Stewart Information Services (STC) 8-K Results of Operations and Financial Condition

Exhibit 99.1

NEWS     from:
	STEWART INFORMATION SERVICES CORPORATION
	P.O. Box 2029, Houston, Texas 77252-2029
	www.stewart.com
	Contact:	Ted C. Jones
		Director - Investor Relations
		(713) 625-8014

FOR RELEASE AT 6AM CDT

Stewart Reports Earnings for 2005

HOUSTON, February 16, 2006 – Stewart Information Services Corporation (NYSE-STC) today reported the results of its operations for the year and fourth quarter ended December 31, 2005. (Dollar amounts in the table below are in millions, except for per share figures.)

	Year 2005		Year 2004
Total revenues	$	2,424.1	$	2,176.3
Pretax earnings before  minority interests		165.0		146.7
Net earnings		88.8		82.5
Net earnings per diluted share		4.86		4.53

	Fourth Quarter 2005			Fourth Quarter 2004
Total revenues	$	622.6		$	612.3
Pretax earnings before minority interests		21.2	(a)		37.4	(b)
Net earnings		9.1	(a)		20.3	(b)
Net earnings per diluted share		0.50	(a)		1.11	(b)

     (a)  Includes an addition to large title loss reserves aggregating $10.5 million ($6.8 million after taxes, or $0.37 per diluted share). 

     (b)  Includes charge relating to litigation of $4.4 million ($2.9 million after taxes, or $0.16 per diluted share).

Financial Highlights

           • Revenues for the year 2005 set an all-time record high at $2.4 billion. This represented an increase of 11.4 percent over the year 2004. Pretax earnings (calculated before minority interests) for the year 2005 were $165.0 million, as compared with $146.7 million for 2004.

           • The Company’s pretax profit margin was 6.8 percent for the year 2005 compared with 6.7 percent for 2004. In comparing 2005 with 2004, pretax earnings were increased by a higher level of commercial transactions and a higher mix of revenues from direct operations compared with lower-margin agency business.  Acquisitions increased revenues by $37.3 million and pretax earnings by $8.0 million in 2005.

           • Profits for the year 2005 versus 2004 were impacted by higher employee costs and other operating expenses because the Company continues to incur the costs of investment in technology advancements.  The Company’s goal is to increase productivity, gain market share and provide superior service to its customers. Profits in 2005 were also impacted by an addition to title loss reserves of $10.5 million in the fourth quarter for large losses relating to a mortgage fraud and a defalcation.

           • For the fourth quarter of 2005, revenues increased 1.7 percent to $622.6 million compared with the fourth quarter of 2004.  Pretax earnings and margins were $21.2 million and 3.4 percent, respectively, for the fourth quarter of 2005 and $37.4 million and 6.1 percent, respectively, for the same quarter in 2004.  As noted in the yearly analysis above, earnings for the fourth quarter of 2005 were decreased by the increase to large title loss reserves and by higher employee costs and other operating expenses.

           • The fourth quarter of 2005 also includes charges relating to corrections of the Company’s accounting for leases and employee vacations of $2.8 million and $2.1 million, respectively. The combined total of $3.2 million after taxes, or $0.17 per diluted share, is immaterial for the year as to net earnings, cash flows and stockholders’ equity.

           • Stewart’s book value per share increased by 9.7 percent to $42.21 per share at December 31, 2005 as compared with $38.48 at December 31, 2004.

           • Stewart paid $0.75 per share as its annual cash dividend for 2005, a 63 percent increase from $0.46 per share in 2004.

Title orders declined in the fourth quarter of 2005 by 2.2 percent from the same period a year ago. Although orders were higher in October 2005 than October 2004, there was a decline in each of the months of November and December from the same month a year earlier. A rise in mortgage interest rates was the major reason for the decline.

“The year resulted in all-time record revenues,” stated Stewart Morris, Jr., co-chief executive officer.  “We seek to improve our profit margins and are taking actions to improve future performance.  We monitor employee levels and other costs with a goal of maintaining a minimum staff necessary to provide the customer service needed to continue growing market share.  Our technology is facilitating increased productivity and customer responsiveness and service.  We will continue to invest heavily in 2006 in enhancements to our production and transaction management system, as well as the development of new technology products that serve real estate information and lender markets. We believe these strategies will position us for strong gains in market share. Accretive acquisitions continue to help our earnings.”

“We continued to grow our higher-profit commercial business in 2005,” added Malcolm S. Morris, co-chief executive officer.  “Our expansion in international markets is even more promising than before.  Accordingly, we have evaluated our resources and reorganized our management, putting forward our most talented and experienced staff.  We are building business on our sound financial position.  We believe all of our strategies, when put together, will position us for future growth.”

On February 3, 2006 Stewart completed its acquisition of Monroe Title Insurance Corporation, expanding its presence in upstate New York and improving its ability to meet the needs of Stewart’s national customer base.  The acquisition is expected to further enhance Monroe’s market position while opening markets to Stewart’s real estate products and services.

Stewart Information Services Corporation is a technology-driven, strategically competitive, real estate information and transaction management company providing title insurance and related information services through more than 8,500 policy-issuing offices and agencies in the United States and international markets.  Stewart also provides post-closing lender services, default management solutions, automated county clerk land records, property ownership mapping, geographic information systems, property information reports, flood certificates, document preparation, background checks and expertise in tax-deferred exchanges. More information can be found at www.stewart.com.

This press release may contain forward-looking statements, which include all statements other than statements of historical facts. Forward-looking statements are not guarantees of performance and no assurance can be given that Stewart’s expectations will be achieved. In particular, historical order counts do not necessarily indicate future revenues because Stewart cannot predict the number of orders that will result in closings.

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STEWART INFORMATION SERVICES CORPORATION
STATEMENTS OF EARNINGS
(In thousands of dollars, except per share amounts)

	Three months ended Dec 31					Year ended Dec 31
	2005(1)			2004(2)		2005			2004
Revenues
Title insurance:
Direct operations		262,555			231,784		1,041,977			880,697
Agency operations		329,765			355,600		1,265,495			1,201,075
Real estate information services		21,420			17,567		82,495			68,907
Investment income		7,654			6,272		29,127			22,514
Investment and other gains – net		1,183			1,053		4,966			3,099
		622,577			612,276		2,424,060			2,176,292
Expenses
Amounts retained by agencies		263,148			291,472		1,025,929			980,457
Employee costs		181,246			154,747		694,599			591,092
Other operating expenses		102,234			89,569		373,161			324,897
Title losses and related claims		44,324			30,560		128,102			100,841
Depreciation and amortization		9,312			8,044		33,954			31,025
Interest		1,073			449		3,351			1,248
		601,337			574,841		2,259,096			2,029,560
Earnings before taxes and minority interests		21,240			37,435		164,964			146,732
Income taxes		6,727			13,353		56,768			50,696
Minority interests		5,412			3,803		19,431			13,518
Net earnings		9,101			20,279		88,765			82,518
��
Average number of diluted shares  outstanding (000)		18,279			18,224		18,246			18,199
Earnings per share - diluted		0.50			1.11		4.86			4.53
Segment information:
Title revenues		601,157			594,709		2,341,565			2,107,385
Title pretax earnings before minority interests		20,558			36,640		154,391			143,154
REI revenues		21,420			17,567		82,495			68,907
REI pretax earnings before minority interests		682			795		10,573			3,578
Selected financial information:
Cash flow from operations		40,236			26,713		173,508			170,410
Title loss payments – net of recoveries		22,385			22,192		82,162			68,408
Changes in other comprehensive earnings - net of taxes		(2,916	)		1,262		(8,160	)		(1,231	)
Number of title orders opened (000):
October		69.6			66.7
November		62.2			64.3
December		55.2			60.1
Quarter		187.0			191.1

	Dec 31 2005		Dec 31 2004
Stockholders’ equity		766,313		697,313
Number of shares outstanding (000)		18,154		18,121
Book value per share		42.21		38.48

(1)  Includes an addition to large title loss reserves aggregating $10.5 million ($6.8 million after taxes, or $0.37 per diluted share). 

(2)  Includes charge relating to litigation of $4.4 million ($2.9 million after taxes, or $0.16 per diluted share).

STEWART INFORMATION SERVICES CORPORATION
BALANCE SHEETS (condensed)
(In thousands of dollars)

	Dec 31 2005			Dec 31 2004
Assets
Cash and cash equivalents		134,734			121,383
Short-term investments		206,717			181,195
Investments – statutory reserve funds		449,475			401,814
Investments – other		85,802			68,793
Receivables – premiums from agencies		49,397			42,618
Receivables – other		39,265			37,659
Property and equipment		85,762			83,391
Title plants		58,930			52,679
Goodwill		155,624			124,636
Intangible assets		15,268			16,988
Other assets		80,177			62,197
		1,361,151			1,193,353
Liabilities
Notes payable		88,413			49,930
Accounts payable and accrued liabilities		125,255			101,544
Estimated title losses		346,704			300,749
Deferred income taxes		15,784			29,335
Minority interests		18,682			14,482
		594,838			496,040
Contingent liabilities and commitments
Stockholders’ equity
Common and Class B Common Stock and additional paid-in capital		145,367			144,135
Retained earnings		619,232			543,295
Accumulated other comprehensive earnings		5,628			13,788
Treasury stock		(3,914	)		(3,905	)
Total stockholders’ equity		766,313			697,313
		1,361,151			1,193,353

February 16, 2006