Income (loss) before taxes 133,778 20,161 (39,628) 114,311 97,524 8,680 (45,343) 60,861 Appendix ANon-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), office closure costs, executive severance expenses, and other nonrecurring 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, 2024 and 2023 (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, 2024 2023 % Chg 2024 2023 % Chg Total revenues 665.9 582.2 14 % 2,490.4 2,257.3 10 % Non-GAAP revenue adjustments: Net realized and unrealized gains (1.7) (4.8) (12.9) - Adjusted total revenues 664.2 577.4 15 % 2,477.5 2,257.3 10 % Details of net realized and unrealized gains: Unrealized gains on equity securities fair value 1.4 3.7 12.6 2.1 Gains (losses) on acquisition liability adjustments 2.4 0.9 2.4 (2.3) Sale of offices (0.8) (0.1) (0.8) (0.1) Impairment of investments and other assets (1.1) (0.2) (1.2) (0.2) Other items, net (0.3) 0.6 0.1 0.5 Total net realized and unrealized gains 1.7 4.8 12.9 - Pretax income 35.4 18.8 88 % 114.3 60.9 88 % Non-GAAP pretax adjustments: Net realized and unrealized gains (1.7) (4.8) (12.9) - Acquisition intangible asset amortization and other expenses 8.5 8.7 33.6 36.0 Office closure costs 1.2 5.5 3.1 7.3 Executive severance expenses 3.9 0.9 4.6 3.1 State sales tax assessment expense - - - 1.2 Adjusted pretax income 47.3 29.1 63 % 142.8 108.5 32 % GAAP pretax margin 5.3 % 3.2 % 4.6 % 2.7 % Adjusted pretax margin 7.1 % 5.0 % 5.8 % 4.8 % Quarter Ended December 31, Year Ended December 31, 2024 2023 % Chg 2024 2023 % Chg Net income attributable to Stewart 22.7 8.8 158 % 73.3 30.4 141 % Non-GAAP pretax adjustments: Net realized and unrealized gains (1.7) (4.8) (12.9) - Acquisition intangible asset amortization and other expenses 8.5 8.7 33.6 36.0 Office closure costs 1.2 5.5 3.1 7.3 Executive severance expenses 3.9 0.9 4.6 3.1 State sales tax assessment expense - - - 1.2 Net tax effects of non-GAAP adjustments (3.1) (2.5) (7.4) (11.4) Non-GAAP adjustments, after taxes 8.8 7.8 21.1 36.2 Adjusted net income attributable to Stewart 31.5 16.6 90 % 94.4 66.6 42 % Diluted average shares outstanding (000) 28,277 27,751 28,129 27,520 GAAP net income per share 0.80 0.32 2.61 1.11 Adjusted net income per share 1.12 0.60 3.35 2.42 Quarter Ended December 31, Year Ended December 31, 2024 2023 % Chg 2024 2023 % Chg Title Segment: Total revenues 580.0 521.0 11 % 2,133.0 1,997.1 7 % Net realized and unrealized gains (2.8) (5.1) (14.1) (3.4) Adjusted total revenues 577.2 515.9 12 % 2,118.8 1,993.7 6 % Pretax income 45.2 27.3 65 % 133.8 97.5 37 % Non-GAAP revenue adjustments: Net realized and unrealized gains (2.8) (5.1) (14.1) (3.4) Acquisition intangible asset amortization and other expenses 3.0 2.9 11.5 12.3 Office closure costs 1.2 5.5 3.1 7.3 Executive severance expenses 3.9 0.7 4.6 2.3 Adjusted pretax income 50.5 31.4 61 % 138.9 116.0 20 % GAAP pretax margin 7.8 % 5.2 % 6.3 % 4.9 % Adjusted pretax margin 8.8 % 6.1 % 6.6 % 5.8 % Real Estate Solutions Segment: Total revenues 87.0 61.4 42 % 358.7 263.7 36 % Pretax income 0.9 1.4 (34 %) 20.2 8.7 132 % Non-GAAP revenue adjustments: Acquisition intangible asset amortization 5.5 5.8 22.2 23.7 Executive severance expenses - 0.2 - 0.3 State sales tax assessment expense - - - 1.2 Adjusted pretax income 6.5 7.4 (13 %) 42.3 33.8 25 % GAAP pretax margin 1.1 % 2.3 % 5.6 % 3.3 % Adjusted pretax margin 7.4 % 12.0 % 11.8 % 12.8 % SOURCE Stewart Information Services Corporation WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Stewart Reports Fourth Quarter and Full Year 2024 Results

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