Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 25, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | STEWART INFORMATION SERVICES CORP | |
Entity Central Index Key | 94,344 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | STC | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 23,741,722 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Title revenues: | ||||
Direct operations | $ 231,662 | $ 237,017 | $ 419,091 | $ 423,018 |
Agency operations | 234,407 | 225,416 | 467,756 | 450,051 |
Ancillary services | 15,118 | 21,182 | 32,422 | 43,217 |
Operating revenues | 481,187 | 483,615 | 919,269 | 916,286 |
Investment income | 4,941 | 4,856 | 9,613 | 9,926 |
Investment and other (losses) gains – net | (676) | 966 | (389) | 1,454 |
Total revenues | 485,452 | 489,437 | 928,493 | 927,666 |
Expenses | ||||
Amounts retained by agencies | 192,558 | 183,485 | 383,733 | 367,329 |
Employee costs | 139,346 | 152,427 | 279,131 | 302,636 |
Other operating expenses | 88,786 | 86,458 | 167,103 | 174,168 |
Title losses and related claims | 24,462 | 17,153 | 45,163 | 40,247 |
Depreciation and amortization | 6,441 | 7,340 | 12,819 | 15,646 |
Interest | 712 | 661 | 1,529 | 1,440 |
Total expenses | 452,305 | 447,524 | 889,478 | 901,466 |
Income before taxes and noncontrolling interests | 33,147 | 41,913 | 39,015 | 26,200 |
Income tax expense | 10,993 | 14,386 | 10,850 | 7,738 |
Net income | 22,154 | 27,527 | 28,165 | 18,462 |
Less net income attributable to noncontrolling interests | 3,586 | 3,928 | 5,508 | 6,058 |
Net income attributable to Stewart | 18,568 | 23,599 | 22,657 | 12,404 |
Net income | 22,154 | 27,527 | 28,165 | 18,462 |
Other comprehensive income, net of taxes: | ||||
Foreign currency translation adjustments | 3,204 | (1,703) | 4,529 | 1,592 |
Change in net unrealized gains on investments | 355 | 6,182 | 2,822 | 11,971 |
Reclassification of adjustment for gains included in net income | (94) | (115) | (461) | (179) |
Other comprehensive income, net of taxes | 3,465 | 4,364 | 6,890 | 13,384 |
Comprehensive income | 25,619 | 31,891 | 35,055 | 31,846 |
Less net income attributable to noncontrolling interests | 3,586 | 3,928 | 5,508 | 6,058 |
Comprehensive income attributable to Stewart | $ 22,033 | $ 27,963 | $ 29,547 | $ 25,788 |
Basic average shares outstanding (000) | 23,444 | 23,365 | 23,438 | 23,357 |
Basic earnings per share attributable to Stewart (in usd per share) | $ 0.79 | $ 0.50 | $ 0.97 | $ 0.02 |
Diluted average shares outstanding (000) | 23,620 | 23,559 | 23,613 | 23,542 |
Diluted earnings per share attributable to Stewart (in usd per share) | $ 0.79 | $ 0.49 | $ 0.96 | $ 0.02 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 147,205 | $ 185,772 |
Short-term investments | 23,092 | 22,239 |
Investments in debt and equity securities available-for-sale, at fair value: | ||
Statutory reserve funds | 479,155 | 485,409 |
Other | 175,607 | 146,094 |
Total investments in debt and equity securities available-for-sale, at fair value | 654,762 | 631,503 |
Receivables: | ||
Premiums from agencies | 34,603 | 31,246 |
Trade and other | 50,023 | 41,897 |
Income taxes | 1,223 | 4,878 |
Notes | 3,702 | 3,402 |
Allowance for uncollectible amounts | (9,108) | (9,647) |
Total receivables | 80,443 | 71,776 |
Property and equipment, at cost: | ||
Land | 3,991 | 3,991 |
Buildings | 22,771 | 22,529 |
Furniture and equipment | 226,536 | 217,105 |
Accumulated depreciation | (183,179) | (173,119) |
Total property and equipment, at cost | 70,119 | 70,506 |
Title plants, at cost | 75,313 | 75,313 |
Investments in investees, on an equity method basis | 9,536 | 9,796 |
Goodwill | 234,667 | 217,094 |
Intangible assets, net of amortization | 9,317 | 10,890 |
Deferred tax assets | 3,865 | 3,860 |
Other assets | 49,725 | 42,975 |
Total assets | 1,358,044 | 1,341,724 |
Liabilities | ||
Notes payable | 116,331 | 106,808 |
Accounts payable and accrued liabilities | 97,095 | 115,640 |
Estimated title losses | 465,294 | 462,572 |
Deferred tax liabilities | 12,947 | 7,856 |
Total liabilities | 691,667 | 692,876 |
Contingent liabilities and commitments | ||
Stockholders’ equity | ||
Common Stock and additional paid-in capital | 183,350 | 180,959 |
Retained earnings | 479,860 | 471,788 |
Accumulated other comprehensive income (loss): | ||
Unrealized investment gains on investments - net | 10,207 | 7,846 |
Foreign currency translation adjustments | (12,198) | (16,727) |
Treasury stock – 352,161 common shares, at cost | (2,666) | (2,666) |
Stockholders’ equity attributable to Stewart | 658,553 | 641,200 |
Noncontrolling interests | 7,824 | 7,648 |
Total stockholders’ equity (23,737,447 and 23,431,279 shares outstanding) | 666,377 | 648,848 |
Liabilities and Equity, Total | $ 1,358,044 | $ 1,341,724 |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Treasury stock, common shares | 352,161 | 352,161 |
Common stock, shares outstanding | 23,737,447 | 23,431,279 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Reconciliation of net income to cash provided by operating activities: | ||
Net income | $ 28,165 | $ 18,462 |
Add (deduct): | ||
Depreciation and amortization | 12,819 | 15,646 |
Provision for bad debt | 634 | 1,098 |
Investment and other loss (gains) – net | 389 | (1,454) |
Amortization of net premium on investments available-for-sale | 3,421 | 3,559 |
Payments for title losses in excess of provisions | (1,260) | (3,690) |
Adjustment for insurance recoveries of title losses | 793 | 538 |
(Increase) decrease in receivables – net | (8,999) | 2,151 |
Increase in other assets – net | (6,526) | (2,936) |
Decrease in payables and accrued liabilities – net | (18,868) | (20,768) |
Change in net deferred income taxes | 2,329 | 2,017 |
Net income from equity investees | (977) | (1,069) |
Dividends received from equity investees | 1,237 | 1,172 |
Stock-based compensation expense | 3,372 | 3,723 |
Other – net | 2 | 10 |
Cash provided by operating activities | 16,531 | 18,459 |
Investing activities: | ||
Proceeds from investments available-for-sale sold | 49,655 | 32,827 |
Proceeds from investments available-for-sale matured | 22,834 | 7,782 |
Purchases of investments available-for-sale | (88,381) | (75,771) |
Net purchases of short-term investments | (853) | (2,325) |
Purchases of property and equipment, title plants and real estate – net | (9,328) | (11,494) |
Cash paid for acquisition of businesses | (18,080) | 0 |
Other – net | 410 | 592 |
Cash used by investing activities | (43,743) | (48,389) |
Financing activities: | ||
Payments on notes payable | (8,042) | (15,101) |
Proceeds from notes payable | 16,022 | 34,578 |
Distributions to noncontrolling interests | (5,300) | (5,660) |
Cash dividends paid | (14,065) | (13,760) |
Cash paid on Class B Common Shares conversion | 0 | (12,000) |
Payment of contingent consideration related to an acquisition | (1,298) | (2,002) |
Purchase of remaining interest in consolidated subsidiary | (1,013) | (301) |
Cash used by financing activities | (13,696) | (14,246) |
Effects of changes in foreign currency exchange rates | 2,341 | 2,375 |
Decrease in cash and cash equivalents | (38,567) | (41,801) |
Cash and cash equivalents at beginning of period | 185,772 | 179,067 |
Cash and cash equivalents at end of period | $ 147,205 | $ 137,266 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (UNAUDITED) - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Common Stock ($1 par value) | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss) income | Treasury stock | Noncontrolling interests |
Balances at beginning of period at Dec. 31, 2016 | $ 648,848 | $ 23,783 | $ 157,176 | $ 471,788 | $ (8,881) | $ (2,666) | $ 7,648 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Stewart | 22,657 | 22,657 | |||||
Cash dividends on Common Stock ($0.60 per share) | (14,585) | (14,585) | |||||
Stock-based compensation and other | 3,372 | 307 | 3,065 | ||||
Purchase of remaining interest in consolidated subsidiary | (1,013) | (981) | (32) | ||||
Net change in unrealized gains and losses on investments | 2,822 | 2,822 | |||||
Net realized gain reclassification | (461) | (461) | |||||
Foreign currency translation adjustments | 4,529 | 4,529 | |||||
Net income attributable to noncontrolling interests | 5,508 | 5,508 | |||||
Subsidiary dividends paid to noncontrolling interests | (5,300) | (5,300) | |||||
Balances at end of period at Jun. 30, 2017 | $ 666,377 | $ 24,090 | $ 159,260 | $ 479,860 | $ (1,991) | $ (2,666) | $ 7,824 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, par value (in usd per share) | $ 1 | $ 1 |
Cash dividends on common stock (in usd per share) | $ 0.60 |
Interim financial statements
Interim financial statements | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Interim financial statements | Interim financial statements. The financial information contained in this report for the three and six months ended June 30, 2017 and 2016 , and as of June 30, 2017 , is unaudited. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . 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 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. B. Consolidation. The condensed consolidated financial statements include all subsidiaries in which the Company owns more than 50% voting rights in electing directors. All significant intercompany amounts and transactions have been eliminated and provisions have been made for noncontrolling interests. Unconsolidated investees, in which the Company typically owns 20% through 50% of the equity, are accounted for by the equity method. C. Reclassifications. Certain amounts in the 2016 interim financial statements have been reclassified for comparative purposes. Net income attributable to Stewart, as previously reported, was not affected. D. 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, which approximated $479.2 million and $485.4 million at June 30, 2017 and December 31, 2016 , respectively, 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. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $23.3 million and $13.9 million at June 30, 2017 and December 31, 2016 , 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. E. Recently adopted accounting pronouncements. In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting , to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new standard, modification is required only if the fair value, the vesting conditions, or the classification of an award as equity or liability changes as a result of the change in terms or conditions. This ASU is effective for annual and interim periods beginning after December 15, 2017, with prospective application, and early adoption is allowed. The Company early adopted ASU 2017-09 effective June 1, 2017. |
Investments in debt and equity
Investments in debt and equity securities available-for-sale | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in debt and equity securities available-for-sale | Investments in debt and equity securities available-for-sale. The amortized costs and fair values follow: June 30, 2017 December 31, 2016 Amortized costs Fair values Amortized costs Fair values ($000 omitted) Debt securities: Municipal 72,214 73,601 72,284 72,432 Corporate 324,116 332,226 338,365 343,047 Foreign 199,369 200,669 165,735 167,027 U.S. Treasury Bonds 13,016 12,894 12,795 12,613 Equity securities 30,345 35,372 30,255 36,384 639,060 654,762 619,434 631,503 Foreign debt securities consist of Canadian government and corporate bonds, United Kingdom treasury bonds, and Mexican government bonds. Equity securities consist of common stocks and master limited partnership interests. Gross unrealized gains and losses were: June 30, 2017 December 31, 2016 Gains Losses Gains Losses ($000 omitted) Debt securities: Municipal 1,635 248 723 575 Corporate 8,524 414 6,871 2,189 Foreign 2,972 1,672 2,912 1,620 U.S. Treasury Bonds 7 129 4 186 Equity securities 6,079 1,052 6,800 671 19,217 3,515 17,310 5,241 Debt securities as of June 30, 2017 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights): Amortized costs Fair values ($000 omitted) In one year or less 27,282 27,481 After one year through five years 278,518 284,020 After five years through ten years 230,715 232,923 After ten years 72,200 74,966 608,715 619,390 Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2017 , were: Less than 12 months More than 12 months Total Losses Fair values Losses Fair values Losses Fair values ($000 omitted) Debt securities: Municipal 248 10,021 — — 248 10,021 Corporate 414 56,365 — — 414 56,365 Foreign 1,657 95,724 15 247 1,672 95,971 U.S. Treasury Bonds 129 10,824 — — 129 10,824 Equity securities 1,038 11,488 14 48 1,052 11,536 3,486 184,422 29 295 3,515 184,717 The number of investment securities in an unrealized loss position as of June 30, 2017 was 163 , 4 securities of which 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, and no significant credit risk is deemed to exist, these investments are not considered other-than-temporarily impaired. Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2016 , were: Less than 12 months More than 12 months Total Losses Fair values Losses Fair values Losses Fair values ($000 omitted) Debt securities: Municipal 575 32,038 — — 575 32,038 Corporate 2,189 119,965 — — 2,189 119,965 Foreign 1,427 70,012 193 3,160 1,620 73,172 U.S. Treasury Bonds 186 11,847 — — 186 11,847 Equity securities 424 5,950 247 2,250 671 8,200 4,801 239,812 440 5,410 5,241 245,222 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. |
Fair value measurements
Fair value measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Fair value measurements. The Fair Value Measurements and Disclosures Topic (Topic 820) of the FASB Accounting Standards Codification (ASC) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. Topic 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs when possible. The three levels of inputs used to measure fair value are as follows: • Level 1 – quoted prices in active markets for identical assets or liabilities; • Level 2 – observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and • Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. As of June 30, 2017 , financial instruments measured at fair value on a recurring basis are summarized below: Level 1 Level 2 Fair value measurements ($000 omitted) Investments available-for-sale: Debt securities: Municipal — 73,601 73,601 Corporate — 332,226 332,226 Foreign — 200,669 200,669 U.S. Treasury Bonds — 12,894 12,894 Equity securities 35,372 — 35,372 35,372 619,390 654,762 As of December 31, 2016 , financial instruments measured at fair value on a recurring basis are summarized below: Level 1 Level 2 Fair value measurements ($000 omitted) Investments available-for-sale: Debt securities: Municipal — 72,432 72,432 Corporate — 343,047 343,047 Foreign — 167,027 167,027 U.S. Treasury Bonds — 12,613 12,613 Equity securities 36,384 — 36,384 36,384 595,119 631,503 As of June 30, 2017 , 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. All municipal, foreign, and U.S. Treasury bonds are valued using a third-party pricing service, and the corporate bonds are valued using the market approach, which includes three to ten inputs from relevant market sources, including Financial Industry Regulatory Authority’s (FINRA) Trade Reporting and Compliance Engine (TRACE) and independent broker/dealer quotes, bids and offerings, as well as other relevant market data, such as securities with similar characteristics (i.e. sector, rating, maturity, etc.). Broker/dealer quotes, bids and offerings mentioned above are gathered (typically three to ten ) and a consensus risk premium spread (credit spread) over risk-free Treasury yields is developed from the inputs obtained, which is then used to calculate the resulting fair value. There were no transfers of investments between levels during the six months ended June 30, 2017 and 2016. |
Investment income and other gai
Investment income and other gains and losses | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment income and other gains and losses | Investment income and other gains and losses. Gross realized investment and other gains and losses follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted) Realized gains 279 1,139 845 5,076 Realized losses (955 ) (173 ) (1,234 ) (3,622 ) (676 ) 966 (389 ) 1,454 Expenses assignable to investment income were insignificant. There were no significant investments as of June 30, 2017 that did not produce income during the year. For the six months ended June 30, 2017 , investment and other losses – net included $ 0.8 million of net realized loss due to an increase in the fair value of a contingent consideration liability related to a prior acquisition. For the six months ended June 30, 2016 , investments and other gains - net included $1.6 million of net realized gains due to changes in the fair values of contingent consideration liabilities associated with prior year acquisitions and $0.9 million of net realized gains from the sale of investments available-for-sale, partially offset by $1.2 million of office closure costs. Proceeds from sales of investments available-for-sale are as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted) Proceeds from sales of investments available-for-sale 33,812 21,500 49,655 32,827 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill. The summary of changes in goodwill is as follows. Title Ancillary Services and Corporate Consolidated Total ($000 omitted) Balances at December 31, 2016 211,365 5,729 217,094 Acquisitions 17,573 — 17,573 Balances at June 30, 2017 228,938 5,729 234,667 During the second quarter 2017, the Company acquired certain businesses primarily funded by borrowings on the Company's unsecured line of credit. Based on the Company's preliminary purchase price allocations as of June 30, 2017, the Company increased its goodwill related to the title segment by a total of $ 17.6 million, which is subject to change pending completion of the Company's purchase price allocations by the end of 2017. |
Estimated title losses
Estimated title losses | 6 Months Ended |
Jun. 30, 2017 | |
Insurance [Abstract] | |
Estimated title losses | Estimated title losses. A summary of estimated title losses for the six months ended June 30 is as follows: 2017 2016 ($000 omitted) Balances at January 1 462,572 462,622 Provisions: Current year 43,850 47,146 Previous policy years 1,313 (6,899 ) Total provisions 45,163 40,247 Payments, net of recoveries: Current year (5,966 ) (9,047 ) Previous policy years (39,664 ) (34,352 ) Total payments, net of recoveries (45,630 ) (43,399 ) Effects of changes in foreign currency exchange rates 3,189 3,768 Balances at June 30 465,294 463,238 Loss ratios as a percentage of title operating revenues: Current year provisions 4.9 % 5.4 % Total provisions 5.1 % 4.6 % There were no significant adjustments to the loss provisioning rates or large claim reserves during the six months ended June 30, 2017. In 2016, the Company decreased its loss provisioning rates and reserves related to certain existing large claims due to continued favorable policy loss experience. As a result, a $ 5.4 million net policy loss reserve reduction was recorded during the six months ended June 30, 2016. |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share. The Company’s 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 for the effects of any dilutive shares. The treasury stock method is used to calculate the dilutive number of shares related to the Company’s long term incentive and stock option plans. 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. The calculation of the basic and diluted EPS is as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted, except per share) Numerator: Net income attributable to Stewart 18,568 23,599 22,657 12,404 Less: Cash paid on Class B Common Shares conversion (a) — (12,000 ) — (12,000 ) Net income available to common shareholders 18,568 11,599 22,657 404 Denominator (000): Basic average shares outstanding 23,444 23,365 23,438 23,357 Average number of dilutive shares relating to options — 1 — 1 Average number of dilutive shares relating to grants of restricted shares 176 193 175 184 Diluted average shares outstanding 23,620 23,559 23,613 23,542 Basic earnings per share attributable to Stewart 0.79 0.50 0.97 0.02 Diluted earnings per share attributable to Stewart 0.79 0.49 0.96 0.02 (a) - During 2016, the Company paid $12.0 million as part of the consideration related to the exchange agreement with the holders of the Class B Common Stock. In accordance with the ASC 260, Earnings Per Share , the $12.0 million payment was treated in a manner similar to the treatment of dividends on preferred stock for the purpose of calculating EPS. Accordingly, the $12.0 million payment was deducted from the 2016 net income to arrive at the net income for calculating basic and diluted EPS. |
Share-based payments
Share-based payments | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based payments | Share-based payments. During the first six months of 2017 and 2016, the Company granted executives and senior management shares of restricted common stock, consisting of time-based shares, which vest on each of the first three anniversaries of the grant date, and performance-based shares, which vest upon achievement of certain financial objectives over the period of three years . The aggregate grant-date fair values of these awards in 2017 and 2016 were $4.7 million ( 107,000 shares with an average grant price per share of $44.21 ) and $3.9 million ( 105,000 shares with an average grant price per share of $37.33 ), respectively. Awards were made pursuant to the Company’s employee incentive compensation plans and the compensation expense associated with restricted stock awards is recognized over the corresponding vesting period. Additionally, during the second quarters 2017 and 2016, the Company granted its board of directors, as a component of annual director retainer compensation, 13,000 and 16,300 shares, respectively, of common stock, which vested immediately. The aggregate fair values of these director awards at the grant dates in 2017 and 2016 were both $0.6 million . |
Contingent liabilities and comm
Contingent liabilities and commitments | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent liabilities and commitments | 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 June 30, 2017 , 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 minimum lease payments. As of June 30, 2017 , the Company also had unused letters of credit aggregating $5.6 million related to workers’ compensation and other insurance. The Company does not expect to make any payments on these guarantees. |
Regulatory and legal developmen
Regulatory and legal developments | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Regulatory and legal developments | 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 plaintiff seeks 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. In addition, along with the other major title insurance companies, the Company is party to class action lawsuits concerning the title insurance industry. The Company believes that it has adequate reserves for the various litigation matters and contingencies discussed in this paragraph and that the likely resolution of these matters will not materially affect its consolidated financial condition or results of operations. The Company is subject to administrative actions and litigation relating to the basis on which premium taxes are paid in certain states. Additionally, the Company receives from time to time various other inquiries from governmental regulators concerning practices in the insurance industry. Many of these practices do not concern title insurance. To the extent the Company is in receipt of such inquiries, it believes that it has adequately reserved for these matters and does not anticipate that the outcome of these inquiries will materially affect its consolidated financial condition or results of operations. The Company is subject to various other administrative actions and inquiries into its business conduct in certain of the states in which it operates. While the Company cannot predict the outcome of the various regulatory and administrative matters, it believes that it has adequately reserved for these matters and does not anticipate that the outcome of any of these matters will materially affect its consolidated financial condition or results of operations. |
Segment information
Segment information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment information | Segment information. The Company reports two 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 centralized title services, home and personal insurance services and Internal Revenue Code Section 1031 tax-deferred exchanges. The ancillary services and corporate segment historically provided appraisal and valuation services, loan file review, quality control services, government services, document management, recording and call center-related services offered to large mortgage lenders and servicers, mortgage brokers and mortgage investors. Beginning in 2017, the principal offerings of ancillary services are appraisal and valuation services. Also included in the ancillary services and corporate segment are expenses of the parent holding company and certain other enterprise-wide overhead costs, net of centralized administrative services costs allocated to respective operating businesses. Selected statement of income information related to these segments is as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted) Title segment: Revenues 470,449 467,508 896,246 881,047 Depreciation and amortization 5,321 5,364 10,547 10,522 Income before taxes and noncontrolling interest 39,467 51,296 51,744 50,676 Ancillary services and corporate segment: Revenues 15,003 21,929 32,247 46,619 Depreciation and amortization 1,120 1,976 2,272 5,124 Loss before taxes and noncontrolling interest (6,320 ) (9,383 ) (12,729 ) (24,476 ) Consolidated Stewart: Revenues 485,452 489,437 928,493 927,666 Depreciation and amortization 6,441 7,340 12,819 15,646 Income before taxes and noncontrolling interest 33,147 41,913 39,015 26,200 The Company does not provide asset information by reportable operating segment as it does not routinely evaluate the asset position by segment. Revenues generated in the United States and all international operations are as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted) United States 451,766 458,438 871,019 876,026 International 33,686 30,999 57,474 51,640 485,452 489,437 928,493 927,666 |
Other comprehensive income
Other comprehensive income | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Other comprehensive income | Other comprehensive income. Changes in the balances of each component of other comprehensive income and the related tax effects are as follows: Three Months Ended Three Months Ended Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount ($000 omitted) ($000 omitted) Unrealized investment gains on investments - net: Change in net unrealized gains on investments 548 193 355 9,511 3,329 6,182 Less: reclassification adjustment for net gains included in net income (145 ) (51 ) (94 ) (178 ) (63 ) (115 ) Net unrealized gains 403 142 261 9,333 3,266 6,067 Foreign currency translation adjustments 4,334 1,130 3,204 (1,413 ) 290 (1,703 ) Other comprehensive income 4,737 1,272 3,465 7,920 3,556 4,364 Six Months Ended Six Months Ended Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount ($000 omitted) ($000 omitted) Unrealized investment gains on investments - net: Change in net unrealized gains on investments 4,343 1,521 2,822 18,417 6,446 11,971 Less: reclassification adjustment for net gains included in net income (710 ) (249 ) (461 ) (276 ) (97 ) (179 ) Net unrealized gains 3,633 1,272 2,361 18,141 6,349 11,792 Foreign currency translation adjustments 6,014 1,485 4,529 3,944 2,352 1,592 Other comprehensive income 9,647 2,757 6,890 22,085 8,701 13,384 |
Interim financial statements (P
Interim financial statements (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Management's responsibility | 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 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. |
Consolidation | Consolidation. The condensed consolidated financial statements include all subsidiaries in which the Company owns more than 50% voting rights in electing directors. All significant intercompany amounts and transactions have been eliminated and provisions have been made for noncontrolling interests. Unconsolidated investees, in which the Company typically owns 20% through 50% of the equity, are accounted for by the equity method. |
Reclassifications | Reclassifications. Certain amounts in the 2016 interim financial statements have been reclassified for comparative purposes. Net income attributable to Stewart, as previously reported, was not affected. |
Restrictions on cash and investments | 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, which approximated $479.2 million and $485.4 million at June 30, 2017 and December 31, 2016 , respectively, 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. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $23.3 million and $13.9 million at June 30, 2017 and December 31, 2016 , 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. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements. In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting , to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new standard, modification is required only if the fair value, the vesting conditions, or the classification of an award as equity or liability changes as a result of the change in terms or conditions. This ASU is effective for annual and interim periods beginning after December 15, 2017, with prospective application, and early adoption is allowed. The Company early adopted ASU 2017-09 effective June 1, 2017. |
Investments in debt and equit21
Investments in debt and equity securities available-for-sale (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized costs and fair values | The amortized costs and fair values follow: June 30, 2017 December 31, 2016 Amortized costs Fair values Amortized costs Fair values ($000 omitted) Debt securities: Municipal 72,214 73,601 72,284 72,432 Corporate 324,116 332,226 338,365 343,047 Foreign 199,369 200,669 165,735 167,027 U.S. Treasury Bonds 13,016 12,894 12,795 12,613 Equity securities 30,345 35,372 30,255 36,384 639,060 654,762 619,434 631,503 Proceeds from sales of investments available-for-sale are as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted) Proceeds from sales of investments available-for-sale 33,812 21,500 49,655 32,827 |
Gross unrealized gains and losses | Gross unrealized gains and losses were: June 30, 2017 December 31, 2016 Gains Losses Gains Losses ($000 omitted) Debt securities: Municipal 1,635 248 723 575 Corporate 8,524 414 6,871 2,189 Foreign 2,972 1,672 2,912 1,620 U.S. Treasury Bonds 7 129 4 186 Equity securities 6,079 1,052 6,800 671 19,217 3,515 17,310 5,241 |
Debt securities according to contractual terms | Debt securities as of June 30, 2017 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights): Amortized costs Fair values ($000 omitted) In one year or less 27,282 27,481 After one year through five years 278,518 284,020 After five years through ten years 230,715 232,923 After ten years 72,200 74,966 608,715 619,390 |
Gross unrealized losses on investments and fair values of related securities | Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2017 , were: Less than 12 months More than 12 months Total Losses Fair values Losses Fair values Losses Fair values ($000 omitted) Debt securities: Municipal 248 10,021 — — 248 10,021 Corporate 414 56,365 — — 414 56,365 Foreign 1,657 95,724 15 247 1,672 95,971 U.S. Treasury Bonds 129 10,824 — — 129 10,824 Equity securities 1,038 11,488 14 48 1,052 11,536 3,486 184,422 29 295 3,515 184,717 Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2016 , were: Less than 12 months More than 12 months Total Losses Fair values Losses Fair values Losses Fair values ($000 omitted) Debt securities: Municipal 575 32,038 — — 575 32,038 Corporate 2,189 119,965 — — 2,189 119,965 Foreign 1,427 70,012 193 3,160 1,620 73,172 U.S. Treasury Bonds 186 11,847 — — 186 11,847 Equity securities 424 5,950 247 2,250 671 8,200 4,801 239,812 440 5,410 5,241 245,222 |
Fair value measurements (Tables
Fair value measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial instruments measured at fair value on recurring basis | As of June 30, 2017 , financial instruments measured at fair value on a recurring basis are summarized below: Level 1 Level 2 Fair value measurements ($000 omitted) Investments available-for-sale: Debt securities: Municipal — 73,601 73,601 Corporate — 332,226 332,226 Foreign — 200,669 200,669 U.S. Treasury Bonds — 12,894 12,894 Equity securities 35,372 — 35,372 35,372 619,390 654,762 As of December 31, 2016 , financial instruments measured at fair value on a recurring basis are summarized below: Level 1 Level 2 Fair value measurements ($000 omitted) Investments available-for-sale: Debt securities: Municipal — 72,432 72,432 Corporate — 343,047 343,047 Foreign — 167,027 167,027 U.S. Treasury Bonds — 12,613 12,613 Equity securities 36,384 — 36,384 36,384 595,119 631,503 |
Investment income and other g23
Investment income and other gains and losses (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Gross realized investment and other gains and losses | Gross realized investment and other gains and losses follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted) Realized gains 279 1,139 845 5,076 Realized losses (955 ) (173 ) (1,234 ) (3,622 ) (676 ) 966 (389 ) 1,454 |
Proceeds from sale of investments available-for-sale | The amortized costs and fair values follow: June 30, 2017 December 31, 2016 Amortized costs Fair values Amortized costs Fair values ($000 omitted) Debt securities: Municipal 72,214 73,601 72,284 72,432 Corporate 324,116 332,226 338,365 343,047 Foreign 199,369 200,669 165,735 167,027 U.S. Treasury Bonds 13,016 12,894 12,795 12,613 Equity securities 30,345 35,372 30,255 36,384 639,060 654,762 619,434 631,503 Proceeds from sales of investments available-for-sale are as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted) Proceeds from sales of investments available-for-sale 33,812 21,500 49,655 32,827 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of changes in goodwill | The summary of changes in goodwill is as follows. Title Ancillary Services and Corporate Consolidated Total ($000 omitted) Balances at December 31, 2016 211,365 5,729 217,094 Acquisitions 17,573 — 17,573 Balances at June 30, 2017 228,938 5,729 234,667 |
Estimated title losses (Tables)
Estimated title losses (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Insurance [Abstract] | |
Summary of estimated title losses | A summary of estimated title losses for the six months ended June 30 is as follows: 2017 2016 ($000 omitted) Balances at January 1 462,572 462,622 Provisions: Current year 43,850 47,146 Previous policy years 1,313 (6,899 ) Total provisions 45,163 40,247 Payments, net of recoveries: Current year (5,966 ) (9,047 ) Previous policy years (39,664 ) (34,352 ) Total payments, net of recoveries (45,630 ) (43,399 ) Effects of changes in foreign currency exchange rates 3,189 3,768 Balances at June 30 465,294 463,238 Loss ratios as a percentage of title operating revenues: Current year provisions 4.9 % 5.4 % Total provisions 5.1 % 4.6 % |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The calculation of the basic and diluted EPS is as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted, except per share) Numerator: Net income attributable to Stewart 18,568 23,599 22,657 12,404 Less: Cash paid on Class B Common Shares conversion (a) — (12,000 ) — (12,000 ) Net income available to common shareholders 18,568 11,599 22,657 404 Denominator (000): Basic average shares outstanding 23,444 23,365 23,438 23,357 Average number of dilutive shares relating to options — 1 — 1 Average number of dilutive shares relating to grants of restricted shares 176 193 175 184 Diluted average shares outstanding 23,620 23,559 23,613 23,542 Basic earnings per share attributable to Stewart 0.79 0.50 0.97 0.02 Diluted earnings per share attributable to Stewart 0.79 0.49 0.96 0.02 (a) - During 2016, the Company paid $12.0 million as part of the consideration related to the exchange agreement with the holders of the Class B Common Stock. In accordance with the ASC 260, Earnings Per Share , the $12.0 million payment was treated in a manner similar to the treatment of dividends on preferred stock for the purpose of calculating EPS. Accordingly, the $12.0 million payment was deducted from the 2016 net income to arrive at the net income for calculating basic and diluted EPS. |
Segment information (Tables)
Segment information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Selected statement of operations and income (loss) information related to segments | Selected statement of income information related to these segments is as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted) Title segment: Revenues 470,449 467,508 896,246 881,047 Depreciation and amortization 5,321 5,364 10,547 10,522 Income before taxes and noncontrolling interest 39,467 51,296 51,744 50,676 Ancillary services and corporate segment: Revenues 15,003 21,929 32,247 46,619 Depreciation and amortization 1,120 1,976 2,272 5,124 Loss before taxes and noncontrolling interest (6,320 ) (9,383 ) (12,729 ) (24,476 ) Consolidated Stewart: Revenues 485,452 489,437 928,493 927,666 Depreciation and amortization 6,441 7,340 12,819 15,646 Income before taxes and noncontrolling interest 33,147 41,913 39,015 26,200 |
Revenues generated in domestic and all international operations | Revenues generated in the United States and all international operations are as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 ($000 omitted) United States 451,766 458,438 871,019 876,026 International 33,686 30,999 57,474 51,640 485,452 489,437 928,493 927,666 |
Other comprehensive income (Tab
Other comprehensive income (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of changes in the balances of each component of other comprehensive income | Changes in the balances of each component of other comprehensive income and the related tax effects are as follows: Three Months Ended Three Months Ended Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount ($000 omitted) ($000 omitted) Unrealized investment gains on investments - net: Change in net unrealized gains on investments 548 193 355 9,511 3,329 6,182 Less: reclassification adjustment for net gains included in net income (145 ) (51 ) (94 ) (178 ) (63 ) (115 ) Net unrealized gains 403 142 261 9,333 3,266 6,067 Foreign currency translation adjustments 4,334 1,130 3,204 (1,413 ) 290 (1,703 ) Other comprehensive income 4,737 1,272 3,465 7,920 3,556 4,364 Six Months Ended Six Months Ended Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount ($000 omitted) ($000 omitted) Unrealized investment gains on investments - net: Change in net unrealized gains on investments 4,343 1,521 2,822 18,417 6,446 11,971 Less: reclassification adjustment for net gains included in net income (710 ) (249 ) (461 ) (276 ) (97 ) (179 ) Net unrealized gains 3,633 1,272 2,361 18,141 6,349 11,792 Foreign currency translation adjustments 6,014 1,485 4,529 3,944 2,352 1,592 Other comprehensive income 9,647 2,757 6,890 22,085 8,701 13,384 |
Interim financial statements (D
Interim financial statements (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Statutory reserve funds, short-term investments | $ 479,155 | $ 485,409 |
Statutory reserve funds, cash and cash equivalents | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Statutory reserve funds, cash and cash equivalents | 23,300 | 13,900 |
Statutory reserve funds, short-term investments | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Statutory reserve funds, short-term investments | $ 479,200 | $ 485,400 |
Investments in debt and equit30
Investments in debt and equity securities available-for-sale - Amortized Costs and Fair Values (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Amortized costs | ||
Debt securities | $ 608,715 | |
Equity securities | 30,345 | $ 30,255 |
Total investments in debt and equity securities available-for-sale, at amortized cost | 639,060 | 619,434 |
Fair values | ||
Debt securities | 619,390 | |
Equity securities | 35,372 | 36,384 |
Total investments in debt and equity securities available-for-sale, at fair value | 654,762 | 631,503 |
Municipal | ||
Amortized costs | ||
Debt securities | 72,214 | 72,284 |
Fair values | ||
Debt securities | 73,601 | 72,432 |
Corporate | ||
Amortized costs | ||
Debt securities | 324,116 | 338,365 |
Fair values | ||
Debt securities | 332,226 | 343,047 |
Foreign | ||
Amortized costs | ||
Debt securities | 199,369 | 165,735 |
Fair values | ||
Debt securities | 200,669 | 167,027 |
U.S. Treasury Bonds | ||
Amortized costs | ||
Debt securities | 13,016 | 12,795 |
Fair values | ||
Debt securities | $ 12,894 | $ 12,613 |
Investments in debt and equit31
Investments in debt and equity securities available-for-sale - Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Gains | $ 19,217 | $ 17,310 |
Losses | 3,515 | 5,241 |
Municipal | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gains | 1,635 | 723 |
Losses | 248 | 575 |
Corporate | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gains | 8,524 | 6,871 |
Losses | 414 | 2,189 |
Foreign | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gains | 2,972 | 2,912 |
Losses | 1,672 | 1,620 |
U.S. Treasury Bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gains | 7 | 4 |
Losses | 129 | 186 |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gains | 6,079 | 6,800 |
Losses | $ 1,052 | $ 671 |
Investments in debt and equit32
Investments in debt and equity securities available-for-sale - Debt Securities According to Contractual Terms (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Amortized costs | |
In one year or less | $ 27,282 |
After one year through five years | 278,518 |
After five years through ten years | 230,715 |
After ten years | 72,200 |
Amortized costs, total | 608,715 |
Fair values | |
In one year or less | 27,481 |
After one year through five years | 284,020 |
After five years through ten years | 232,923 |
After ten years | 74,966 |
Fair values, total | $ 619,390 |
Investments in debt and equit33
Investments in debt and equity securities available-for-sale - Gross Unrealized Losses on Investments and Fair Values of Related Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Losses | ||
Less than 12 months | $ 3,486 | $ 4,801 |
More than 12 months | 29 | 440 |
Total | 3,515 | 5,241 |
Fair values | ||
Less than 12 months | 184,422 | 239,812 |
More than 12 months | 295 | 5,410 |
Total | 184,717 | 245,222 |
Municipal | ||
Losses | ||
Less than 12 months | 248 | 575 |
More than 12 months | 0 | 0 |
Total | 248 | 575 |
Fair values | ||
Less than 12 months | 10,021 | 32,038 |
More than 12 months | 0 | 0 |
Total | 10,021 | 32,038 |
Corporate | ||
Losses | ||
Less than 12 months | 414 | 2,189 |
More than 12 months | 0 | 0 |
Total | 414 | 2,189 |
Fair values | ||
Less than 12 months | 56,365 | 119,965 |
More than 12 months | 0 | 0 |
Total | 56,365 | 119,965 |
Foreign | ||
Losses | ||
Less than 12 months | 1,657 | 1,427 |
More than 12 months | 15 | 193 |
Total | 1,672 | 1,620 |
Fair values | ||
Less than 12 months | 95,724 | 70,012 |
More than 12 months | 247 | 3,160 |
Total | 95,971 | 73,172 |
U.S. Treasury Bonds | ||
Losses | ||
Less than 12 months | 129 | 186 |
More than 12 months | 0 | 0 |
Total | 129 | 186 |
Fair values | ||
Less than 12 months | 10,824 | 11,847 |
More than 12 months | 0 | 0 |
Total | 10,824 | 11,847 |
Equity securities | ||
Losses | ||
Less than 12 months | 1,038 | 424 |
More than 12 months | 14 | 247 |
Total | 1,052 | 671 |
Fair values | ||
Less than 12 months | 11,488 | 5,950 |
More than 12 months | 48 | 2,250 |
Total | $ 11,536 | $ 8,200 |
Investments in debt and equit34
Investments in debt and equity securities available-for-sale - Additional Information (Details) | Jun. 30, 2017investment |
Investments, Debt and Equity Securities [Abstract] | |
Number of investments in an unrealized loss position | 163 |
Number of investments in an unrealized loss positions for more than 12 months | 4 |
Fair value measurements (Detail
Fair value measurements (Details) $ in Thousands | Jun. 30, 2017USD ($)input | Dec. 31, 2016USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | $ 654,762 | $ 631,503 |
Corporate | Level 2 | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of inputs used in fair value measurement | input | 3 | |
Corporate | Level 2 | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of inputs used in fair value measurement | input | 10 | |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | $ 654,762 | 631,503 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 35,372 | 36,384 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 619,390 | 595,119 |
Fair Value, Measurements, Recurring | Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 73,601 | 72,432 |
Fair Value, Measurements, Recurring | Municipal | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 0 | 0 |
Fair Value, Measurements, Recurring | Municipal | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 73,601 | 72,432 |
Fair Value, Measurements, Recurring | Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 332,226 | 343,047 |
Fair Value, Measurements, Recurring | Corporate | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 332,226 | 343,047 |
Fair Value, Measurements, Recurring | Foreign | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 200,669 | 167,027 |
Fair Value, Measurements, Recurring | Foreign | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 200,669 | 167,027 |
Fair Value, Measurements, Recurring | U.S. Treasury Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 12,894 | 12,613 |
Fair Value, Measurements, Recurring | U.S. Treasury Bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 0 | 0 |
Fair Value, Measurements, Recurring | U.S. Treasury Bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 12,894 | 12,613 |
Fair Value, Measurements, Recurring | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 35,372 | 36,384 |
Fair Value, Measurements, Recurring | Equity securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | 35,372 | 36,384 |
Fair Value, Measurements, Recurring | Equity securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value measurements | $ 0 | $ 0 |
Investment income and other g36
Investment income and other gains and losses - Gross Realized Investment and Other Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Available for sale securities gross realized gain (loss) | ||||
Realized gains | $ 279 | $ 1,139 | $ 845 | $ 5,076 |
Realized losses | (955) | (173) | (1,234) | (3,622) |
Realized gains (losses) | $ (676) | $ 966 | $ (389) | $ 1,454 |
Investment income and other g37
Investment income and other gains and losses - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||
Net realized gains (losses) from change in fair value of contingent consideration liabilities | $ (0.8) | $ 1.6 |
Net realized gains from sale of investments available-for-sale | 0.9 | |
Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Office closure costs | $ 1.2 |
Investment income and other g38
Investment income and other gains and losses - Proceeds from the Sale of Investments Available-for-Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Gain loss on sale of investments | ||||
Proceeds from sales of investments available-for-sale | $ 33,812 | $ 21,500 | $ 49,655 | $ 32,827 |
Goodwill - Changes in Goodwill
Goodwill - Changes in Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 217,094 | |
Acquisitions | 17,573 | |
Balance at end of period | $ 234,667 | 234,667 |
Title | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 211,365 | |
Acquisitions | 17,600 | 17,573 |
Balance at end of period | 228,938 | 228,938 |
Ancillary Services and Corporate | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 5,729 | |
Acquisitions | 0 | |
Balance at end of period | $ 5,729 | $ 5,729 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Business Acquisition [Line Items] | ||
Increase in goodwill | $ 17,573 | |
Title | ||
Business Acquisition [Line Items] | ||
Increase in goodwill | $ 17,600 | $ 17,573 |
Estimated title losses (Details
Estimated title losses (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balances at beginning of period | $ 462,572 | $ 462,622 |
Provisions: | ||
Current year | 43,850 | 47,146 |
Previous policy years | 1,313 | (6,899) |
Total provisions | 45,163 | 40,247 |
Payments, net of recoveries: | ||
Current year | (5,966) | (9,047) |
Previous policy years | (39,664) | (34,352) |
Total payments, net of recoveries | (45,630) | (43,399) |
Effects of changes in foreign currency exchange rates | 3,189 | 3,768 |
Balances at end of period | $ 465,294 | $ 463,238 |
Loss ratios as a percentage of title operating revenues: | ||
Current year provisions | 4.90% | 5.40% |
Total provisions | 5.10% | 4.60% |
Net policy loss reserve reduction | $ 5,400 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Numerator: | ||||
Net income attributable to Stewart | $ 18,568 | $ 23,599 | $ 22,657 | $ 12,404 |
Less: Cash paid on Class B Common Shares conversion | 0 | (12,000) | 0 | (12,000) |
Net income available to common shareholders | $ 18,568 | $ 11,599 | $ 22,657 | $ 404 |
Denominator (000): | ||||
Basic average shares outstanding | 23,444 | 23,365 | 23,438 | 23,357 |
Diluted average shares outstanding | 23,620 | 23,559 | 23,613 | 23,542 |
Basic earnings per share attributable to Stewart (in usd per share) | $ 0.79 | $ 0.50 | $ 0.97 | $ 0.02 |
Diluted earnings per share attributable to Stewart (in usd per share) | $ 0.79 | $ 0.49 | $ 0.96 | $ 0.02 |
Options | ||||
Denominator (000): | ||||
Average number of dilutive shares relating to share-based incentives | 0 | 1 | 0 | 1 |
Restricted Shares | ||||
Denominator (000): | ||||
Average number of dilutive shares relating to share-based incentives | 176 | 193 | 175 | 184 |
Share-based payments (Details)
Share-based payments (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Board of Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares granted and immediately vested in relation to the annual director retainer compensation (in shares) | 13,000 | 16,300 | ||
Fair value of vested shares | $ 0.6 | $ 0.6 | ||
Time-Based Restricted Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | 3 years | ||
Performance-Based Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | 3 years | ||
Restricted Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate fair values at grant date | $ 4.7 | $ 3.9 | $ 4.7 | $ 3.9 |
Share-based incentives, shares issued | 107,000 | 105,000 | ||
Average grant price (in usd per share) | $ 44.21 | $ 37.33 |
Contingent liabilities and co44
Contingent liabilities and commitments (Details) $ in Millions | Jun. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantee of indebtedness, relating to unused letters of credit | $ 5.6 |
Segment information - Additiona
Segment information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment information - Selected
Segment information - Selected Statement of Operations and Income (Loss) Information Related to Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 485,452 | $ 489,437 | $ 928,493 | $ 927,666 |
Depreciation and amortization | 6,441 | 7,340 | 12,819 | 15,646 |
Income (loss) before taxes and noncontrolling interest | 33,147 | 41,913 | 39,015 | 26,200 |
Title segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 470,449 | 467,508 | 896,246 | 881,047 |
Depreciation and amortization | 5,321 | 5,364 | 10,547 | 10,522 |
Income (loss) before taxes and noncontrolling interest | 39,467 | 51,296 | 51,744 | 50,676 |
Ancillary services and corporate segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 15,003 | 21,929 | 32,247 | 46,619 |
Depreciation and amortization | 1,120 | 1,976 | 2,272 | 5,124 |
Income (loss) before taxes and noncontrolling interest | $ (6,320) | $ (9,383) | $ (12,729) | $ (24,476) |
Segment information - Revenues
Segment information - Revenues Generated in United States and All International Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 485,452 | $ 489,437 | $ 928,493 | $ 927,666 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 451,766 | 458,438 | 871,019 | 876,026 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 33,686 | $ 30,999 | $ 57,474 | $ 51,640 |
Other comprehensive income (Det
Other comprehensive income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Before-Tax Amount | ||||
Change in net unrealized gains on investments | $ 548 | $ 9,511 | $ 4,343 | $ 18,417 |
Less: reclassification adjustment for net gains included in net income | (145) | (178) | (710) | (276) |
Net unrealized gains | 403 | 9,333 | 3,633 | 18,141 |
Foreign currency translation adjustments | 4,334 | (1,413) | 6,014 | 3,944 |
Other comprehensive income | 4,737 | 7,920 | 9,647 | 22,085 |
Tax Expense (Benefit) | ||||
Change in net unrealized gains on investments | 193 | 3,329 | 1,521 | 6,446 |
Less: reclassification adjustment for net gains included in net income | (51) | (63) | (249) | (97) |
Net unrealized gains | 142 | 3,266 | 1,272 | 6,349 |
Foreign currency translation adjustments | 1,130 | 290 | 1,485 | 2,352 |
Other comprehensive income | 1,272 | 3,556 | 2,757 | 8,701 |
Net-of-Tax Amount | ||||
Change in net unrealized gains on investments | 355 | 6,182 | 2,822 | 11,971 |
Less: reclassification adjustment for net gains included in net income | (94) | (115) | (461) | (179) |
Net unrealized gains | 261 | 6,067 | 2,361 | 11,792 |
Foreign currency translation adjustments | 3,204 | (1,703) | 4,529 | 1,592 |
Other comprehensive income | $ 3,465 | $ 4,364 | $ 6,890 | $ 13,384 |