
		Three Months Ended March 31,			Three Months Ended June 30,				Six Months Ended June 30,
				2021		2020		2021	2020	2021	2020
			($000 omitted, except per share)					($000 omitted, except per share)
Revenues	Revenues						Revenues
Title revenues:	Title revenues:						Title revenues:
Direct operations	Direct operations			279,504		198,283	Direct operations	353,502	218,214	633,007	416,496
Agency operations	Agency operations			345,932		242,030	Agency operations	390,330	277,387	736,261	519,417
Ancillary services	Ancillary services			55,931		5,461	Ancillary services	58,193	11,155	114,124	16,616
Operating revenues	Operating revenues			681,367		445,774	Operating revenues	802,025	506,756	1,483,392	952,529
Investment income	Investment income			3,945		5,218	Investment income	5,130	4,285	9,074	9,503
Net realized and unrealized gains (losses)	Net realized and unrealized gains (losses)			3,274		(11,091)	Net realized and unrealized gains (losses)	11,654	5,064	14,929	(6,027)
				688,586		439,901		818,809	516,105	1,507,395	956,005
Expenses	Expenses						Expenses
Amounts retained by agencies	Amounts retained by agencies			283,935		199,366	Amounts retained by agencies	322,020	228,720	605,955	428,086
Employee costs	Employee costs			169,397		135,652	Employee costs	188,467	137,528	357,864	273,180
Other operating expenses	Other operating expenses			125,482		71,858	Other operating expenses	137,796	74,613	263,279	146,473
Title losses and related claims	Title losses and related claims			28,773		18,632	Title losses and related claims	33,569	21,541	62,342	40,172
Depreciation and amortization	Depreciation and amortization			6,430		4,231	Depreciation and amortization	6,819	4,061	13,249	8,292
Interest	Interest			567		892	Interest	682	622	1,248	1,513
				614,584		430,631		689,353	467,085	1,303,937	897,716
Income before taxes and noncontrolling interests	Income before taxes and noncontrolling interests			74,002		9,270	Income before taxes and noncontrolling interests	129,456	49,020	203,458	58,289
Income tax expense	Income tax expense			(16,880)		(1,896)	Income tax expense	(30,616)	(11,340)	(47,496)	(13,235)
Net income	Net income			57,122		7,374	Net income	98,840	37,680	155,962	45,054
Less net income attributable to noncontrolling interests	Less net income attributable to noncontrolling interests			2,886		2,197	Less net income attributable to noncontrolling interests	4,021	3,534	6,907	5,731
Net income attributable to Stewart	Net income attributable to Stewart			54,236		5,177	Net income attributable to Stewart	94,819	34,146	149,055	39,323

Net income	Net income			57,122		7,374	Net income	98,840	37,680	155,962	45,054
Other comprehensive income (loss), net of taxes:	Other comprehensive income (loss), net of taxes:						Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments	Foreign currency translation adjustments			1,867		(11,442)	Foreign currency translation adjustments	1,379	4,194	3,246	(7,248)
Change in net unrealized gains and losses on investments	Change in net unrealized gains and losses on investments			(9,156)		(2,580)	Change in net unrealized gains and losses on investments	1,009	16,715	(8,147)	14,135
Reclassification adjustment for realized gains and losses on investments	Reclassification adjustment for realized gains and losses on investments			(145)		(80)	Reclassification adjustment for realized gains and losses on investments	(418)	(21)	(563)	(101)
Other comprehensive loss, net of taxes:				(7,434)		(14,102)
Comprehensive income (loss)				49,688		(6,728)
Other comprehensive income (loss), net of taxes:							Other comprehensive income (loss), net of taxes:	1,970	20,888	(5,464)	6,786
Comprehensive income							Comprehensive income	100,810	58,568	150,498	51,840
Less net income attributable to noncontrolling interests	Less net income attributable to noncontrolling interests			2,886		2,197	Less net income attributable to noncontrolling interests	4,021	3,534	6,907	5,731
Comprehensive income (loss) attributable to Stewart				46,802		(8,925)
Comprehensive income attributable to Stewart							Comprehensive income attributable to Stewart	96,789	55,034	143,591	46,109

Basic average shares outstanding (000)	Basic average shares outstanding (000)			26,736		23,638	Basic average shares outstanding (000)	26,798	23,656	26,767	23,647
Basic earnings per share attributable to Stewart	Basic earnings per share attributable to Stewart			2.03		0.22	Basic earnings per share attributable to Stewart	3.54	1.44	5.57	1.66
Diluted average shares outstanding (000)	Diluted average shares outstanding (000)			26,984		23,749	Diluted average shares outstanding (000)	27,123	23,756	27,038	23,757
Diluted earnings per share attributable to Stewart	Diluted earnings per share attributable to Stewart			2.01		0.22	Diluted earnings per share attributable to Stewart	3.50	1.44	5.51	1.66


		As of March 31, 2021 (Unaudited)	As of December 31, 2020		As of June 30, 2021 (Unaudited)	As of December 31, 2020
		($000 omitted)			($000 omitted)
Assets	Assets			Assets
Cash and cash equivalents	Cash and cash equivalents	412,763	432,683	Cash and cash equivalents	400,542	432,683
Short-term investments	Short-term investments	17,855	20,678	Short-term investments	17,628	20,678
Investments in debt and equity securities, at fair value	Investments in debt and equity securities, at fair value	682,799	684,387	Investments in debt and equity securities, at fair value	711,398	684,387

Receivables:	Receivables:			Receivables:
Premiums from agencies	Premiums from agencies	37,713	34,507	Premiums from agencies	46,449	34,507
Trade and other	Trade and other	63,106	56,054	Trade and other	72,061	56,054
Income taxes	Income taxes	172	501	Income taxes	2,034	501
Notes	Notes	1,531	1,557	Notes	1,461	1,557
Allowance for uncollectible amounts	Allowance for uncollectible amounts	(5,393)	(4,807)	Allowance for uncollectible amounts	(5,168)	(4,807)
		97,129	87,812		116,837	87,812
Property and equipment:	Property and equipment:			Property and equipment:
Land	Land	2,964	2,964	Land	2,964	2,964
Buildings	Buildings	22,617	22,598	Buildings	16,645	22,598
Furniture and equipment	Furniture and equipment	172,874	168,147	Furniture and equipment	181,690	168,147
Accumulated depreciation	Accumulated depreciation	(144,723)	(142,038)	Accumulated depreciation	(146,711)	(142,038)
		53,732	51,671		54,588	51,671
Operating lease assets	Operating lease assets	110,586	106,479	Operating lease assets	112,351	106,479
Title plants, at cost	Title plants, at cost	73,113	72,863	Title plants, at cost	73,113	72,863
Investments on equity method basis	Investments on equity method basis	20,537	6,765	Investments on equity method basis	22,051	6,765
Goodwill	Goodwill	480,159	431,477	Goodwill	549,991	431,477
Intangible assets, net of amortization	Intangible assets, net of amortization	38,912	37,382	Intangible assets, net of amortization	36,798	37,382
Deferred tax assets	Deferred tax assets	4,359	4,330	Deferred tax assets	4,330	4,330
Other assets	Other assets	50,862	42,048	Other assets	68,707	42,048
		2,042,806	1,978,575		2,168,334	1,978,575
Liabilities	Liabilities			Liabilities
Notes payable	Notes payable	125,572	101,773	Notes payable	127,662	101,773
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	212,774	225,180	Accounts payable and accrued liabilities	229,054	225,180
Operating lease liabilities	Operating lease liabilities	123,121	119,089	Operating lease liabilities	124,038	119,089
Estimated title losses	Estimated title losses	509,541	496,275	Estimated title losses	524,983	496,275
Deferred tax liabilities	Deferred tax liabilities	23,900	23,852	Deferred tax liabilities	26,524	23,852
		994,908	966,169		1,032,261	966,169
Contingent liabilities and commitments	Contingent liabilities and commitments	0	0	Contingent liabilities and commitments	0	0
Stockholders’ equity	Stockholders’ equity			Stockholders’ equity
Common Stock ($1 par value) and additional paid-in capital	Common Stock ($1 par value) and additional paid-in capital	300,978	301,937	Common Stock ($1 par value) and additional paid-in capital	301,251	301,937
Retained earnings	Retained earnings	733,973	688,819	Retained earnings	819,834	688,819
Accumulated other comprehensive income (loss):	Accumulated other comprehensive income (loss):			Accumulated other comprehensive income (loss):
Foreign currency translation adjustments	Foreign currency translation adjustments	(6,371)	(8,238)	Foreign currency translation adjustments	(4,992)	(8,238)
Net unrealized gains on debt securities investments	Net unrealized gains on debt securities investments	15,959	25,260	Net unrealized gains on debt securities investments	16,550	25,260

Treasury stock – 352,161 common shares, at cost	Treasury stock – 352,161 common shares, at cost	(2,666)	(2,666)	Treasury stock – 352,161 common shares, at cost	(2,666)	(2,666)
Stockholders’ equity attributable to Stewart	Stockholders’ equity attributable to Stewart	1,041,873	1,005,112	Stockholders’ equity attributable to Stewart	1,129,977	1,005,112
Noncontrolling interests	Noncontrolling interests	6,025	7,294	Noncontrolling interests	6,096	7,294
Total stockholders’ equity (26,806,025 and 26,728,242 shares outstanding)		1,047,898	1,012,406
Total stockholders’ equity (26,825,233 and 26,728,242 shares outstanding)				Total stockholders’ equity (26,825,233 and 26,728,242 shares outstanding)	1,136,073	1,012,406
		2,042,806	1,978,575		2,168,334	1,978,575


		Three Months Ended March 31,			Six Months Ended June 30,
		2021	2020		2021	2020
		($000 omitted)			($000 omitted)
Reconciliation of net income to cash provided by operating activities:	Reconciliation of net income to cash provided by operating activities:			Reconciliation of net income to cash provided by operating activities:
Net income	Net income	57,122	7,374	Net income	155,962	45,054
Add (deduct):	Add (deduct):			Add (deduct):
Depreciation and amortization	Depreciation and amortization	6,430	4,231	Depreciation and amortization	13,249	8,292
Provision for bad debt	Provision for bad debt	708	154	Provision for bad debt	846	106
Net realized and unrealized (gains) losses	Net realized and unrealized (gains) losses	(3,274)	11,091	Net realized and unrealized (gains) losses	(14,929)	6,027
Amortization of net premium on debt securities investments	Amortization of net premium on debt securities investments	938	1,144	Amortization of net premium on debt securities investments	1,904	2,253
Payments for title losses less than (in excess of) provisions		12,234	(2,809)
Payments for title losses less than provisions				Payments for title losses less than provisions	26,222	1,236
Adjustments for insurance recoveries of title losses	Adjustments for insurance recoveries of title losses	(205)	173	Adjustments for insurance recoveries of title losses	0	228
(Increase) decrease in receivables – net	(Increase) decrease in receivables – net	(3,513)	11,542	(Increase) decrease in receivables – net	(22,366)	8,792
Increase in other assets – net	Increase in other assets – net	(7,869)	(3,813)	Increase in other assets – net	(3,327)	(3,743)
Decrease in accounts payable and other liabilities – net	Decrease in accounts payable and other liabilities – net	(20,116)	(43,165)	Decrease in accounts payable and other liabilities – net	(15,390)	(22,817)
Change in net deferred income taxes	Change in net deferred income taxes	2,007	1,495	Change in net deferred income taxes	4,122	2,277
Net income from equity method investments	Net income from equity method investments	(924)	(645)	Net income from equity method investments	(3,412)	(1,356)
Dividends received from equity method investments	Dividends received from equity method investments	764	1,235	Dividends received from equity method investments	1,739	1,549
Stock-based compensation expense	Stock-based compensation expense	3,174	887	Stock-based compensation expense	5,879	2,449
Other – net	Other – net	(34)	(254)	Other – net	(47)	(237)
Cash provided (used) by operating activities		47,442	(11,360)
Cash provided by operating activities				Cash provided by operating activities	150,452	50,110
Investing activities:	Investing activities:			Investing activities:
Proceeds from sales of investments in securities	Proceeds from sales of investments in securities	3,051	11,796	Proceeds from sales of investments in securities	14,744	15,499
Proceeds from matured investments in debt securities	Proceeds from matured investments in debt securities	42,836	18,814	Proceeds from matured investments in debt securities	51,034	33,096
Purchases of investments in securities	Purchases of investments in securities	(47,881)	(30,703)	Purchases of investments in securities	(89,198)	(50,856)
Net sales (purchases) of short-term investments		2,648	2,982
Purchases of property and equipment, and real estate – net		(5,721)	(4,781)
Net sales of short-term investments				Net sales of short-term investments	2,747	2,763
Purchases of property and equipment, and real estate				Purchases of property and equipment, and real estate	(16,430)	(6,796)
Proceeds from sale of buildings				Proceeds from sale of buildings	10,583	0
Cash paid for acquisition of businesses	Cash paid for acquisition of businesses	(52,575)	(1,449)	Cash paid for acquisition of businesses	(131,906)	(33,417)
Cash paid for acquisition of equity method investment	Cash paid for acquisition of equity method investment	(16,080)	0	Cash paid for acquisition of equity method investment	(16,080)	0
Other – net	Other – net	131	38	Other – net	855	1,278
Cash used by investing activities	Cash used by investing activities	(73,591)	(3,303)	Cash used by investing activities	(173,651)	(38,433)
Financing activities:	Financing activities:			Financing activities:
Proceeds from notes payable	Proceeds from notes payable	178,975	204	Proceeds from notes payable	181,755	404
Payments on notes payable	Payments on notes payable	(154,910)	(8,223)	Payments on notes payable	(157,662)	(9,334)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	(3,844)	(3,326)	Distributions to noncontrolling interests	(7,253)	(5,957)

Repurchases of Common Stock	Repurchases of Common Stock	(1,935)	(393)	Repurchases of Common Stock	(2,002)	(468)
Proceeds from stock option exercises	Proceeds from stock option exercises	61	0	Proceeds from stock option exercises	181	0
Cash dividends paid	Cash dividends paid	(8,840)	(7,099)	Cash dividends paid	(17,688)	(14,198)

Purchase of remaining interest in consolidated subsidiary		(2,570)	0
Payment of contingent consideration related to an acquisition				Payment of contingent consideration related to an acquisition	(75)	0
Purchase of remaining interest in consolidated subsidiaries				Purchase of remaining interest in consolidated subsidiaries	(5,616)	0
Other - net	Other - net	(777)	0	Other - net	(777)	0
Cash provided (used) by financing activities		6,160	(18,837)
Cash used by financing activities				Cash used by financing activities	(9,137)	(29,553)
Effects of changes in foreign currency exchange rates	Effects of changes in foreign currency exchange rates	69	(3,510)	Effects of changes in foreign currency exchange rates	195	(1,927)
Change in cash and cash equivalents	Change in cash and cash equivalents	(19,920)	(37,010)	Change in cash and cash equivalents	(32,141)	(19,803)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	432,683	330,609	Cash and cash equivalents at beginning of period	432,683	330,609
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	412,763	293,599	Cash and cash equivalents at end of period	400,542	310,806


		Common Stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Treasury stock	Noncontrolling interests	Total		Common Stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Treasury stock	Noncontrolling interests	Total
		($000 omitted)								($000 omitted)
Three Months Ended March 31, 2021
Six Months Ended June 30, 2021									Six Months Ended June 30, 2021
Balance at December 31, 2020	Balance at December 31, 2020	27,080	274,857	688,819	17,022	(2,666)	7,294	1,012,406	Balance at December 31, 2020	27,080	274,857	688,819	17,022	(2,666)	7,294	1,012,406

Net income attributable to Stewart	Net income attributable to Stewart	—	—	54,236	—	—	—	54,236	Net income attributable to Stewart	—	—	149,055	—	—	—	149,055
Dividends on Common Stock ($0.33 per share)		—	—	(9,082)	—	—	—	(9,082)
Dividends on Common Stock ($0.66 per share)									Dividends on Common Stock ($0.66 per share)	—	—	(18,040)	—	—	—	(18,040)

Stock-based compensation	Stock-based compensation	113	3,061	—	—	—	—	3,174	Stock-based compensation	131	5,748	—	—	—	—	5,879
Stock repurchases	Stock repurchases	(37)	(1,898)	—	—	—	—	(1,935)	Stock repurchases	(39)	(1,963)	—	—	—	—	(2,002)
Stock option exercises	Stock option exercises	2	59	—	—	—	—	61	Stock option exercises	5	176	—	—	—	—	181
Purchase of remaining interest in consolidated subsidiary		—	(2,259)	—	—	—	(311)	(2,570)
Purchase of remaining interest in consolidated subsidiaries									Purchase of remaining interest in consolidated subsidiaries	—	(4,744)	—	—	—	(872)	(5,616)
Change in net unrealized gains and losses on investments, net of taxes	Change in net unrealized gains and losses on investments, net of taxes	—	—	—	(9,156)	—	—	(9,156)	Change in net unrealized gains and losses on investments, net of taxes	—	—	—	(8,147)	—	—	(8,147)
Reclassification adjustment for realized gains and losses on investments, net of taxes	Reclassification adjustment for realized gains and losses on investments, net of taxes	—	—	—	(145)	—	—	(145)	Reclassification adjustment for realized gains and losses on investments, net of taxes	—	—	—	(563)	—	—	(563)
Foreign currency translation adjustments, net of taxes	Foreign currency translation adjustments, net of taxes	—	—	—	1,867	—	—	1,867	Foreign currency translation adjustments, net of taxes	—	—	—	3,246	—	—	3,246
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	—	—	—	—	—	2,886	2,886	Net income attributable to noncontrolling interests	—	—	—	—	—	6,907	6,907
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—	—	—	—	(3,844)	(3,844)	Distributions to noncontrolling interests	—	—	—	—	—	(7,253)	(7,253)
Net effect of other changes in ownership									Net effect of other changes in ownership	—	—	—	—	—	20	20
Balance at June 30, 2021									Balance at June 30, 2021	27,177	274,074	819,834	11,558	(2,666)	6,096	1,136,073

Balance at March 31, 2021		27,158	273,820	733,973	9,588	(2,666)	6,025	1,047,898

Three Months Ended March 31, 2020
Six Months Ended June 30, 2020									Six Months Ended June 30, 2020
Balance at December 31, 2019	Balance at December 31, 2019	24,062	164,217	564,392	(2,699)	(2,666)	6,453	753,759	Balance at December 31, 2019	24,062	164,217	564,392	(2,699)	(2,666)	6,453	753,759

Net income attributable to Stewart	Net income attributable to Stewart	—	—	5,177	—	—	—	5,177	Net income attributable to Stewart	—	—	39,323	—	—	—	39,323
Dividends on Common Stock ($0.30 per share)		—	—	(7,124)	—	—	—	(7,124)
Dividends on Common Stock ($0.60 per share)									Dividends on Common Stock ($0.60 per share)	—	—	(14,291)	—	—	—	(14,291)
Stock-based compensation	Stock-based compensation	(20)	907	—	—	—	—	887	Stock-based compensation	2	2,447	—	—	—	—	2,449
Stock repurchases	Stock repurchases	(10)	(383)	—	—	—	—	(393)	Stock repurchases	(12)	(456)	—	—	—	—	(468)

Change in net unrealized gains and losses on investments, net of taxes	Change in net unrealized gains and losses on investments, net of taxes	—	—	—	(2,580)	—	—	(2,580)	Change in net unrealized gains and losses on investments, net of taxes	—	—	—	14,135	—	—	14,135
Reclassification adjustment for realized gains and losses on investments, net of taxes, net of taxes	Reclassification adjustment for realized gains and losses on investments, net of taxes, net of taxes	—	—	—	(80)	—	—	(80)	Reclassification adjustment for realized gains and losses on investments, net of taxes, net of taxes	—	—	—	(101)	—	—	(101)
Foreign currency translation adjustments, net of taxes	Foreign currency translation adjustments, net of taxes	—	—	—	(11,442)	—	—	(11,442)	Foreign currency translation adjustments, net of taxes	—	—	—	(7,248)	—	—	(7,248)
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	—	—	—	—	—	2,197	2,197	Net income attributable to noncontrolling interests	—	—	—	—	—	5,731	5,731
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—	—	—	—	(3,326)	(3,326)	Distributions to noncontrolling interests	—	—	—	—	—	(5,957)	(5,957)

Balance at March 31, 2020		24,032	164,741	562,445	(16,801)	(2,666)	5,324	737,075
Balance at June 30, 2020									Balance at June 30, 2020	24,052	166,208	589,424	4,087	(2,666)	6,227	787,332


	Common Stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Treasury stock	Noncontrolling interests	Total
	($000 omitted)
Three Months Ended June 30, 2021
Balances at March 31, 2021	27,158	273,820	733,973	9,588	(2,666)	6,025	1,047,898

Net income attributable to Stewart	—	—	94,819	—	—	—	94,819
Dividends on Common Stock ($0.33 per share)	—	—	(8,958)	—	—	—	(8,958)

Stock-based compensation	18	2,687	—	—	—	—	2,705
Stock repurchases	(2)	(65)	—	—	—	—	(67)
Stock option exercises	3	117	—	—	—	—	120
Purchase of remaining interest in consolidated subsidiaries	—	(2,485)	—	—	—	(561)	(3,046)
Change in net unrealized gains and losses on investments, net of taxes	—	—	—	1,009	—	—	1,009
Reclassification adjustment for realized gains and losses on investments, net of taxes	—	—	—	(418)	—	—	(418)
Foreign currency translation adjustments, net of taxes	—	—	—	1,379	—	—	1,379
Net income attributable to noncontrolling interests	—	—	—	—	—	4,021	4,021
Distributions to noncontrolling interests	—	—	—	—	—	(3,409)	(3,409)
Net effect of other changes in ownership	—	—	—	—	—	20	20
Balance at June 30, 2021	27,177	274,074	819,834	11,558	(2,666)	6,096	1,136,073

Three Months Ended June 30, 2020
Balances at March 31, 2020	24,032	164,741	562,445	(16,801)	(2,666)	5,324	737,075

Net income attributable to Stewart	—	—	34,146	—	—	—	34,146
Dividends on Common Stock ($0.30 per share)	—	—	(7,167)	—	—	—	(7,167)
Stock-based compensation	22	1,540	—	—	—	—	1,562
Stock repurchases	(2)	(73)	—	—	—	—	(75)

Change in net unrealized gains and losses on investments, net of taxes	—	—	—	16,715	—	—	16,715
Reclassification adjustment for realized gains and losses on investments, net of taxes, net of taxes	—	—	—	(21)	—	—	(21)
Foreign currency translation adjustments, net of taxes	—	—	—	4,194	—	—	4,194
Net income attributable to noncontrolling interests	—	—	—	—	—	3,534	3,534
Distributions to noncontrolling interests	—	—	—	—	—	(2,631)	(2,631)

Balance at June 30, 2020	24,052	166,208	589,424	4,087	(2,666)	6,227	787,332

A. Management’s responsibility. The accompanying interim financial statements were prepared by management, who is responsible for their integrity and objectivity. These financial statements have been prepared in conformity with the United States (U.S.) generally accepted accounting principles (GAAP), including management’s best judgments and estimates. In the opinion of management, all adjustments necessary for a fair presentation of this information for all interim periods, consisting only of normal recurring accruals, have been made. The Company’s results of operations for interim periods are not necessarily indicative of results for a full year and actual results could differ.

C. Restrictions on cash and investments. The Company maintains investments in accordance with certain statutory requirements for the funding of statutory premium reserves. Statutory reserve funds are required to be fully funded and invested in high-quality securities and short-term investments. Statutory reserve funds are not available for current claim payments, which must be funded from current operating cash flow. Included in investments in debt and equity securities are statutory reserve funds of approximately ~~$491.3~~$517.8 million and $496.6 million at ~~March 31,~~June 30, 2021 and December 31, 2020, respectively. In addition, included within cash and cash equivalents are statutory reserve funds of approximately ~~$25.6~~$16.6 million and $20.0 million at ~~March 31,~~June 30, 2021 and December 31, 2020, respectively. Although these cash statutory reserve funds are not restricted or segregated in depository accounts, they are required to be held pursuant to state statutes. If the Company fails to maintain minimum investments or cash and cash equivalents sufficient to meet statutory requirements, the Company may be subject to fines or other penalties, including potential revocation of its business license. These funds are not available for any other purpose. In the event that insurance regulators adjust the determination of the statutory premium reserves of the Company’s title insurers, these restricted funds as well as statutory surplus would correspondingly increase or decrease.

~~D. Amendment to line of credit agreement~~. On March 23, 2021, in relation to its line of credit facility (as disclosed in Note 10 of the 2020 Form 10-K), the Company entered into a second amendment and restated credit agreement (Second Amendment), which increased the available unsecured line of credit commitment from $200 million to $350 million, and extended the maturity of the line of credit to March 2026. Other changes that the Second Amendment made effective were: the addition of new lender banks to the lenders group, the increase of the restricted payment limitation from $40 million to $100 million, the increase of the additional unsecured indebtedness provision from $100 million to $250 million, the removal of the annual capital expenditures limit, and the new definitions of EBITDA and fixed charge coverage ratio. The additional $50 million that the Company can request in addition to the line of credit commitment was not changed.


		Three Months Ended March 31,			Three Months Ended June 30,				Six Months Ended June 30,
				2021		2020		2021	2020	2021	2020
			($000 omitted)					($000 omitted)
Title insurance premiums:	Title insurance premiums:						Title insurance premiums:
Direct	Direct			194,993		138,283	Direct	243,638	149,745	438,631	288,028
Agency	Agency			345,932		242,030	Agency	390,330	277,387	736,261	519,417
Escrow fees	Escrow fees			56,649		33,086	Escrow fees	63,534	41,433	120,183	74,519
Appraisal management, abstract and other ancillary services	Appraisal management, abstract and other ancillary services			68,620		16,077	Appraisal management, abstract and other ancillary services	80,712	22,829	149,332	38,906
Other revenues	Other revenues			15,173		16,298	Other revenues	23,811	15,362	38,985	31,659
				681,367		445,774		802,025	506,756	1,483,392	952,529


		March 31, 2021	December 31, 2020		June 30, 2021	December 31, 2020
		($000 omitted)			($000 omitted)
Investments in:	Investments in:			Investments in:
Debt securities	Debt securities	615,445	631,386	Debt securities	635,162	631,386
Equity securities	Equity securities	67,354	53,001	Equity securities	76,236	53,001
		682,799	684,387		711,398	684,387


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
		Amortized costs	Fair values	Amortized costs	Fair values		Amortized costs	Fair values	Amortized costs	Fair values
		($000 omitted)					($000 omitted)
Municipal	Municipal	42,015	44,089	45,138	47,603	Municipal	40,466	42,462	45,138	47,603
Corporate	Corporate	276,870	289,159	285,962	305,450	Corporate	291,413	305,229	285,962	305,450
Foreign	Foreign	269,792	275,585	261,748	271,711	Foreign	275,764	280,861	261,748	271,711
U.S. Treasury Bonds	U.S. Treasury Bonds	6,567	6,612	6,564	6,622	U.S. Treasury Bonds	6,570	6,610	6,564	6,622

		595,244	615,445	599,412	631,386		614,213	635,162	599,412	631,386


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
		Gains	Losses	Gains	Losses		Gains	Losses	Gains	Losses
		($000 omitted)					($000 omitted)
Municipal	Municipal	2,077	3	2,465	0	Municipal	1,997	1	2,465	0
Corporate	Corporate	13,124	835	19,594	106	Corporate	14,320	504	19,594	106
Foreign	Foreign	6,572	779	10,024	61	Foreign	5,767	670	10,024	61
U.S. Treasury Bonds	U.S. Treasury Bonds	70	25	82	24	U.S. Treasury Bonds	65	25	82	24

		21,843	1,642	32,165	191		22,149	1,200	32,165	191


		Amortized costs	Fair values		Amortized costs	Fair values
		($000 omitted)			($000 omitted)
In one year or less	In one year or less	58,344	59,145	In one year or less	59,019	59,695
After one year through five years	After one year through five years	311,487	321,937	After one year through five years	375,721	385,551
After five years through ten years	After five years through ten years	194,553	201,439	After five years through ten years	148,716	156,299
After ten years	After ten years	30,860	32,924	After ten years	30,757	33,617
		595,244	615,445		614,213	635,162


		Less than 12 months		More than 12 months		Total			Less than 12 months		More than 12 months		Total
		Losses	Fair values	Losses	Fair values	Losses	Fair values		Losses	Fair values	Losses	Fair values	Losses	Fair values
		($000 omitted)							($000 omitted)
Municipal	Municipal	3	130	0	0	3	130	Municipal	1	96	0	0	1	96
Corporate	Corporate	835	27,208	0	0	835	27,208	Corporate	504	31,489	0	0	504	31,489
Foreign	Foreign	756	65,568	23	254	779	65,822	Foreign	645	74,153	25	254	670	74,407
U.S. Treasury Bonds	U.S. Treasury Bonds	1	109	24	1,022	25	1,131	U.S. Treasury Bonds	1	109	24	1,022	25	1,131

		1,595	93,015	47	1,276	1,642	94,291		1,151	105,847	49	1,276	1,200	107,123

The number of specific debt investment holdings held in an unrealized loss position as of ~~March 31,~~June 30, 2021 was ~~47.~~51. Of these securities, 3 were in unrealized loss positions for more than 12 months. Since the Company does not intend to sell and will more likely than not maintain each investment security until its maturity or anticipated recovery in value, and no significant credit risk is deemed to exist, these investments are not considered as ~~other-than-temporarily impaired.~~credit-impaired. The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized.

As of ~~March 31,~~June 30, 2021 and December 31, 2020, Level 1 financial instruments consist of equity securities. Level 2 financial instruments consist of municipal, governmental, and corporate bonds, both U.S. and foreign. In accordance with the Company’s policies and guidelines which incorporate relevant statutory requirements, the Company’s third-party registered investment manager invests only in securities rated as investment grade or higher by the major rating services, where observable valuation inputs are significant. The fair value of the Company's investments in debt and equity securities is primarily determined using a third-party pricing service provider. The third-party pricing service provider calculates the fair values using both market approach and model valuation methods, as well as pricing information obtained from brokers, dealers and custodians. Management ensures the reasonableness of the third-party service valuations by comparing them with pricing information from the Company's investment manager.


		Three Months Ended March 31,			Three Months Ended June 30,				Six Months Ended June 30,
				2021		2020		2021	2020	2021	2020
			($000 omitted)					($000 omitted)
Realized gains	Realized gains			170		153	Realized gains	7,909	1,355	8,080	1,508
Realized losses	Realized losses			(2,469)		(690)	Realized losses	0	(657)	(2,469)	(1,347)
Net unrealized investment (losses) gains recognized on equity securities still held at end of period				5,573		(10,554)
Net unrealized investment gains (losses) recognized on equity securities still held at end of period							Net unrealized investment gains (losses) recognized on equity securities still held at end of period	3,745	4,366	9,318	(6,188)
				3,274		(11,091)		11,654	5,064	14,929	(6,027)


		Three Months Ended March 31,			Three Months Ended June 30,				Six Months Ended June 30,
				2021		2020		2021	2020	2021	2020
			($000 omitted)					($000 omitted)
Net investment gains (losses) recognized on equity securities during the period	Net investment gains (losses) recognized on equity securities during the period			5,582		(11,061)	Net investment gains (losses) recognized on equity securities during the period	3,780	3,966	9,361	(7,095)
Less: Net realized gains (losses) on equity securities sold during the period	Less: Net realized gains (losses) on equity securities sold during the period			9		(507)	Less: Net realized gains (losses) on equity securities sold during the period	35	(400)	43	(907)
Net unrealized investment gains (losses) recognized on equity securities still held at end of period	Net unrealized investment gains (losses) recognized on equity securities still held at end of period			5,573		(10,554)	Net unrealized investment gains (losses) recognized on equity securities still held at end of period	3,745	4,366	9,318	(6,188)


		Three Months Ended March 31,			Three Months Ended June 30,				Six Months Ended June 30,
				2021		2020		2021	2020	2021	2020
			($000 omitted)					($000 omitted)
Proceeds from sales of debt securities	Proceeds from sales of debt securities			115		11,503	Proceeds from sales of debt securities	11,634	3,270	14,571	14,773
Proceeds from sales of equity securities	Proceeds from sales of equity securities			2,936		293	Proceeds from sales of equity securities	59	433	173	726
Total proceeds from sales of investments in securities	Total proceeds from sales of investments in securities			3,051		11,796	Total proceeds from sales of investments in securities	11,693	3,703	14,744	15,499


		Title	Ancillary Services and Corporate	Consolidated Total		Title	Ancillary Services and Corporate	Consolidated Total
			($000 omitted)				($000 omitted)
Balances at December 31, 2020	Balances at December 31, 2020	361,433	70,044	431,477	Balances at December 31, 2020	361,433	70,044	431,477
Acquisitions	Acquisitions	32,619	20,202	52,821	Acquisitions	102,546	20,202	122,748

Purchase accounting adjustments	Purchase accounting adjustments	(4,397)	258	(4,139)	Purchase accounting adjustments	(4,492)	258	(4,234)
Balances at March 31, 2021		389,655	90,504	480,159
Balances at June 30, 2021					Balances at June 30, 2021	459,487	90,504	549,991

During the ~~first quarter~~six months ended June 30, 2021, goodwill ~~acquired~~recorded in the title segment was related to ~~an acquisition~~acquisitions of a title search and support services provider, ~~while goodwill acquired~~a digital customer engagement platform provider, and a number of title offices operating in the states of Arizona, New Mexico and Texas. Goodwill recorded in the ancillary services and corporate segment was related to an acquisition of an online notarization and closing solutions provider. The goodwill balances for ~~both~~the 2021 acquisitions were based on the Company's preliminary purchase accounting, which is expected to be finalized inwithin a year after the ~~second half of 2021.~~acquisitions closed.

NOTE 7

Estimated title losses. A summary of estimated title losses for the ~~three~~six months ended ~~March 31~~June 30 is as follows:


		2021		2020			2021		2020
		($000 omitted)					($000 omitted)
Balances at January 1	Balances at January 1	496,275		459,053		Balances at January 1	496,275		459,053
Provisions:	Provisions:					Provisions:
Current year	Current year	28,407		18,521		Current year	61,147		39,811
Previous policy years	Previous policy years	366		111		Previous policy years	1,195		361
Total provisions	Total provisions	28,773		18,632		Total provisions	62,342		40,172
Payments, net of recoveries:	Payments, net of recoveries:					Payments, net of recoveries:
Current year	Current year	(3,606)		(2,214)		Current year	(7,682)		(5,420)
Previous policy years	Previous policy years	(12,933)		(19,227)		Previous policy years	(28,438)		(33,516)
Total payments, net of recoveries	Total payments, net of recoveries	(16,539)		(21,441)		Total payments, net of recoveries	(36,120)		(38,936)

Effects of changes in foreign currency exchange rates	Effects of changes in foreign currency exchange rates	1,032		(8,662)		Effects of changes in foreign currency exchange rates	2,486		(4,264)
Balances at March 31		509,541		447,582
Balances at June 30						Balances at June 30	524,983		456,025
Loss ratios as a percentage of title operating revenues:	Loss ratios as a percentage of title operating revenues:					Loss ratios as a percentage of title operating revenues:
Current year provisions	Current year provisions	4.5	%	4.2	%	Current year provisions	4.5	%	4.3	%
Total provisions	Total provisions	4.6	%	4.2	%	Total provisions	4.6	%	4.3	%

Provisions in the first ~~quarter~~six months of 2021 increased compared to the ~~first quarter~~same period in 2020, primarily as a result of increased title ~~revenues. Claim payments in the first quarter 2021 decreased compared to the same period in 2020, primarily due to lower payments on large and non-large claims relating to prior policy years;~~revenues, while the effect of changes in foreign currency exchange rates for the first ~~quarters~~six months of 2021 and 2020 were primarily influenced by the appreciation and depreciation, respectively, of the Canadian dollar against the U.S. dollar during those periods.

Share-based payments. As part of its incentive compensation program for executives and senior management employees, the Company provides share-based awards, which include time-based restricted units, performance-based restricted stock units, and stock options. Each restricted stock unit represents a contractual right to receive a share of the Company's common stock. The time-based units vest on each of the first three anniversaries of the grant date, while the performance-based units vest upon achievement of certain financial objectives and employee service requirement over a period of approximately three years. The stock options vest on each of the first three anniversaries of the grant date at a rate of 20%, 30% and 50%, chronologically, and expire 10 years after the grant date. Each vested stock option can be exercised to purchase a share of the Company's common stock at the strike price set by the Company at the grant date. The compensation expense associated with the share-based awards is calculated based on the fair value of the related award and recognized over the corresponding vesting period.

During the first ~~quarter~~six months of 2021, the aggregate grant-date fair values of restricted stock unit and stock option awards, respectively, were ~~$8.3~~$8.9 million ~~(155,000~~(166,000 units with an average grant price per unit of ~~$53.24)~~$53.71) and $1.3 million (139,000 options with an average grant price per option of $9.24 and exercise strike price of $53.24). During the first ~~quarter~~six months of 2020, the aggregate grant-date fair values of restricted stock unit and stock option awards, respectively, were $2.4 million (60,000 units with an average grant price per unit of $39.76) and $3.4 million (650,000 options with an average grant price per option of $5.32 and exercise strike price of $39.76)~~, respectively.~~.

Earnings per share. Basic earnings per share (EPS) attributable to Stewart is calculated by dividing net income attributable to Stewart by the weighted-average number of shares of Common Stock outstanding during the reporting periods. Outstanding shares of Common Stock granted to employees that are not yet vested (restricted shares) are excluded from the calculation of the weighted-average number of shares outstanding for calculating basic EPS. To calculate diluted EPS, the number of shares is adjusted to include the number of additional shares that would have been outstanding if restricted ~~shares~~units and ~~units~~shares were vested and stock options were exercised. In periods of loss, dilutive shares are excluded from the calculation of the diluted EPS and diluted EPS is computed in the same manner as basic EPS.


		Three Months Ended March 31,			Three Months Ended June 30,				Six Months Ended June 30,
				2021		2020		2021	2020	2021	2020
			($000 omitted, except per share)					($000 omitted, except per share)
Numerator:	Numerator:						Numerator:

Net income attributable to Stewart	Net income attributable to Stewart			54,236		5,177	Net income attributable to Stewart	94,819	34,146	149,055	39,322

Denominator (000):	Denominator (000):						Denominator (000):
Basic average shares outstanding	Basic average shares outstanding			26,736		23,638	Basic average shares outstanding	26,798	23,656	26,767	23,647
Average number of dilutive shares relating to options	Average number of dilutive shares relating to options			103		0	Average number of dilutive shares relating to options	189	0	154	0
Average number of dilutive shares relating to grants of restricted units and shares	Average number of dilutive shares relating to grants of restricted units and shares			145		111	Average number of dilutive shares relating to grants of restricted units and shares	136	100	117	110
Diluted average shares outstanding	Diluted average shares outstanding			26,984		23,749	Diluted average shares outstanding	27,123	23,756	27,038	23,757

Basic earnings per share attributable to Stewart	Basic earnings per share attributable to Stewart			2.03		0.22	Basic earnings per share attributable to Stewart	3.54	1.44	5.57	1.66

Diluted earnings per share attributable to Stewart	Diluted earnings per share attributable to Stewart			2.01		0.22	Diluted earnings per share attributable to Stewart	3.50	1.44	5.51	1.66

Contingent liabilities and commitments. In the ordinary course of business, the Company guarantees the third-party indebtedness of certain of its consolidated subsidiaries. As of ~~March 31,~~June 30, 2021, the maximum potential future payments on the guarantees are not more than the related notes payable recorded in the condensed consolidated balance sheets. The Company also guarantees the indebtedness related to lease obligations of certain of its consolidated subsidiaries. The maximum future obligations arising from these lease-related guarantees are not more than the Company’s future lease obligations, as presented on the condensed consolidated balance sheets, plus lease operating expenses. As of ~~March 31,~~June 30, 2021, the Company also had unused letters of credit aggregating $4.9 million related to workers’ compensation and other insurance. The Company does not expect to make any payments on these guarantees.

Regulatory and legal developments. The Company is subject to claims and lawsuits arising in the ordinary course of its business, most of which involve disputed policy claims. In some of these lawsuits, the plaintiffs seek exemplary or treble damages in excess of policy limits. The Company does not expect that any of these ordinary course proceedings will have a material adverse effect on its consolidated financial condition or results of operations. The Company believes that it has adequate reserves for the various litigation matters and contingencies referred to in this paragraph and that the likely resolution of these matters will not materially affect its consolidated financial condition or results of operations.

Segment information. The Company reports 2 operating segments: title and ancillary services and corporate. The title segment provides services needed to transfer title to property in a real estate transaction and includes services such as searching, examining, closing and insuring the condition of the title to the property. In addition, the title segment includes home and personal insurance services, ~~and~~ Internal Revenue Code Section 1031 tax-deferred ~~exchanges.~~exchanges, and digital customer engagement platform services. The ancillary services and corporate segment includes appraisal management services, search and valuation services, and online notarization and closing solutions, which are the principal offerings of ancillary services, expenses of the parent holding company, and certain other enterprise-wide overhead costs (net of centralized administrative services costs allocated to respective operating businesses).


		Three Months Ended March 31,			Three Months Ended June 30,				Six Months Ended June 30,
				2021		2020		2021	2020	2021	2020
			($000 omitted)					($000 omitted)
Title segment:	Title segment:						Title segment:
Revenues	Revenues			632,585		434,440	Revenues	753,119	504,436	1,385,704	938,875
Depreciation and amortization	Depreciation and amortization			4,314		3,821	Depreciation and amortization	4,709	3,733	9,022	7,554
Income before taxes and noncontrolling interest	Income before taxes and noncontrolling interest			77,089		14,836	Income before taxes and noncontrolling interest	125,671	54,795	202,761	69,629

Ancillary services and corporate segment:	Ancillary services and corporate segment:						Ancillary services and corporate segment:
Revenues	Revenues			56,001		5,461	Revenues	65,690	11,669	121,691	17,130
Depreciation and amortization	Depreciation and amortization			2,116		410	Depreciation and amortization	2,110	328	4,227	738
Loss before taxes and noncontrolling interest				(3,087)		(5,566)
Income (loss) before taxes							Income (loss) before taxes	3,785	(5,775)	697	(11,340)

Consolidated Stewart:	Consolidated Stewart:						Consolidated Stewart:
Revenues	Revenues			688,586		439,901	Revenues	818,809	516,105	1,507,395	956,005
Depreciation and amortization	Depreciation and amortization			6,430		4,231	Depreciation and amortization	6,819	4,061	13,249	8,292
Income before taxes and noncontrolling interest	Income before taxes and noncontrolling interest			74,002		9,270	Income before taxes and noncontrolling interest	129,456	49,020	203,458	58,289


		Three Months Ended March 31,			Three Months Ended June 30,				Six Months Ended June 30,
				2021		2020		2021	2020	2021	2020
			($000 omitted)					($000 omitted)
United States	United States			652,582		414,128	United States	762,344	489,945	1,414,926	904,072
International	International			36,004		25,773	International	56,465	26,160	92,469	51,933
				688,586		439,901		818,809	516,105	1,507,395	956,005


		Three Months Ended March 31, 2021			Three Months Ended March 31, 2020				Three Months Ended June 30, 2021			Three Months Ended June 30, 2020
		Before-Tax Amount	Tax Expense (Benefit)	Net-of-Tax Amount	Before-Tax Amount	Tax Expense (Benefit)	Net-of-Tax Amount		Before-Tax Amount	Tax Expense (Benefit)	Net-of-Tax Amount	Before-Tax Amount	Tax Expense (Benefit)	Net-of-Tax Amount
		($000 omitted)							($000 omitted)
Net unrealized gains and losses on investments:	Net unrealized gains and losses on investments:							Net unrealized gains and losses on investments:
Change in net unrealized gains and losses on investments	Change in net unrealized gains and losses on investments	(11,589)	(2,433)	(9,156)	(3,267)	(687)	(2,580)	Change in net unrealized gains and losses on investments	1,277	268	1,009	21,159	4,444	16,715
Reclassification adjustment for realized gains and losses on investments	Reclassification adjustment for realized gains and losses on investments	(184)	(39)	(145)	(101)	(21)	(80)	Reclassification adjustment for realized gains and losses on investments	(529)	(111)	(418)	(27)	(6)	(21)
		(11,773)	(2,472)	(9,301)	(3,368)	(708)	(2,660)		748	157	591	21,132	4,438	16,694

Foreign currency translation adjustments	Foreign currency translation adjustments	2,351	484	1,867	(13,659)	(2,217)	(11,442)	Foreign currency translation adjustments	1,760	381	1,379	5,174	980	4,194

Other comprehensive loss		(9,422)	(1,988)	(7,434)	(17,027)	(2,925)	(14,102)
Other comprehensive income								Other comprehensive income	2,508	538	1,970	26,306	5,418	20,888


	Six Months Ended June 30, 2021			Six Months Ended June 30, 2020
	Before-Tax Amount	Tax Expense (Benefit)	Net-of-Tax Amount	Before-Tax Amount	Tax Expense (Benefit)	Net-of-Tax Amount
	($000 omitted)
Net unrealized gains and losses on investments:
Change in net unrealized gains and losses on investments	(10,312)	(2,165)	(8,147)	17,892	3,757	14,135
Reclassification adjustment for realized gains and losses on investments	(713)	(150)	(563)	(128)	(27)	(101)
	(11,025)	(2,315)	(8,710)	17,764	3,730	14,034

Foreign currency translation adjustments	4,111	865	3,246	(8,485)	(1,237)	(7,248)

Other comprehensive income (loss)	(6,914)	(1,450)	(5,464)	9,279	2,493	6,786

~~First~~Second quarter 2021 overview. We reported net income attributable to Stewart ~~for the first quarter 2021~~ of ~~$54.2~~$94.8 million ($~~2.01~~3.50 per diluted share), for the second quarter 2021, compared to net income attributable to Stewart of ~~$5.2~~$34.1 million ($~~0.22~~1.44 per diluted share) for the ~~first~~second quarter 2020. Excluding net realized and unrealized gains and losses and severance expenses described below, Stewart’s ~~first~~second quarter 2021 net income of ~~$51.7~~$86.0 million ($~~1.92~~3.17 per diluted share) increased ~~$38.4~~$53.5 million, or ~~289%~~165%, from ~~$13.3~~$32.5 million ($~~0.56~~1.37 per diluted share) in the ~~first~~second quarter 2020. ~~First~~Second quarter 2021 pretax income before noncontrolling interests was ~~$74.0~~$129.5 million compared to pretax income before noncontrolling interests of ~~$9.3~~$49.0 million for the ~~first~~second quarter 2020.

~~First~~Second quarter 2021 results included ~~$3.3~~$11.7 million of pretax net realized and unrealized gains, ~~primarily related to~~which included $7.3 million of realized gains from sales of buildings in the ancillary services and corporate segment and $3.7 million of net unrealized gains on fair value changes of equity securities investments recorded in the title segment. ~~First~~Second quarter 2020 results included ~~$11.1~~$5.1 million of pretax net realized and unrealized ~~losses,~~gains, which included ~~$10.6~~$4.4 million of net unrealized ~~losses~~gains on fair value changes of equity securities investments recorded in the title segment, and $2.8 million of severance expenses related to cost savings initiatives recorded within employee costs in the title segment.


		For the Three Months Ended March 31,						For the Three Months Ended June 30,
		2021		2020		% Change				2021		2020		% Change

Operating revenues	Operating revenues	625.4		440.3		42	%		Operating revenues	743.8		495.6		50	%
Investment income	Investment income	3.9		5.2		(24)	%		Investment income	5.1		4.3		20	%
Net realized and unrealized gains (losses)		3.2		(11.1)		129	%
Net realized and unrealized gains									Net realized and unrealized gains	4.2		4.6		(9)	%
Pretax income	Pretax income	77.1		14.8		420	%		Pretax income	125.7		54.8		129	%
Pretax margin	Pretax margin	12.2	%	3.4	%				Pretax margin	16.7	%	10.9	%

~~Title~~Pretax income for the title segment ~~pretax income improved~~increased by ~~$62.3~~$70.9 million, ~~or 420%,~~ while pretax margin ~~increased 880~~improved 580 basis points to ~~12.2%~~16.7% in the ~~first~~second quarter 2021 compared to the prior year quarter. Title operating revenues ~~grew $185.1~~increased $248.2 million, ~~or 42%,~~ as ~~a result of improvements in~~ direct title ~~revenues of $81.2 million, or 41%,~~ and gross independent agency revenues ~~of $103.9~~grew $135.3 million, or ~~43%. Consistent~~62%, and $112.9 million, or 41%, respectively. In line with the increased title revenues, overall segment operating expenses in the second quarter 2021 increased ~~$135.9~~$177.8 million, or ~~32%~~40%, ~~in the first quarter 2021, with~~which included 41% and 37% higher agency retention expenses and combined title employee costs and other operating expenses, ~~increasing 42% and 21%,~~ respectively, ~~from~~compared to the ~~first~~second quarter 2020. Average independent agency remittance rate ~~improved to 17.9%~~ in the ~~first~~second quarter 2021 ~~compared~~was 17.5%, similar to ~~17.6% in~~ the prior year quarter, while combined title employee costs and other operating expenses, as a percentage of title revenues, improved to ~~38.1%~~35.9% in the ~~first~~second quarter 2021 ~~from 44.9%~~compared to 39.5% in the ~~first~~second quarter 2020.

The segment’s investment income ~~decreased $1.3~~increased $0.8 million, ~~or 24%,~~ primarily ~~as a result of~~due to higher dividend income on cost-basis investments, which was partially offset by reduced interest income resulting from lower interest rates applicable to our short-term and securities investments during the ~~first~~second quarter 2021 compared to ~~the first quarter 2020.~~last year’s quarter. Net realized and unrealized gains ~~and losses~~ for the ~~first~~second quarters 2021 and 2020 ~~consisted~~were primarily ~~of net~~driven by unrealized ~~gains and losses related to~~ fair value changes of equity securities investments, as mentioned above.

~~Direct title revenues (refer to schedule in~~ ~~Results of Operations - Title Revenues section~~) increased in the first quarter 2021, primarily driven by the $92.9 million, or 61%, growth in non-commercial revenues resulting from increased transactions from both existing and recently-acquired title offices. Total residential purchase and refinancing closed orders in the first quarter 2021 increased 35% and 107%, respectively, compared to the prior year quarter. However, the non-commercial revenue increase was partially offset by lower commercial revenues in the first quarter 2021, resulting from lower commercial transaction size and volume compared to the first quarter 2020. Domestic commercial fee per file in the first quarter 2021 was approximately $8,700, compared to $11,400 from the first quarter 2020; while domestic residential fee per file was approximately $1,900, which is 5% lower than the prior year quarter’s average fee per file, primarily due to the higher mix of refinancing compared to purchase transactions in the first quarter 2021. Total international revenues increased $10.2 million, or 42%, primarily due to higher volumes in our Canadian operations.


		For the Three Months Ended March 31,				For the Three Months Ended June 30,
		2021	2020	% Change				2021	2020	% Change

Operating revenues	Operating revenues	55.9	5.5	924	%		Operating revenues	58.2	11.2	422	%

Pretax loss		(3.1)	(5.6)	45	%
Net realized gains							Net realized gains	7.5	0.5	1,359	%
Pretax income (loss)							Pretax income (loss)	3.8	(5.8)	166	%

The segment’s operating revenues increased ~~$50.5~~$47.0 million in the ~~first~~second quarter 2021, compared to the prior year quarter, primarily due to revenues generated by recent ~~acquisitions.~~acquisitions, which were partially offset by lower revenues from our legacy valuation services business due to lower home equity volume. The ancillary services operations generated pretax income of ~~$2.7~~$2.2 million (which included ~~$1.7~~$1.6 million of purchased intangibles amortization) in the ~~first~~second quarter 2021, compared to a pretax loss of ~~$0.5~~$0.8 million in the ~~prior year quarter.~~second quarter 2020. Net realized gains during the second quarter 2021 were primarily driven by $7.3 million of realized gains resulting from sales of buildings within corporate operations. Net expenses attributable to parent company and corporate operations for the ~~first~~second quarters 2021 and 2020 were approximately ~~$5.7~~$5.9 million and ~~$5.1~~$5.5 million, respectively.

We continue to implement our strategy of improving operational performance through targeted growth, focused management, and broader technology and services offerings. We aim to gain scale in attractive direct markets and improve service and digital capabilities to provide a seamless customer experience. During the ~~first~~second quarter 2021, we acquired ~~A.S.K. Services, Inc.,~~Cloudvirga, a provider of a digital customer engagement platform, and title ~~search~~companies Thomas Title & Escrow and ~~support services provider, consistent~~Prima Title, LLC with ~~our plan to strengthen~~combined operations in the states of Arizona, New Mexico and expand title production resources for our independent agency partners; while our acquisition of Signature Closers, LLC, an online notarization and closing solutions provider, further advances our digital strategy and vision of streamlining closings, while providing a best-in-class customer experience.Texas. We expect these acquisitions to further leverage our position in the evolving real estate closing experience and improve scale and synergies within our title ~~and ancillary services businesses.~~business. We believe our solid operating results and liquidity position will allow us to continue investing and growing to maximize our operational potential.

COVID-19 pandemic. We continue to operate under our business continuity plan that we deployed in March 2020 when the pandemic started. ~~While the distribution of vaccines is ramping up and states and certain businesses have reopened, our~~Our employees have not fully transitioned back to the ~~workplace. We continue to take~~workplace and we are still implementing appropriate measures to protect the safety of all our employees and customers in carrying out our business operations ~~which is generally considered~~(considered as essential business in the U.S. ~~We are proactively taking advantage of~~) using digital tools and innovative solutions, ~~in facilitating real estate transactions~~ when ~~possible during this challenging environment. Currently,~~possible. As various states have opened up and relaxed or removed restrictions on businesses and social gatherings, we are ~~gathering information and insight~~formulating a plan of safe return to workplace to be announced at a later time. We are taking into account insights gathered from our associates, ~~monitoring the evolving effects of the COVID-19 pandemic and~~recommendations from managers, guidance from health and governmental bodies, and ~~evaluating~~developments relating to the ~~next phase of our return to workplace approach.~~COVID-19 pandemic.

Operations. Our primary business is title insurance and settlement-related services. We close transactions and issue title policies on homes, commercial and other real properties located in all 50 states, the District of Columbia and international markets through policy-issuing offices, agencies and centralized title services centers. Our ancillary services and corporate segment includes our parent holding company expenses and certain enterprise-wide overhead costs, along with our ancillary services operations, which are principally appraisal management services, online notarization and closing services, and search and valuation services.

Premiums are determined in part by the values of the transactions we handle. To the extent inflation or market conditions cause increases in the prices of homes and other real estate, premium revenues are also increased. Conversely, falling home prices cause premium revenues to decline. As an overall guideline, a 5% change in median home prices results in an approximately 3.7% change in title premiums. Home price changes may override the seasonal nature of the title insurance business. Historically, our first quarter is the least active in terms of title insurance revenues as home buying is generally depressed during winter months. Our second and third quarters are the most active as the summer is the traditional home buying season, and while commercial transaction closings are skewed to the end of the year, individually large commercial transactions can occur any time of year. On average, refinance title premium rates are 60% of the premium rates for a similarly priced sale transaction.

Operating environment. Existing home sales (seasonally-adjusted basis) in ~~March~~June 2021 ~~fell 4%~~improved 23% from ~~February~~June 2020 and also increased 1% from May 2021 ~~marking two~~after four consecutive month of declines, according to NAR. The increased sales are primarily due to modestly improved supply in recent months ~~of consecutive declines, but grew 12% compared to March 2020.~~resulting from more housing starts and existing homeowners listing their homes. According to ~~NAR, consumers are facing much higher homes prices, rising mortgage rates, and falling affordability and inventory, which all contributed~~NAR's analysis, the current existing home sales continue to run at a pace above the ~~lower existing homes sales in March 2021 versus earlier months.~~rate seen before the COVID-19 pandemic. On non-seasonally-adjusted basis, existing home sales in the ~~first~~second quarter 2021 improved ~~14%~~32% from the same quarter last ~~year.~~ year, while June~~March~~ 2021 median and average home prices increased approximately ~~17%~~23% and ~~12%~~16%, respectively, compared to ~~March~~June 2020 prices, with ~~March~~June 2021 being the ~~109th~~112th consecutive month of year-over-year median home price increase. In ~~regard~~relation to new residential construction, U.S. housing starts in ~~March~~June 2021 improved ~~37%~~29% and 6% from ~~March~~June 2020 and ~~19% sequentially from February~~May 2021, respectively, while newly issued building permits in ~~March~~June 2021 ~~also improved 30% and 3%~~increased 23% from ~~March 2020 and February 2021, respectively.~~a year ago, but decreased 5% sequentially from May 2021.

~~For~~during the second quarter 2021 ~~Fannie Mae~~improved 11% to approximately $1.1 trillion compared to the second quarter 2020, as a result of a 35% increase in purchase originations, which was partially offset by 2% lower refinancing originations. Refinancing transactions, which significantly improved in 2020 as a result of lower mortgage interest rates due to the COVID-19 pandemic, are expected to normalize to pre-pandemic levels as interest rates gradually increase and ~~MBA are forecasting that~~lenders focus on purchase transactions. This trend is expected to result in 34% and 48% lower total mortgage originations in the third and fourth quarters of 2021, respectively, compared to same quarters in 2020.

Despite the current strong demand for housing, existing and new home sales ~~will improve 43% and 28%, respectively, compared to last year's second quarter. Total mortgage originations~~ for the ~~second~~third quarter 2021 are expected to decline 3%5% and 7%, respectively, compared to the ~~second~~third quarter 2020, primarily due to ~~last year's surge in refinancing transactions resulting from lower interest rates~~low inventories and ~~expectations~~softening pace of ~~lower refinancing transactions in 2021 as interest rates are beginning~~new construction due to ~~gradually increase. However, purchase lending transactions are predicted~~supply constraints. The strong housing demand with a lack of supply is primarily contributing to ~~improve 41%~~the rapid home price gains observed over the past year, which Fannie Mae forecasts to continue in the second quarter 2021 compared to last year's second quarter, partially offsetting the impact of reduced refinancing lending volumes. Compared to 2.95% in 2020, the average 30-year fixed mortgage interest rate is expected to increase to 3.35% in 2021.near term.


		Three Months Ended March 31,			Three Months Ended June 30,								Six Months Ended June 30,
				2021		2020		Change	% Change			2021	2020		Change	% Change		2021	2020	Change	% Change
			($ in millions)				($ in millions)							($ in millions)
Non-commercial	Non-commercial										Non-commercial
Domestic	Domestic			216.0		132.8		83.2	63	%	Domestic	239.0	162.7		76.3	47	%	453.2	295.6	157.6	53	%
International	International			28.8		19.1		9.7	51	%	International	51.4	20.9		30.5	146	%	80.2	40.0	40.2	101	%
				244.8		151.9		92.9	61	%		290.4	183.6		106.8	58	%	533.4	335.6	197.8	59	%
Commercial:	Commercial:										Commercial:
Domestic	Domestic			29.2		41.4		(12.2)	(29)	%	Domestic	60.5	30.7		29.8	97	%	91.5	72.0	19.5	27	%
International	International			5.5		5.0		0.5	10	%	International	2.6	3.9		(1.3)	(33)	%	8.1	8.9	(0.8)	(9)	%
				34.7		46.4		(11.7)	(25)	%		63.1	34.6		28.5	82	%	99.6	80.9	18.7	23	%
Total direct title revenues	Total direct title revenues			279.5		198.3		81.2	41	%	Total direct title revenues	353.5	218.2		135.3	62	%	633.0	416.5	216.5	52	%

Direct title revenues increased in the second quarter and first six months of 2021 compared to the same periods in 2020, as a result of overall revenue improvements in both non-commercial and commercial operations. Non-commercial revenues improved, primarily driven by increased transactions from both existing and recently-acquired title offices, with combined residential purchase and refinancing closed orders increasing 26% and 44% in the second quarter and first six months of 2021, respectively, compared to the same periods in 2020. Commercial revenues also increased in the second quarter and first six months of 2021, primarily due to growth in commercial transaction size and volume. Domestic commercial fees per file in the second quarter and first six months of 2021 were approximately $12,600 and $11,000, respectively, which were 28% and 3% higher, respectively, compared to the same periods in 2020. Residential fees per file in the second quarter and first six months of 2021 were approximately $2,100 and $2,000, respectively, which were 15% and 6% higher, respectively, compared to the same periods in 2020. Total international revenues in the second quarter and first six months of 2021 increased $29.2 million, or 118%, and $39.4 million, or 81%, respectively, primarily due to improved volumes in our Canadian operations and the stronger average Canadian dollar exchange rate against the U.S. dollar in the second quarter and first six months of 2021 compared to the same periods last year.

Direct title revenues improved in the first quarter 2021, compared to last year's first quarter, primarily driven by the $92.9 million, or 61%, increase in non-commercial revenues resulting from increased transactions from both existing and recently-acquired title offices. Total residential purchase and refinancing closed orders in the first quarter 2021 increased 35% and 107%, respectively, compared to the prior year quarter. However, the non-commercial revenue increase was partially offset by lower commercial revenues in the first quarter 2021, resulting from lower commercial transaction size and volume compared to the first quarter 2020. Domestic commercial fee per file in the first quarter 2021 was approximately $8,700, compared to $11,400 from the first quarter 2020; while domestic residential fee per file was approximately $1,900, which is 5 percent lower than the prior year quarter’s average fee per file, primarily due to the higher mix of refinancing compared to purchase transactions in the first quarter 2021. Total international revenues increased $10.2 million, or 42%, primarily due to higher volumes in our Canadian operations.


		Three Months Ended March 31,			Three Months Ended June 30,							Six Months Ended June 30,
			2021	2020		Change	% Change			2021	2020	Change	% Change		2021	2020	Change	% Change
Opened Orders:	Opened Orders:								Opened Orders:
Commercial	Commercial		3,569	4,153		(584)	(14)	%	Commercial	5,594	3,425	2,169	63	%	9,163	7,578	1,585	21	%
Purchase	Purchase		70,789	53,636		17,153	32	%	Purchase	76,418	56,920	19,498	34	%	147,207	110,556	36,651	33	%
Refinance	Refinance		81,750	64,189		17,561	27	%	Refinance	59,607	72,306	(12,699)	(18)	%	141,357	136,495	4,862	4	%
Other	Other		1,810	730		1,080	148	%	Other	1,682	496	1,186	239	%	3,492	1,226	2,266	185	%
Total	Total		157,918	122,708		35,210	29	%	Total	143,301	133,147	10,154	8	%	301,219	255,855	45,364	18	%

Closed Orders:	Closed Orders:								Closed Orders:
Commercial	Commercial		3,377	3,628		(251)	(7)	%	Commercial	4,955	3,122	1,833	59	%	8,332	6,750	1,582	23	%
Purchase	Purchase		45,483	33,715		11,768	35	%	Purchase	58,599	37,407	21,192	57	%	104,082	71,122	32,960	46	%
Refinance	Refinance		65,666	31,746		33,920	107	%	Refinance	52,539	51,133	1,406	3	%	118,205	82,879	35,326	43	%
Other	Other		1,175	444		731	165	%	Other	1,096	317	779	246	%	2,271	761	1,510	198	%
Total	Total		115,701	69,533		46,168	66	%	Total	117,189	91,979	25,210	27	%	232,890	161,512	71,378	44	%

Gross revenues ~~from~~from independent agency operations increased ~~$103.9~~$112.9 million, or ~~43%~~41%, in the second quarter 2021 and increased $216.8 million, or 42%, in the first ~~quarter~~six months of 2021, compared to ~~last year's first quarter,~~same periods in 2020, which was consistent with the improved real estate market trends in ~~the first quarter~~ 2021 and the continued return of agents to Stewart after the termination of the proposed merger in the third quarter 2019. Agency revenues, net of retention, ~~increased $19.3~~improved $19.6 million, or ~~45%~~40%, and $39.0 million, or 43%, in the second quarter and first ~~quarter~~six months of 2021, respectively, compared to the same ~~period in 2020,~~periods last year, generally in line with ~~the~~increased gross agency ~~revenue change.~~revenues. Refer further to the "Retention by agencies" discussion under Expenses below.


		Three Months Ended March 31,				Three Months Ended June 30,									Six Months Ended June 30,
				2021			2020		Change	% Change			2021		2020			Change	% Change		2021		2020		Change	% Change
			($ in millions)					($ in millions)									($ in millions)

Amounts retained by agencies	Amounts retained by agencies			283.9			199.4		84.6	42	%	Amounts retained by agencies	322.0		228.7			93.3	41	%	606.0		428.1		177.9	42	%
As a % of agency revenues	As a % of agency revenues			82.1	%		82.4	%				As a % of agency revenues	82.5	%	82.5	%					82.3	%	82.4	%
Employee costs	Employee costs			169.4			135.7		33.7	25	%	Employee costs	188.5		137.5			50.9	37	%	357.9		273.2		84.7	31	%
As a % of operating revenues	As a % of operating revenues			24.9	%		30.4	%				As a % of operating revenues	23.5	%	27.1	%					24.1	%	28.7	%
Other operating expenses	Other operating expenses			125.5			71.9		53.6	75	%	Other operating expenses	137.8		74.6			63.2	85	%	263.3		146.5		116.8	80	%
As a % of operating revenues	As a % of operating revenues			18.4	%		16.1	%				As a % of operating revenues	17.2	%	14.7	%					17.7	%	15.4	%
Title losses and related claims	Title losses and related claims			28.8			18.6		10.1	54	%	Title losses and related claims	33.6		21.5			12.0	56	%	62.3		40.2		22.2	55	%
As a % of title revenues	As a % of title revenues			4.6	%		4.2	%				As a % of title revenues	4.5	%	4.3	%					4.6	%	4.3	%

Retention by agencies. ~~Amounts~~Amounts retained by title agencies are based on agreements between agencies and our title underwriters. Amounts retained by independent agencies, as a percentage of revenues generated by them, averaged ~~82.1% for~~82.5% and 82.3% in the second quarter and first ~~quarter~~six months of 2021, respectively, as compared to 82.5% and 82.4% in the ~~first quarter~~same periods in 2020. The average retention percentage may vary from period to period due to the geographical mix of agency operations, the volume of title revenues and, in some states, laws or regulations. Due to the variety of such laws or regulations, as well as competitive factors, the average retention rate can differ significantly from state to state. In addition, a high proportion of our independent agencies are in states with retention rates greater than 80%. We continue to focus on increasing profit margins in every state, increasing premium revenue in states where remittance rates are above 20%, and maintaining the quality of our agency network, which we believe to be the industry’s best, in order to mitigate claims risk and drive consistent future performance. While market share is important in our agency operations channel, it is not as important as margins, risk mitigation and profitability.

Employee costs. Consolidated employee costs in the second quarter and first six months of 2021 increased ~~$33.7~~$50.9 million, or ~~25%~~37%, ~~in the first quarter 2021,~~and $84.7 million, or 31%, respectively, compared to the same ~~period~~periods in 2020, primarily due to higher salaries expense driven by ~~a 12%~~21% and 17%, respectively, higher average employee count, increased incentive compensation on improved overall operating results, and additional employee costs related to higher order volumes. As a percentage of total operating revenues, consolidated employee costs improved to ~~24.9%~~23.5% and 24.1% in the second quarter and first ~~quarter~~six months of 2021, ~~from 30.4%~~respectively, compared to 27.1% and 28.7% in the ~~prior year~~second quarter ~~which was~~and first six months of 2020, respectively, primarily influenced by our continued focus on managing operating costs.

Employee costs in the title segment increased ~~$28.8~~$45.9 million, or ~~22%~~35%, and $74.7 million, or 28%, in the second quarter and first ~~quarter~~six months of 2021, respectively, compared to the ~~first quarter~~same periods in 2020, primarily due to increased salaries expense driven by a higher average employee ~~count,~~counts, mostly from recent title office acquisitions, increased incentive compensation on improved title operating results, and additional employee costs related to higher order volumes. Employee costs in the ancillary services and corporate segment increased ~~$4.9~~$5.0 million, or ~~98%~~90%, and $10.0 million, or 94%, in the second quarter and first ~~quarter~~six months of 2021, respectively, compared to the ~~first quarter~~same periods in 2020, primarily due to increased average employee ~~count~~counts driven by recent acquisitions in the ancillary services operations.

Other operating expenses. Other operating expenses include costs that are fixed in nature, costs that follow, to varying degrees, changes in transaction volumes and revenues (variable costs) and costs that fluctuate independently of revenues (independent costs). Costs that are fixed in nature include attorney and professional fees, third-party outsourcing provider fees, equipment rental, insurance, rent and other occupancy expenses, repairs and maintenance, technology costs, telecommunications and title plant expenses. Variable costs include appraiser and ~~notary~~service expenses related to ancillary services operations, outside search and valuation fees, attorney fee splits, bad debt expenses, copy supplies, delivery fees, postage, premium taxes and title plant maintenance expenses. Independent costs include general supplies, litigation defense, business promotion and marketing and travel.

Consolidated other operating expenses increased ~~$53.6~~$63.2 million, or ~~75%~~85%, and $116.8 million, or 80%, in the second quarter and first ~~quarter~~six months of 2021, respectively, compared to last year's first quarter. This increase was primarily due to increased appraisal and notary expenses by recently-acquired ancillary services businesses, higher outside title search and premium tax expenses on higher title revenues, and increased professional fees and rent expenses, partially offset by lower travel and marketing expenses. As a percentage of total operating revenues, consolidated other operating expenses for the ~~first quarter 2021 increased to 18.4% compared to 16.1%~~same periods in ~~the first quarter~~ 2020, primarily ~~due to appraisal and notary costs related to our recently acquired ancillary services businesses.~~

as a result of recently-acquired businesses in 2021. Total variable costs increased ~~$45.3~~$50.0 million, or ~~142%~~133%, and $95.3 million, or 137%, in the second quarter and first ~~quarter~~six months of 2021, ~~compared to the same period in 2020,~~respectively, mainly due to higher appraisal and ~~notary~~service expenses by recently-acquired ancillary services businesses, and increased outside search and premium taxes consistent with higher title operating revenues. Total costs that are fixed in nature increased ~~$6.3~~$8.4 million, or ~~20%~~27%, and $14.6 million, or 23%, in the second quarter and first ~~quarter~~six months of 2021, ~~compared to the same period in 2020,~~respectively, primarily due to increased professional fees, rent ~~expense~~and occupancy expenses and technology costs. Independent costs increased ~~$2.0~~$5.6 million, or ~~25%~~111%, and $7.7 million, or 58%, in the second quarter and first six months of 2021, respectively, primarily due to higher bank fees, litigation-related accruals, office closures expenses and charitable contributions. As a percentage of total operating revenues, consolidated other operating expenses in the second quarter and first six months of 2021 increased to 17.2% and 17.7%, respectively, compared to 14.7% and 15.4% in the same ~~period~~periods in 2020, primarily due to ~~higher office closures~~appraisal and service expenses ~~litigation-related accruals and bank fees, partially offset by lower travel and marketing expenses.~~related to our recently-acquired ancillary services businesses.

Title losses. Provisions for title losses, as a percentage of title operating revenues, were 4.5% and 4.6% infor the second quarter and first ~~quarter~~six months of 2021, respectively, compared to ~~4.2% in~~4.3% for both the second quarter and first ~~quarter~~six months of 2020. Title loss expense increased ~~$10.1~~$12.0 million ~~or 54%,~~and $22.2 million in the second quarter and first ~~quarter~~six months of 2021, respectively, compared to the ~~prior year quarter,~~same periods in 2020, primarily as a result of increased title revenues. The title loss ratio in any given quarter can be significantly influenced by changes in new large claims incurred, escrow losses and adjustments to reserves for existing large claims.


		Three Months Ended March 31,			Three Months Ended June,								Six Months Ended June,
				2021		2020		Change	% Change			2021	2020	Change	% Change		2021	2020	Change	% Change
			($ in millions)				($ in millions)							($ in millions)
Provisions – known claims:	Provisions – known claims:										Provisions – known claims:
Current year	Current year			2.2		1.3		0.9	69	%	Current year	4.3	3.4	0.9	26	%	6.5	4.6	1.9	41	%
Prior policy years	Prior policy years			13.3		12.6		0.7	6	%	Prior policy years	14.4	15.6	(1.2)	(8)	%	27.7	28.1	(0.4)	(1)	%
				15.5		13.9		1.6	12	%		18.7	19.0	(0.3)	(2)	%	34.2	32.7	1.5	5	%
Provisions – IBNR	Provisions – IBNR										Provisions – IBNR
Current year	Current year			26.2		17.2		9.0	52	%	Current year	28.5	17.9	10.6	59	%	54.6	35.2	19.4	55	%
Prior policy years	Prior policy years			0.4		0.1		0.3	300	%	Prior policy years	0.8	0.2	0.6	300	%	1.2	0.4	0.8	200	%
				26.6		17.3		9.3	54	%		29.3	18.1	11.2	62	%	55.8	35.6	20.2	57	%
Transferred from IBNR to known claims	Transferred from IBNR to known claims			(13.3)		(12.6)		(0.7)	6	%	Transferred from IBNR to known claims	(14.4)	(15.6)	1.2	(8)	%	(27.7)	(28.1)	0.4	(1)	%
Total provisions	Total provisions			28.8		18.6		10.2	55	%	Total provisions	33.6	21.5	12.0	56	%	62.3	40.2	22.2	55	%

Provisions for known claims arise primarily from prior policy years as claims are not typically reported until several years after policies are issued. Provisions - Incurred But Not Reported (IBNR) are estimates of claims expected to be incurred over the next 20 years; therefore, it is not unusual or unexpected to experience changes to those estimated provisions in both current and prior policy years as additional loss experience on policy years is obtained. This loss experience may result in changes to our estimate of total ultimate losses expected (i.e., the IBNR policy loss reserve). Current year provisions - IBNR are recorded on policies issued in the current year as a percentage of premiums earned (provisioning rate). As claims become known, provisions are reclassified from IBNR to known claims. Adjustments relating to large losses (those individually in excess of $1.0 million) may impact provisions either for known claims or for IBNR.

Total known claims provisions increased $1.6 million, or 12%, in the first quarter 2021 compared to the same period last year, primarily as a result of higher reported claims relating to current and prior year policies. Current year IBNR provisions in the second quarter and first ~~quarter~~six months of 2021 increased ~~$9.0~~$10.6 million, or ~~52%~~59%, and $19.4 million, or 55%, respectively, compared to the ~~first quarter 2020,~~same periods in 2020, primarily due to increased title premiums in 2021. As a percentage of title operating revenues, provisions - IBNR for the current policy year were ~~4.2%~~3.8% and 4.0% in the second quarter and first ~~quarter~~six months of 2021, respectively, compared to ~~with 3.9%~~3.6% and 3.8% in the second quarter and first ~~quarter 2020.~~six months of 2020, respectively.

Cash claim payments ~~decreased $4.9~~increased $2.1 million, or ~~23%~~12%, in the ~~first~~second quarter 2021 compared to the ~~last year's~~prior year quarter, due to increased payments on both large and non-large claims mostly related to prior policy years. Cash claim payments decreased $2.8 million, or 7%, in the first ~~quarter, primarily~~six months of 2021 compared to the same period in 2020, due to lower payments on large and non-large claims ~~relating~~related to prior policy ~~years.~~years, partially offset by higher payments related to current year policies. We continue to manage and resolve large claims prudently and in keeping with our commitments to our ~~policyholders.~~policyholders.

In addition to title policy claims, we incur losses in our direct operations from escrow, closing and disbursement functions. These escrow losses typically relate to errors or other miscalculations of amounts to be paid at closing, including timing or amount of a mortgage payoff, payment of property or other taxes and payment of homeowners’ association fees. Escrow losses also arise in cases of fraud, and in those cases, the title insurer incurs the loss under its obligation to ensure that an unencumbered title is conveyed. Escrow losses are recognized as expenses when discovered or when contingencies associated with them (such as litigation) are resolved and are typically paid less than 12 months after the loss is recognized.


		March 31, 2021	December 31, 2020		June 30, 2021	December 31, 2020
		($ in millions)			($ in millions)
Known claims	Known claims	67.8	68.9	Known claims	67.0	68.9
IBNR	IBNR	441.7	427.4	IBNR	458.0	427.4
Total estimated title losses	Total estimated title losses	509.5	496.3	Total estimated title losses	525.0	496.3

The actual timing of estimated title loss payments may vary since claims, by their nature, are complex and paid over long periods of time. Based on historical payment patterns, the outstanding loss reserves are paid out within six years. As a result, the estimate of the ultimate amount to be paid on any claim may be modified over that time period. Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by both our management and our third party actuaries in estimating reserves. As a consequence, our ultimate liability may be materially greater or less than current reserves and/or our third party actuary’s calculated estimates.

Our liquidity and capital resources reflect our ability to generate cash flow to meet our obligations to stockholders, customers (payments to satisfy claims on title policies), vendors, employees, lenders and others. As of ~~March 31,~~June 30, 2021, our cash and investments, including amounts reserved pursuant to statutory requirements, aggregated ~~$1.1~~$1.13 billion ($~~596.5~~595.2 million, net of statutory reserves on cash and investments). Of our total cash and investments at ~~March 31,~~June 30, 2021, ~~$782.2~~$766.3 million ($~~518.7~~491.1 million, net of statutory reserves) was held in the United States and the rest internationally, principally in Canada.

Cash held at the parent company totaled ~~$32.5~~$17.5 million at ~~March 31,~~June 30, 2021. As a holding company, the parent company is funded principally by cash from its subsidiaries in the form of dividends, operating and other administrative expense reimbursements and pursuant to intercompany tax sharing agreements. The expense reimbursements are paid in accordance with management agreements, approved by the Texas Department of Insurance (TDI), among us and our subsidiaries. In addition to funding operating expenses, cash held at the parent company is used for dividend payments to common stockholders and for stock repurchases, if any. To the extent such uses exceed cash available, the parent company is dependent on distributions from its regulated title insurance underwriter, Stewart Title Guaranty Company (Guaranty).

A substantial majority of our consolidated cash and investments as of ~~March 31,~~June 30, 2021 was held by Guaranty and its subsidiaries. The use and investment of these funds, dividends to the parent company, and cash transfers between Guaranty and its subsidiaries and the parent company are subject to certain legal and regulatory restrictions. In general, Guaranty may use its cash and investments in excess of its legally-mandated statutory premium reserve (established in accordance with requirements under Texas law) to fund its insurance operations, including claim payments. Guaranty may also, subject to certain limitations, provide funds to its subsidiaries (whose operations consist principally of field title offices and ancillary services operations) for their operating and debt service needs.

We maintain investments in accordance with certain statutory requirements for the funding of statutory premium reserves. Statutory reserve funds are required to be fully funded and invested in high-quality securities and short-term investments. Statutory reserve funds are not available for current claim payments, which must be funded from current operating cash flow. Included in investments in debt and equity securities are statutory reserve funds of approximately ~~$491.3~~$517.8 million and $496.6 million at ~~March 31,~~June 30, 2021 and December 31, 2020, respectively. In addition, included within cash and cash equivalents are statutory reserve funds of approximately ~~$25.6~~$16.6 million and $20.0 million at ~~March 31,~~June 30, 2021 and December 31, 2020, respectively. As of ~~March 31,~~June 30, 2021, our known claims reserve totaled ~~$67.8~~$67.0 million and our estimate of claims that may be reported in the future, under generally accepted accounting principles, totaled ~~$441.7~~$458.0 million. In addition to this, we had cash and investments (excluding equity method investments) of ~~$421.3~~$397.6 million, which are available for underwriter operations, including claims payments, and acquisitions.

The ability of Guaranty to pay dividends to its parent is governed by Texas insurance law. The TDI must be notified of any dividend declared, and any dividend in excess of the statutory maximum of 20% of surplus (approximately $158.9 million as of December 31, 2020) would be, by regulation, considered extraordinary and subject to pre-approval by the TDI. Also, the Texas Insurance Commissioner may raise an objection to a planned distribution during the notification period. Guaranty’s actual ability or intent to pay dividends to its parent may be constrained by business and regulatory considerations, such as the impact of dividends on surplus and liquidity, which could affect its ratings and competitive position, the amount of insurance it can write and its ability to pay future dividends. During the ~~three~~six months ended ~~March 31,~~June 30, 2021 and in all of 2020, Guaranty paid dividends of ~~$40.0~~$100.0 million and $30.0 million, respectively, to its parent.

Net cash provided by operations in the first ~~quarter~~six months of 2021 ~~was $47.4~~improved to $150.5 million, compared to net cash ~~used~~provided by operations of ~~$11.4~~$50.1 million in the ~~prior~~same period last year, ~~quarter. The improvement in cash from operations was~~ primarily ~~driven by~~due to the higher net income and lower payments of claims ~~and accounts payables.~~in the first six months of 2021. Although our business is labor intensive, we are focused on a cost-effective, scalable business model which includes utilization of technology, centralized back and middle office functions and business process outsourcing. We are continuing our emphasis on cost management, especially in light of the current economic environment due to the COVID-19 pandemic, specifically focusing on lowering unit costs of production and improving operating margins in our direct title and ancillary services businesses. Our plans to improve margins include additional automation of manual processes, and further consolidation of our various systems and production operations. We continue to invest in the technology necessary to accomplish these goals.

Investing activities. Net cash used by investing activities is primarily driven by proceeds from matured and sold investments, purchases of investments, capital expenditures and acquisition of ~~title offices and other~~ businesses. During the first ~~quarter~~six months of 2021, total proceeds from securities investments sold and matured were ~~$45.9~~$65.8 million, compared to ~~$30.6~~$48.6 million during the same period in 2020. Cash used for purchases of securities investments was ~~$47.9~~$89.2 million during first six months of 2021, compared to $50.9 million during the first ~~quarter 2021, compared to $30.7 million during the first quarter~~six months of 2020.

We used ~~$52.6~~$131.9 million and ~~$1.4~~$33.4 million of cash for ~~several~~ acquisitions of title and ancillary services businesses during the first ~~quarter~~six months of 2021 and 2020, ~~respectively, and also~~respectively. We used ~~$16.0~~$16.1 million of cash ~~during the first quarter 2021~~ in acquiring an equity method investment in a title ~~company. During~~company and generated total proceeds of $10.6 million from sales of our buildings during the first ~~quarters 2021 and 2020, we~~six months of 2021. We used ~~$5.7~~$16.4 million and ~~$4.8~~$6.8 million ~~respectively,~~ of cash for purchases of property and ~~equipment.~~equipment during the first six months of 2021 and 2020, respectively. We maintain investment in capital expenditures at a level that enables us to implement technologies for increasing our operational and back-office efficiencies and to pursue growth in key markets.

Financing activities and capital resources. Total debt and stockholders’ equity were ~~$125.6~~$127.7 million and ~~$1,047.9~~$1,136.1 million, respectively, as of ~~March 31,~~June 30, 2021. ~~Payments~~During the first six months of 2021 and 2020, payments on notes payable ~~during the first quarters 2021 and 2020~~ of ~~$154.7~~$157.2 million and ~~$7.7~~$8.4 million, respectively, and notes payable additions of ~~$154.0~~$156.8 million and ~~$0.2~~$0.4 million, respectively, were related to short-term loan agreements in connection with our Section 1031 tax-deferred property exchange (Section 1031) business. During the first quarter 2021, we amended our line of credit agreement, resulting in an increase in the total line of credit commitment from our lenders from $200 million to $350 ~~million (refer to~~ ~~Note 1-D~~ ~~for additional details on the amendment).~~million. At ~~March 31,~~June 30, 2021, the outstanding balance of our line of credit facility was ~~$125.6~~$123.9 million, which included the $25.0 million we drew from the facility during the first ~~quarter 2021;~~six months of 2021, while the available balance of the line of credit was $223.6 million, net of an unused $2.5 million letter of credit. At ~~March 31,~~June 30, 2021, our debt-to-equity ratio, excluding our Section 1031 notes, was approximately ~~12.0%~~11%.

We believe we have sufficient liquidity and capital resources to meet the cash needs of our ongoing operations, including in the current economic and real estate environment created by the COVID-19 pandemic. However, we may determine that additional debt or equity funding is warranted to provide liquidity for achievement of strategic goals or acquisitions or for unforeseen circumstances. Other than scheduled maturities of debt, operating lease payments and anticipated claims payments, we have no material contractual commitments. We expect that cash flows from operations and cash available from our underwriters, subject to regulatory restrictions, will be sufficient to fund our operations, including claims payments. However, to the extent that these funds are not sufficient, we may be required to borrow funds on terms less favorable than we currently have or seek funding from the equity market, which may not be successful or may be on terms that are dilutive to existing stockholders.

Other comprehensive income (loss). Unrealized gains and losses on available-for-sale debt securities investments and changes in foreign currency exchange rates are reported net of deferred taxes in accumulated other comprehensive income (loss), a component of stockholders’ equity, until they are realized. During the first ~~quarter~~six months of 2021, net unrealized investment losses of ~~$9.3~~$8.7 million, net of taxes, which increased our other comprehensive loss, were primarily related to a net decrease in the fair values of our overall bond securities investment portfolio mainly driven by the effect of rising interest rates. During the first ~~quarter~~six months of 2020, net unrealized investment losses of ~~$2.7~~$14.0 million, net of taxes, which increased our other comprehensive ~~loss,~~income, were primarily related to a net decrease in the fair values of our overall bond securities investment portfolio mainly driven by increased credit spreads.

Off-balance sheet arrangements. We do not have any material source of liquidity or financing that involves off-balance sheet arrangements, other than our contractual obligations under operating leases. We also routinely hold funds in segregated escrow accounts pending the closing of real estate transactions and have qualified intermediaries in tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code. The Company holds the proceeds from these transactions until a qualifying exchange can occur. In accordance with industry practice, these segregated accounts are not included on the balance sheet. See Note 16 in our 2020 Form 10-K.

Forward-looking statements. Certain statements in this report are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and often address our expected future business and financial performance. These statements often contain words such as “may,” "expect," "anticipate," "intend," "plan," "believe," "seek," "will," "foresee" or other similar words. Forward-looking statements by their nature are subject to various risks and uncertainties that could cause our actual results to be materially different than those expressed in the forward-looking statements. These risks and uncertainties include, among other things, the volatility of economic conditions, including the duration and ~~effects~~ultimate impact of the COVID-19 pandemic; adverse changes in the level of real estate activity; changes in mortgage interest rates, existing and new home sales, and availability of mortgage financing; our ability to respond to and implement technology changes, including the completion of the implementation of our enterprise systems; the impact of unanticipated title losses or the need to strengthen our policy loss reserves; any effect of title losses on our cash flows and financial condition; the ability to attract and retain highly productive sales associates; the impact of vetting our agency operations for quality and profitability; independent agency remittance rates; changes to the participants in the secondary mortgage market and the rate of refinancing that affects the demand for title insurance products; regulatory non-compliance, fraud or defalcations by our title insurance agencies or employees; our ability to timely and cost-effectively respond to significant industry changes and introduce new products and services; the outcome of pending litigation; the impact of changes in governmental and insurance regulations, including any future reductions in the pricing of title insurance products and services; our dependence on our operating subsidiaries as a source of cash flow; our ability to access the equity and debt financing markets when and if needed; our ability to grow our international operations; seasonality and weather; and our ability to respond to the actions of our competitors. These risks and uncertainties, as well as others, are discussed in more detail in our documents filed with the Securities and Exchange Commission, including in Part I, Item 1A "Risk Factors" in our 2020 Form 10-K, and as maybe further updated and supplemented from time to time in our future Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K filed subsequently. All forward-looking statements included in this report are expressly qualified in their entirety by such cautionary statements. We expressly disclaim any obligation to update, amend or clarify any forward-looking statements contained in this report to reflect events or circumstances that may arise after the date hereof, except as may be required by applicable law.

Evaluation of disclosure controls and procedures. Our principal executive officer and principal financial officer are responsible for establishing and maintaining disclosure controls and procedures. They evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of ~~March 31,~~June 30, 2021, and have concluded that, as of such date, our disclosure controls and procedures are adequate and effective to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.


Delaware		74-1677330
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1360 Post Oak Blvd.,	Suite 100
Houston,	Texas	77056
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1 par value per share	STC	New York Stock Exchange


Exhibit


3.1	—	Restated Certificate of Incorporation of the Registrant, dated April 28, 2016 (incorporated by reference in this report from Exhibit 3.1 of the Current Report on Form 8-K filed April 29, 2016)
3.2	—	Third Amended and Restated By-Laws of the Registrant, as of April 27, 2016 (incorporated by reference in this report from Exhibit 3.2 of the Current Report on Form 8-K filed April 28, 2016)
10.1†*	—	~~Restricted Stock Unit Award Agreement, effective March 10, 2021, by and between the Registrant and Frederick H. Eppinger~~
10.2†*	—	~~Restricted Performance Stock Unit Award Agreement, effective March 10, 2021, by and between the Registrant and Frederick H. Eppinger~~
10.3†*	—	~~Stock Option Agreement, effective March 10, 2021, by and between the Registrant and Frederick H. Eppinger~~
10.4†*	—	~~Restricted Stock Unit Award Agreement, effective March 10, 2021, by and between the Registrant and David C. Hisey~~
10.5†*	—	~~Restricted Performance Stock Unit Award Agreement, effective March 10, 2021, by and between the Registrant and David C. Hisey~~
10.6†*	—	~~Stock Option Agreement, effective March 10, 2021, by and between the Registrant and David C. Hisey~~



~~Exhibit~~
10.7†*	—	~~Restricted Stock Unit Award Agreement, effective March 10, 2021, by and between the Registrant and John L. Killea~~
10.8†*	—	~~Restricted Performance Stock Unit Award Agreement, effective March 10, 2021, by and between the Registrant and John L. Killea~~
10.9†*	—	~~Stock Option Agreement, effective March 10, 2021, by and between the Registrant and John L. Killea~~
10.10†*	—	~~Restricted Stock Unit Award Agreement, effective March 10, 2021, by and between the Registrant and Steven M. Lessack~~
10.11†*		~~Restricted Stock Unit Cliff Vest Award Agreement, effective March 10, 2021, by and between the Registrant and Steven M. Lessack~~
10.12†*	—	~~Restricted Performance Stock Unit Award Agreement, effective March 10, 2021, by and between the Registrant and Steven M. Lessack~~
10.13†*	—	~~Stock Option Agreement, effective March 10, 2021, by and between the Registrant and Steven M. Lessack~~
10.14†*	—	~~Restricted Stock Unit Award Agreement, effective March 10, 2021, by and between the Registrant and Tara S. Smith~~
10.15†*	—	~~Restricted Performance Stock Unit Award Agreement, effective March 10, 2021, by and between the Registrant and Tara S. Smith~~
10.16†*	—	~~Stock Option Agreement, effective March 10, 2021, by and between the Registrant and Tara S. Smith~~
31.1*	—	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	—	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	—	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	—	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	—	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	—	XBRL Taxonomy Extension Schema Document
101.CAL*	—	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	—	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	—	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	—	XBRL Taxonomy Extension Presentation Linkbase Document


						Stewart Information Services Corporation
						Registrant

By:						/s/ David C. Hisey
						David C. Hisey, Chief Financial Officer, Secretary and Treasurer


Item	Item		Page	Item		Page
		PART I – FINANCIAL INFORMATION			PART I – FINANCIAL INFORMATION

1.	1.	Financial Statements	3	1.	Financial Statements	3

2.	2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17	2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

3.	3.	Quantitative and Qualitative Disclosures About Market Risk	27	3.	Quantitative and Qualitative Disclosures About Market Risk	27

4.	4.	Controls and Procedures	28	4.	Controls and Procedures	28
		PART II – OTHER INFORMATION			PART II – OTHER INFORMATION
1.	1.	Legal Proceedings	29	1.	Legal Proceedings	28

1A.	1A.	Risk Factors	29	1A.	Risk Factors	28

2.	2.	Unregistered Sales of Equity Securities and Use of Proceeds	29	2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

5.	5.	Other Information	29	5.	Other Information	28

6.	6.	Exhibits	29	6.	Exhibits	29

		Signature	31		Signature	29


	Level 1	Level 2	Fair value measurements
	($000 omitted)
Investments in securities:
Debt securities:
Municipal	0	44,089	44,089
Corporate	0	289,159	289,159
Foreign	0	275,585	275,585
U.S. Treasury Bonds	0	6,612	6,612
Equity securities	67,354	0	67,354
	67,354	615,445	682,799


* Filed herewith
~~† Management contract or compensatory plan~~