Exhibit 99.1
Stewart Sets Third Quarter Records
HOUSTON, Oct. 24 /PRNewswire-FirstCall/ -- Stewart Information Services
Corporation (NYSE: STC) reported revenues, earnings and earnings per share at
the highest level of any third quarter in our history. Book value increased
to $33.75 per share, also a record.
Earnings for the three months ended September 30, 2003 were $42.1 million,
or $2.34 per diluted share, compared to $21.6 million, or $1.22 per diluted
share, for the third quarter of 2002. Revenues in the third quarter increased
33 percent to $630 million from $473 million for the same period last year.
Record orders in the second quarter of 2003 provided strong volume in the
third quarter.
Title orders in the third quarter of 2003 were 4 percent lower than the
same quarter a year ago. Orders dropped below prior-year totals in August.
September was 29% below the same month a year ago. The decline in orders was
the result of a rise in mortgage interest rates and consisted mostly of
refinance transactions. Interest rates have leveled off at about the
6 percent level. The real estate market remains fundamentally strong.
Total revenues for the first nine months of 2003 were $1.6 billion, up
33 percent from $1.2 billion for the same period a year ago. Earnings for the
first three quarters totaled $103.0 million, or $5.74 per diluted share,
compared to $50.7 million, or $2.84 per share, for the first nine months of
2002.
"We are committed enhancing shareholder value. Year to date we have
increased our book value per share from $27.84 to $33.75," said Stewart
Morris, Jr., president and co-chief executive officer. "Our book value per
share has increased approximately 190 percent in the past ten years, up from
$11.64 in the third quarter of 1993. Our earnings and liquidity position
allows us to resume a cash dividend in the fourth quarter, as announced
previously," added Morris.
"Our expansion into South Korea this past quarter continues our
international growth strategy. In addition, we remain committed to further
increasing higher-margin commercial business and growing market share," added
Morris.
Stewart is again serving as the exclusive program sponsor of the
Technology Learning Center (TLC), presented at the National Association of
Realtors(R) (NAR) Conference in San Francisco this November. This is the
fifth consecutive year for Stewart to sponsor the TLC. Through the courses
presented at the NAR and an array of technology resources, Stewart enables
Realtors to provide the best service to their buyers and sellers.
"We were extremely pleased to announce this past quarter the election of
Robert L. Clarke as an advisory director," said Malcolm S. Morris, chairman
and co-CEO. "Mr. Clarke joins our stellar board of directors in providing
guidance and vision to further augment shareholder value." Mr. Clarke served
as Comptroller of the Currency of the United States from 1985 to 1992. In
March 1992, he rejoined the prominent Houston law firm Bracewell & Patterson
LLP where he serves as senior partner and is the founder of its financial
services practice.
"Our technology workhorse platform, AIM(R) for Windows(R), is now in use
by more than 11,000 users at 1,000 sites, increasing the productivity of our
associates and agents," said Morris. AIM for Windows is a powerful title and
escrow system for order entry, document preparation, closing, escrow
accounting, file tracking and management. The software is available as a
traditional desktop installation or with access on the Internet through
Titlelogix(R). It is the product of Landata Systems, Inc., Stewart's wholly-
owned technology subsidiary.
Stewart Information Services Corporation is a technology driven,
strategically competitive, global real estate information company. Stewart
provides title insurance and related information services through more than
7,000 issuing locations in the United States and several international
markets. Stewart meets the needs of the real estate and mortgage industries
through the delivery of information services required for settlement using e-
commerce. These services include title reports, flood determinations,
document preparation, property reports and background checks. Stewart also
supplies post-closing services to lenders, automated county clerk land
records, property and land ownership mapping, and GIS for governmental
entities. Stewart also provides expertise in tax-deferred exchanges. More
information about Stewart can be found at www.stewart.com .
This press release may contain forward-looking statements, which include
all statements other than statements of historical fact. 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.
SUMMARY OF OPERATIONS
Stewart Information Services Corporation
Three Months
ended September 30
2003 2002
Revenues $629,675,000 $473,345,000
Net earnings $42,068,000 $21,597,000
Average shares - diluted 18,006,000 17,729,000
Earnings per share:
Basic $2.35 $1.22
Diluted $2.34 $1.22
Nine months
ended September 30
2003 2002
Revenues $1,635,291,000 $1,228,447,000
Net earnings $102,973,000 $50,652,000
Average shares - diluted 17,937,000 17,836,000
Earnings per share:
Basic $5.78 $2.86
Diluted $5.74 $2.84
STEWART INFORMATION SERVICES CORPORATION
STATEMENTS OF EARNINGS
(In thousands of dollars, except per share amounts)
Three months Nine months
ended Sept 30 ended Sept 30
2003 2002 2003 2002
Revenues
Title insurance:
Direct operations 261,583 175,395 694,821 474,623
Agency operations 340,728 275,398 863,566 687,941
Real estate information
services 21,683 18,376 61,567 51,624
Investment income 5,262 5,597 14,580 15,093
Investment (losses)
gains - net 419 (1,421) 757 (834)
629,675 473,345 1,635,291 1,228,447
Expenses
Amounts retained by
agencies 279,965 228,384 710,366 565,233
Employee costs 157,192 114,898 436,372 325,442
Other operating expenses 86,727 65,925 226,174 180,236
Title losses and related
claims 25,894 20,882 66,561 51,950
Depreciation 6,422 5,196 18,499 15,824
Interest 202 178 563 693
Minority interests 4,755 2,445 11,237 6,509
561,157 437,908 1,469,772 1,145,887
Earnings before taxes 68,518 35,437 165,519 82,560
Income taxes 26,450 13,840 62,546 31,908
Net earnings 42,068 21,597 102,973 50,652
Average number of shares
outstanding (000) 18,006 17,729 17,937 17,836
Earnings per share - diluted 2.34 1.22 5.74 2.84
Segment information:
Title revenues 607,992 454,969 1,573,724 1,176,823
Title pretax earnings 63,865 32,064 153,281 75,746
REI revenues 21,683 18,376 61,567 51,624
REI pretax earnings 4,653 3,373 12,238 6,814
Selected financial
information (000):
Cash flow from operations 73,073 49,833 157,984 92,418
Title loss payments -
net of recoveries 15,564 9,490 39,340 33,136
Other comprehensive
earnings - net of taxes (2,316) 5,857 4,326 7,211
Average number of basic
shares 17,893 17,637 17,826 17,740
Number of title orders
opened 239 248 816 593
Sept 30 Dec 31
2003 2002
Stockholders' equity 604,254 493,592
Number of shares outstanding 17,903 17,731
Book value per share 33.75 27.84
STEWART INFORMATION SERVICES CORPORATION
BALANCE SHEETS (condensed)
(In thousands of dollars)
Sept 30 Dec 31
2003 2002
Assets
Cash and cash equivalents 132,962 139,156
Short-term investments 118,986 50,673
Investments - statutory reserve funds 373,288 306,501
Investments - other 63,462 69,260
Receivables 71,101 69,041
Property and equipment 70,837 60,592
Title plants 41,793 40,307
Goodwill 76,873 66,885
Other 52,078 39,858
1,001,380 842,273
Liabilities
Notes payable 24,715 14,195
Accounts payable and accrued
liabilities 79,164 82,248
Estimated title losses 258,479 230,058
Deferred income taxes 20,646 11,284
Minority interests 14,122 10,896
Contingent liabilities and commitments
Stockholders' equity
Common and Class B Common Stock and
additional paid-in capital 138,290 134,927
Retained earnings 456,199 353,226
Accumulated other comprehensive earnings 13,670 9,344
Treasury stock (3,905) (3,905)
Total stockholders' equity 604,254 493,592
1,001,380 842,273
October 24, 2003