1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-58022

THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS
NOT COMPLETE AND MAY BE CHANGED. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS ARE NOT AN OFFER TO SELL THESE SECURITIES AND ARE NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS SUPPLEMENT DATED JULY 25, 2001

PROSPECTUS SUPPLEMENT

(TO PROSPECTUS DATED JUNE 26, 2001)

2,500,000 SHARES

[STEWART LOGO]

COMMON STOCK

----------------------

Stewart Information Services Corporation is selling all of the shares. The
shares trade on the New York Stock Exchange under the symbol "STC." On July 24,
2001, the last sale price of the shares as reported on the New York Stock
Exchange was $19.67 per share.

INVESTING IN THE COMMON STOCK INVOLVES RISKS THAT ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE S-8 OF THIS PROSPECTUS SUPPLEMENT.
----------------------

PER SHARE TOTAL
--------- -----

Public offering price....................................... $ $
Underwriting discount....................................... $ $
Proceeds, before expenses, to Stewart....................... $ $

The underwriters may also purchase up to an additional 375,000 shares from
Stewart at the public offering price, less the underwriting discount, within 30
days from the date of this prospectus supplement to cover over-allotments.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.

The shares will be ready for delivery on or about August , 2001.
----------------------
MERRILL LYNCH & CO.
FERRIS, BAKER WATTS
Incorporated
FOX-PITT, KELTON

----------------------

The date of this prospectus supplement is , 2001.
2

[INSIDE FRONT COVER]

STEWART

[Five segment pie chart graphic (parts 1 and 2 exploded) displaying the
following information:]

1. Financial Strength [list of ratings: Demotech A", Fitch A+, LACE A+ and
Moodys A2]

2. Industry Leading Technology [photograph of two individuals looking at a
computer screen]

3. Adding International Markets [aerial picture of Earth]

4. Commercial Business Expansion [photograph with ground level view of skyscraper]

5. Market Share Growth [photograph of two individuals reviewing information]

PRODUCTS & SERVICES

* Title insurance * Online transaction management * E-Business solutions

* Closing and settlement service * Real estate information * Electronic mortgage documents

* International title services * Mapping & surveying products * Mortgage origination services

* 1031 exchanges * Land record automation * Mortgage postproduction services

[Stewart NYSE symbol]

Stewart Information Services Corporation 1980 Post Oak Boulevard Houston, Texas 77056 1-800 STEWART (783-9278)

TABLE OF CONTENTS

PAGE NO.
--------

PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary............................... S-4
Risk Factors................................................ S-8
Use of Proceeds............................................. S-10
Dividend Policy............................................. S-10
Capitalization.............................................. S-11
Price Range of Common Stock................................. S-12
Selected Financial Data..................................... S-13
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. S-14
Business.................................................... S-19
Management.................................................. S-23
Share Ownership of Management and Certain Stockholders...... S-26
Underwriting................................................ S-29
Legal Matters............................................... S-31
Experts..................................................... S-31

PROSPECTUS
Business.................................................... 1
Cautionary Statement Regarding Forward-Looking Statements... 1
Use of Proceeds............................................. 2
Description of Common Stock................................. 2
Plan of Distribution........................................ 5
Legal Matters............................................... 6
Experts..................................................... 7
Where You Can Find Additional Information................... 7

----------------------

You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. If
anyone provides you with different or inconsistent information, you should not
rely on it. We have not, and the underwriters have not, authorized any other
person to provide you with different information. We are not, and the
underwriters are not, making an offer to sell our common stock in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference is accurate only as of
their respective dates. Our business, financial condition, results of operations
and prospects may have changed since those dates.

S-3
4

PROSPECTUS SUPPLEMENT SUMMARY

As used in this prospectus supplement and the accompanying prospectus,
"we," "us," "our" and "Stewart" mean Stewart Information Services Corporation
and our subsidiaries unless the context indicates otherwise.

STEWART INFORMATION SERVICES CORPORATION

WHO WE ARE

We are a leading, technology driven, strategically competitive, global
title insurance and real estate information company with a 108-year tradition of
growth and quality. We insure title to real estate and provide related services
in all 50 states, the District of Columbia, Canada and several other
international markets through more than 5,600 issuing locations. Our primary
business is title insurance in which we are the fourth largest company, with
approximately 10% of the market share of all title insurance premiums written in
the United States during 2000.

In addition, we are a leading provider of real estate information
technology and connectivity. We meet the needs of the real estate and mortgage
industries through the electronic delivery of services required for settlement
of real property closings. These services include:

- post-closing services to lenders;
- title information; - land surveys;
- flood determinations; - field services;
- tax-deferred exchanges; - credit reports;
- document preparation; - tax services;
- property appraisals; - mapping and
- property reports; - construction and maintenance of title
- background checks; plants.

U.S. TITLE INSURANCE MARKET

The market for title insurance in the United States is large. Growth in the
industry is tied closely to various overall economic factors, including interest
rates, sales of new and existing homes, the refinancing of previously issued
mortgages, as well as growth in the gross national product and inflation.
According to Corporate Development Services, Inc., an independent title
insurance consulting firm, the total statutory net premiums written by the
entire U.S. title insurance industry was $5.0 billion in 1996, $5.5 billion in
1997, $7.5 billion in 1998, $8.1 billion in 1999 and $7.3 billion in 2000.

The U.S. title insurance industry is concentrated among a handful of
industry participants. According to Corporate Development Services, the top five
title insurance companies accounted for 89% of net premiums written in 2000.
Independent title insurance companies accounted for the remaining 11% of net
premiums written in 2000.

STRATEGY

Our strategy is to maximize operating profits by increasing our market
share in the title insurance business. In addition, we plan to broaden our
market penetration by focusing on our real estate related services. The key
elements of our strategy include:

- taking advantage of the ongoing industry consolidation by positioning
ourselves to grow market share in all segments, including in the
higher-profit commercial lines of businesses where we have expanded our
offices and personnel;

- continuing to supplement our internal growth through select acquisitions
of businesses or technologies that will enable us to enter new markets,
provide services that we currently do not offer or that advance our
technology;

S-4
5

- maintaining our sound, fiscal management policies and the excellent
liquidity of our balance sheet, for which we earned the highest financial
stability ratings awarded to the largest companies in the title industry
by the title industry's leading rating companies (A" from Demotech, Inc.,
A+ from Fitch, A+ from Lace Title Rating Corporation, and A2 from
Moody's);

- continuing to embrace change with industry-leading technology and
automation products and services to increase productivity in the title
office and to accelerate the real estate closing process for lenders,
real estate professionals and consumers;

- extending the reach of our international business into countries that
offer the most significant growth opportunities for our business and

- building on the strength of our existing executive and regional
leadership team, which has an average of 27 years of experience in our
industry.

ACQUISITION PROGRAM

As part of our growth strategy, we selectively target companies, businesses
or assets to acquire that complement our business. From January 1, 1998 through
March 31, 2001, our major acquisitions included the purchase of controlling or
equity interests in an aggregate of 24 title companies, two title underwriters
and six real estate information companies. For these acquisitions, we paid an
aggregate of $12.6 million in the first three months of 2001, and $19.6 million,
$13.3 million and $7.2 million in the years 2000, 1999 and 1998, respectively.
The largest individual purchase price for any of these acquisitions was $7.0
million and the average price was $1.6 million.

RECENT DEVELOPMENTS

On July 24, 2001, we issued a press release in which we reported net
earnings for the three months ended June 30, 2001 of $15.4 million, compared to
$1.9 million for the same period in 2000. On a diluted per share basis, net
earnings were $1.00 for the second quarter of 2001 compared to $.13 for the
second quarter of 2000. Revenues in the second quarter increased 40% to $314
million from $225 million in the same period last year. The increase in
earnings, earnings per share and revenues were primarily a result of low
interest rates and a favorable real estate economy. A part of our growth in this
period was attributable to acquisitions.

For the six months ended June 30, 2001, we earned $18.5 million, or $1.21
per diluted share, compared to a loss of $1.5 million, or $.10 per diluted
share, for the same six-month period in 2000. Revenues through June 30, 2001
increased 29% to $559 million compared to $433 million for the six months ended
June 30, 2000.

Book value per share was $20.84 at June 30, 2001.

---------------------

We are a Delaware corporation. Our principal executive offices are located
at 1980 Post Oak Boulevard, Houston, Texas 77056, and the telephone number at
these offices is (713) 625-8100. You may contact us through Ted C. Jones, Ph.D.,
Director of Investor Relations.
S-5
6

THE OFFERING

Common stock offered by Stewart..... 2,500,000 shares

Shares to be outstanding after the offering:
Common stock(1)................................. 16,707,834 shares
Class B common stock(1)......................... 1,050,012 shares
Total...................................... 17,757,846 shares

Use of proceeds..................... We estimate that we will receive net
proceeds from the offering, without
exercise of the over-allotment option,
of approximately $46.1 million. We
intend to use the net proceeds to
acquire companies, businesses or assets
complementary to our business, to pay
down existing bank debt and for working
capital. See "Use of Proceeds" on page
S-10.

Dividend policy..................... We do not currently pay dividends on
our common stock. See "Dividend Policy"
on page S-10.

Risk factors........................ An investment in our common stock
involves risks. See "Risk Factors" in
this prospectus supplement, beginning
on page S-8.

New York Stock Exchange symbol...... STC

The number of shares outstanding after the offering is based on the number
of shares of our common stock outstanding as of July 23, 2001. Unless we
indicate otherwise, all information in this prospectus supplement assumes that
the underwriters' over-allotment option is not exercised and excludes shares
reserved for issuance on the exercise of options granted or available under our
stock option plans. If the over-allotment option is exercised in full, we will
issue and sell an additional 375,000 shares.

- ---------------

(1) Holders of common stock and Class B common stock have substantially similar
rights, except that no cash dividends may be paid on Class B common stock
and the holders of Class B common stock currently have the right to elect
four of our nine directors. In addition, the vote of six of the nine
directors is required to approve matters brought before the Board of
Directors. For more information about the common stock and the Class B
common stock, see "Description of Common Stock" beginning on page 2 of the
accompanying prospectus.
S-6
7

SELECTED FINANCIAL DATA

The following table sets forth selected financial data and other operating
information that should be read together with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere in
this prospectus supplement. The following table also should be read together
with the consolidated financial statements, related notes and other financial
information incorporated by reference into the prospectus accompanying this
prospectus supplement. The selected financial data as of and for each of the
five years ended December 31, 2000 are derived from our consolidated financial
statements. The financial data as of and for the three month periods ended March
31, 2001 and 2000 are derived from our unaudited consolidated financial
statements. Operating results for the three months ended March 31, 2001 are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 2001.

AS OF AND FOR THE
THREE MONTHS
ENDED MARCH 31, AS OF AND FOR THE YEARS ENDED DECEMBER 31,
----------------- --------------------------------------------
2001 2000 2000 1999 1998 1997 1996
------- ------- ------ -------- ------ ------ ------
(IN MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)

OPERATING DATA:
Total revenues.......................... 244.3 208.2 935.5 1,071.3 968.8 708.9 656.0
Title segment:
Operating revenues.................... 223.9 191.6 861.2 991.6 899.7 657.3 609.4
Investment income..................... 5.5 4.7 21.8 20.3 18.5 15.9 14.5
Investment gains (losses)............. .4 (.3) .0 .3 .2 .4 .1
Total revenues........................ 229.8 196.0 883.0 1,012.2 918.4 673.6 624.0
Pretax earnings (losses).............. 4.3 (3.7) 5.6 43.6 73.2 29.2 22.5
Real Estate Information segment:
Revenues.............................. 14.5 12.2 52.5 59.1 50.4 35.3 32.0
Pretax earnings (losses).............. .7 (1.7) (4.4) 3.0 3.1 (5.5) .4
Title loss provisions................... 9.6 8.6 39.0 44.2 39.2 29.8 33.8
% of title operating revenues......... 4.3 4.5 4.5 4.5 4.4 4.5 5.6
Net earnings (losses)................... 3.1 (3.4) .6 28.4 47.0 15.3 14.4
Cash provided (used) by operations...... 10.2 (9.1) 31.9 57.9 86.5 36.0 38.3

BALANCE SHEET DATA:
Total assets............................ 575.8 525.3 563.4 535.7 498.5 417.7 383.4
Notes payable........................... 40.8 22.2 32.5 19.1 16.2 19.1 12.3
Stockholders' equity.................... 303.1 283.1 295.1 284.9 260.4 209.5 191.0

PER SHARE DATA(1):
Average shares-diluted (in millions).... 15.3 14.8 15.0 14.6 14.2 13.8 13.5
Net earnings (losses)-basic............. .20 (.23) .04 1.96 3.37 1.12 1.08
Net earnings (losses)-diluted........... .20 (.23) .04 1.95 3.32 1.11 1.07
Net earnings (losses)-diluted, before
goodwill amortization................. .24 (.20) .16 2.06 3.40 1.18 1.14
Stockholders' equity.................... 19.91 19.17 19.61 19.39 18.43 15.17 14.17

- ---------------

(1) Restated for a two-for-one stock split in May 1999 effected as a stock
dividend.

S-7
8

RISK FACTORS

Before you invest in our common stock, you should be aware that there are
various risks, including those described below. You should consider carefully
these risk factors together with all of the other information included in this
prospectus supplement, the accompanying prospectus and the documents we have
incorporated by reference before buying shares of our common stock.

If any of the following risks actually occur, our business, financial
condition, results of operations or prospects could be materially adversely
affected. In such case, the trading price of our common stock could decline, and
you could lose part or all of your investment.

RESULTS OF OPERATIONS AND FINANCIAL CONDITION MAY BE AFFECTED BY CHANGES IN
ECONOMIC CONDITIONS

The demand for title insurance depends in large part on the volume of
commercial and residential real estate transactions. The volume of these
transactions historically has been influenced by factors such as interest rates
and the state of the overall economy. Typically, when interest rates are
increasing or when the economy is experiencing a downturn or recession, real
estate activity declines. As a result, the title insurance industry tends to
experience decreased revenues and earnings. Our volume of revenues and earnings
historically has been cyclical, and we expect it to fluctuate in the future.
Changes in interest rates also may have an adverse impact on our return on
invested cash, the market value of our investment portfolio and the interest
paid on our bank debt.

COMPETITION IN THE TITLE INSURANCE INDUSTRY AFFECTS OUR REVENUES

Competition in the title insurance business is strong, particularly with
respect to price, service and expertise. Larger commercial customers and
mortgage originators also look to the size and financial strength of the title
insurer. Although we are the fourth largest title insurance underwriter based on
market share, Fidelity National Financial, Inc., The First American Corporation
and LandAmerica Financial Group, Inc. each is substantially larger than we are
and has significantly greater capital and other resources than we do. The
removal of regulatory barriers in the future also may result in new competitors,
including financial institutions, entering the title insurance business.
Competition among the major title insurance companies and any new entrants could
lower our premium and fee revenues.

RAPID TECHNOLOGICAL CHANGES IN OUR INDUSTRY REQUIRE TIMELY AND COST-EFFECTIVE
RESPONSES

Technological advances occur rapidly in the title insurance industry.
Industry standards evolve and title insurers introduce new products and services
frequently. We believe that our future success depends on our ability to
anticipate technological changes and to offer products and services that meet
evolving standards on a timely and cost-effective basis.

OUR ABILITY TO IMPLEMENT OUR ACQUISITION STRATEGY MAY BE ADVERSELY AFFECTED BY
CERTAIN FACTORS

As part of our overall growth strategy, we intend to selectively acquire
businesses and technologies in our industry that will allow us to enter new
markets, provide services that we currently do not offer or advance our existing
technology. Our ability to implement this acquisition strategy will depend on
our success in identifying and consummating acquisitions of businesses on
favorable economic terms. The success of this strategy also will depend on our
ability to integrate the business, operations, products and personnel of any
acquired businesses, retain key personnel of any acquired businesses, introduce
new products and services on a timely basis and increase the strength of our
existing management team. Although we are actively seeking acquisition
candidates, we can give no assurance that we will be successful in these
efforts. If we are unable to acquire appropriate businesses on favorable
economic terms, or at all, or are unable to introduce new products and services
successfully, our business, results of operations, financial condition and
prospects could be materially adversely affected.

S-8
9

WE RELY ON DIVIDENDS FROM OUR INSURANCE SUBSIDIARIES

We are a holding company, and our principal assets are the securities of
our insurance subsidiaries. Because of this structure, we depend primarily on
receiving sufficient dividends from our insurance subsidiaries to meet our debt
service obligations and to pay our operating expenses. The insurance statutes
and regulations of some states require us to maintain a minimum amount of
statutory capital and restrict the ability of our insurance subsidiaries to pay
dividends to us. In this regard, Texas insurance law restricts the ability of
Stewart Title Guaranty Company to pay dividends to us. Stewart Title Guaranty
Company is a wholly owned subsidiary of Stewart and the principal source of our
cash flow. As of March 31, 2001, under Texas insurance law Stewart Title
Guaranty Company could pay dividends or make distributions of up to $39.0
million. In addition, however, Stewart Title Guaranty Company voluntarily
restricts dividends to us so that it can maintain statutory surplus and
liquidity at competitive levels. A title insurer's ability to pay claims can
significantly affect the decision of lenders and other customers when buying a
policy from a particular insurer. If our subsidiaries were significantly
restricted from making distributions to us, we would be limited in our ability
to continue our acquisitions, stock repurchase program and other programs.

OUR INSURANCE SUBSIDIARIES ARE SUBJECT TO GOVERNMENT REGULATION

State authorities regulate our insurance subsidiaries in the various states
in which they do business. These regulations generally are intended for the
protection of policyholders rather than security holders. The nature and extent
of these regulations vary from jurisdiction to jurisdiction, but typically
involve:

- approval of premium rates for insurance;

- standards of solvency and minimum amounts of statutory capital surplus
that must be maintained;

- limitations on types and amounts of investments;

- establishing reserves, including statutory premium reserves, for losses
and loss adjustment expenses;

- regulation of dividend payments and other transactions between
affiliates;

- prior approval of the acquisition and control of an insurance company or
of any company controlling an insurance company;

- licensing of insurers and agents;

- regulation of reinsurance;

- restrictions on the size of risks that may be insured by a single
company;

- regulation of underwriting and marketing practices;

- deposits of securities for the benefit of policyholders;

- approval of policy forms;

- methods of accounting and

- filing of annual and other reports with respect to financial condition
and other matters.

These regulations may impede or impose burdensome conditions on rate
increases or other actions that we might want to take to enhance our operating
results. In addition, state regulatory examiners perform periodic examinations
of insurance companies.

POSSIBLE ANTI-TAKEOVER EFFECTS IN OUR CERTIFICATE OF INCORPORATION AND BY-LAWS

Our certificate of incorporation and by-laws, as well as Delaware
corporation law and the insurance laws of various states, all contain certain
provisions that could have the effect of discouraging a prospective acquiror
from making a tender offer for our shares, or which may otherwise delay, defer
or prevent a change in control of Stewart. For more information about these
provisions, see "Description of Common Stock -- Voting Rights" and "Description
of Common Stock -- Anti-Takeover Provisions" on pages 2 through 5 of the
accompanying prospectus.

S-9
10

USE OF PROCEEDS

We intend to use the net proceeds from this offering, which we estimate to
be approximately $46.1 million, to acquire companies, businesses or assets
complementary to our business, to pay down approximately $22.2 million of bank
debt and for working capital. As of the date of this prospectus supplement, we
have not identified definitively any material acquisition for which we may use
the net proceeds of this offering. Pending these uses, we may invest a portion
of the proceeds in short-term investment grade securities.

Notes payable at March 31, 2001 aggregated $40.8 million, of which $34.0
million was bank debt. The remaining debt was owed to individuals primarily in
connection with acquisitions. The bank debt consists of a number of loans to our
subsidiaries under separate loan agreements. The largest balance owed on a loan
was $2.8 million. Substantially all of the loans bear interest at a rate of
LIBOR plus .75%. At March 31, 2001, LIBOR plus .75% equalled 5.06%. We used the
amounts borrowed from the banks to acquire companies, start new companies, buy
equipment and finance operations for our technology and REI operations. The
loans typically have terms of one year to five years, are unsecured and are
guaranteed by us. We expect that we will be able to re-borrow the amounts repaid
with the proceeds of this offering, although we can give no assurance in this
regard.

DIVIDEND POLICY

We paid regular quarterly cash dividends on our common stock from 1972
through 1999. During 1999, our Board of Directors:

- determined that our regular quarterly dividend should be discontinued in
favor of returning those and additional funds to our stockholders through
a stock repurchase program and

- approved a plan to repurchase up to 680,000 shares (5%) of our then
outstanding common stock.

During 1999 and 2000, we paid quarterly cash dividends of $.04 per share to
holders of our common stock on April 30, 1999, July 30, 1999, October 29, 1999
and January 31, 2000. We have not paid any dividends since January 31, 2000.
Under our stock repurchase program, we repurchased 116,900 shares of our common
stock during 2000. We have not repurchased any shares of our common stock during
2001.

Our certificate of incorporation provides that no cash dividends may be
paid on the Class B common stock.

S-10
11

CAPITALIZATION

The following table shows our capitalization as of March 31, 2001:

- on an actual basis and

- as adjusted to give effect to this offering and the application of the
estimated net proceeds from this offering. See "Use of Proceeds."

You should read this table in conjunction with our selected financial data
presented elsewhere in this prospectus supplement along with our consolidated
financial statements and the notes to our consolidated financial statements
incorporated by reference in the accompanying prospectus.

AS OF MARCH 31, 2001
--------------------
AS
ACTUAL ADJUSTED
------ --------
(UNAUDITED)
(IN MILLIONS OF
DOLLARS, EXCEPT PER
SHARE DATA)

Notes payable............................................... 40.8 18.6
Minority interests.......................................... 7.1 7.1
Stockholders' equity:
Common stock, $1.00 par value: 30,000,000 shares
authorized (actual and as adjusted), 14,171,337
outstanding (actual), 16,671,337 outstanding (as
adjusted).............................................. 14.3 16.8
Class B common stock, $1.00 par value: 1,500,000 shares
authorized (actual and as adjusted), 1,050,012 shares
outstanding (actual and as adjusted)................... 1.1 1.1
Additional paid-in capital................................ 72.1 115.7
Retained earnings......................................... 213.1 213.1
Accumulated other comprehensive earnings.................. 4.0 4.0
Treasury stock, 116,900 shares of common stock, at cost... (1.5) (1.5)
------ ------
Total stockholders' equity........................ 303.1 349.2
------ ------
Total capitalization.............................. 351.0 374.9
====== ======
Ratio of debt to total capitalization (as a %)............ 11.6 5.0
Book value per share (in $)............................... 19.91 19.71

S-11
12

PRICE RANGE OF COMMON STOCK

Our common stock is listed on the New York Stock Exchange under the symbol
"STC." The following table sets forth the high and low sales prices of our
common stock as reported on the New York Stock Exchange for each fiscal period
shown. We have restated these prices to reflect a two-for-one stock split in May
1999 that we effected through a stock dividend.

COMMON STOCK
---------------
HIGH LOW
------ ------

1999
First quarter............................................. $31.38 $15.25
Second quarter............................................ 21.94 15.50
Third quarter............................................. 23.00 15.50
Fourth quarter............................................ 18.25 10.25
2000
First quarter............................................. $15.88 $12.25
Second quarter............................................ 16.00 12.44
Third quarter............................................. 15.50 12.50
Fourth quarter............................................ 22.31 13.25
2001
First quarter............................................. $22.25 $16.80
Second quarter............................................ 19.71 16.20
Third quarter (through July 24, 2001)..................... 20.64 19.25

On July 24, 2001, the last reported sale price of our common stock as
reported on the New York Stock Exchange was $19.67 per share. As of July 23,
2001, there were 2,719 holders of record of our common stock.

S-12
13

SELECTED FINANCIAL DATA

PER SHARE DATA(1):
Average shares -- diluted (in
millions)............................. 15.3 14.8 15.0 14.6 14.2 13.8 13.5
Net earnings (losses)-basic............. .20 (.23) .04 1.96 3.37 1.12 1.08
Net earnings (losses)-diluted........... .20 (.23) .04 1.95 3.32 1.11 1.07
Net earnings (losses)-diluted, before
goodwill amortization................. .24 (.20) .16 2.06 3.40 1.18 1.14
Stockholders' equity.................... 19.91 19.17 19.61 19.39 18.43 15.17 14.17

- ---------------

(1) Restated for a two-for-one stock split in May 1999 effected as a stock
dividend.

S-13
14

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion is intended to provide information to facilitate
the understanding and assessment of significant changes and trends related to
our financial condition and results of operations. This discussion and analysis
should be read together with our consolidated financial statements and the notes
thereto, which are incorporated by reference into the prospectus accompanying
this prospectus supplement.

Our primary business is title insurance. We issue policies on homes and
other real property located in all 50 states, the District of Columbia and
several foreign countries through more than 5,600 issuing locations. We also
sell electronically delivered real estate services and information, as well as
mapping products and geographic information systems, to domestic and foreign
governments and private entities.

Our business has two main segments: title and real estate information, or
REI. These segments are closely related due to the nature of their operations
and common customers. The segments provide services throughout the United States
through a network of offices, including both direct operations and agents.
Although we conduct operations in several international markets, at current
levels they are generally immaterial with respect to our consolidated financial
results.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2001 Compared to Three Months Ended March 31,
2000

General. Generally, the principal factors that contribute to increases in
our operating revenues for our title and REI segments include:

- declining mortgage interest rates, which usually increase home sales and
refinancing transactions;

- rising home prices;

- higher premium rates;

- increased market share;

- additional revenues from our new offices and

- increased revenues from our commercial transactions.

Our large commercial transactions, although relatively few in number, typically
yield higher premiums.

According to published industry data, interest rates for 30-year fixed
mortgages, excluding points, for the three months ended March 31, 2001 averaged
7.0% as compared to 8.3% for the same period in 2000.

Because of a favorable mortgage interest rate environment, real estate
activity in the first three months of 2001 was very strong. Refinancing
transactions increased significantly. The ratio of refinancings to total loan
applications was 56.9% for the first quarter of 2001 compared to 18.7% for the
first quarter of 2000. Existing home sales increased 9.9% in the first quarter
of 2001 over the same period in 2000.

Title revenues. Our revenues from premiums, fees and other revenues
increased 16.9% in the first three months of 2001 over the same period in 2000.

Revenues from direct business increased 27.5% to $100.2 million. The number
of direct closings we handled increased 32.9% in the first three months of 2001.
Direct closings relate only to files that our underwriters and subsidiaries
close and do not include closings by agents. The average revenue per closing
decreased 4.4% in the first three months of 2001 compared to the same period in
2000 because of the significant increase during that period in the number of
refinancings with their lower premiums. There were no major revenue rate changes
in the first three months of 2001 or 2000.

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Premiums from independent agents increased 9.5% to $123.7 million for the
three months ended March 31, 2001 compared to the same period in 2000. The
increase resulted primarily from increased refinancings and regular transactions
handled by agents nationwide. The largest increases were in California, Florida
and Texas.

REI revenues. Real estate information revenues were $14.5 million for the
three months ended March 31, 2001 and $12.2 million for the three months ended
March 31, 2000. The increase resulted primarily from providing an increased
number of post-closing services, Section 1031 tax-deferred exchanges and
electronic mortgage documents resulting from the increase in real estate
transactions.

Investments. Investment income increased 16.4% in the first quarter of
2001 compared to the first quarter of 2000 primarily because of increases in
yields. Investment gains during this period were realized as part of the ongoing
management of the investment portfolio for the purpose of improving performance.

Agent retention. The amounts retained by agents, as a percentage of
premiums from agents, were 81.7% and 80.4% in the first quarters of 2001 and
2000, respectively. Amounts retained by title agents are based on contracts
between agents and our title insurance underwriters. The percentage that amounts
retained by agents bear to agent revenues may vary from year to year because of
the geographical mix of agent operations and the volume of title revenues.

Employee costs. Employee costs for the combined business segments
increased 15.5% for the three months ended March 31, 2001 compared to the same
period in 2000. The number of persons we employed at March 31, 2001 and March
31, 2000 was 5,873 and 5,614, respectively. The increase was primarily the
result of acquisitions of new offices.

In the REI segment, employee costs increased in the first quarter of 2001
over 2000 primarily due to a continuing shift in focus to providing more
post-closing services to lenders. These services are significantly more labor
intensive.

Other operating expenses. Other operating expenses for the combined
business segments increased 7.9% in the first quarter of 2001. The increase in
other operating expenses for the combined business segments during this period
resulted from new offices, computer costs, rent and search fees. These costs
were offset partially by reductions in bad debts and products purchased for
resale.

Other operating expenses also include title plant expenses, travel,
delivery costs, premium taxes, business promotion, REI expenses, telephone,
supplies and policy forms. Most of these expenses follow, to varying degrees,
the changes in transaction volume and revenues.

Our labor and certain other operating costs are sensitive to inflation. To
the extent inflation causes increases in the prices of homes and other real
estate, premium revenues also increase. Premiums are determined in part by the
insured values of the transactions we handle.

Title losses. For the three months ended March 31, provisions for title
losses, as a percentage of title premiums, fees and other revenues, were 4.3% in
2001 and 4.5% in 2000. The continued improvement in industry trends in claims
and increases in refinancing transactions, which result in lower loss exposure,
have led to lower loss ratios in recent years.

Income taxes. The provision for federal and state income taxes represented
effective tax rates of 38.6% and 37.3% in the first quarters of 2001 and 2000,
respectively.

Comparison of Years Ended December 31, 2000, 1999 and 1998

According to published industry data, interest rates for 30-year fixed
mortgages, excluding points, for the year 2000 averaged 8.1% as compared to 7.4%
in 1999. Rates averaged 6.9% in 1998.

The rates in 1998 were steady at slightly above or below 7% throughout the
year. In 1999, rates stayed at about that same level until June when they began
moving upward. At year-end 1999, rates were 8.1%. In 2000, the upward trend
continued, and rates reached a peak of 8.5% in May. Then, rates declined for
seven consecutive months. At year-end 2000, rates were 7.1%.
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Because of a favorable mortgage interest rate environment and a generally
strong economy, real estate activity in 1998 was very strong. In 1999, existing
home sales remained strong, increasing about 4.6% from 1998. However,
refinancing transactions dropped significantly during the second half of 1999.
In 2000, existing home sales declined about 3.7% from 1999. Refinancing
transactions also continued to decline in 2000. The annual average for
refinancing to total loan applications was 51.3% in 1998, 31.3% in 1999 and
19.6% in 2000. At the end of 2000, however, the average had increased to about
40%.

Title revenues. Our revenues from premiums, fees and other revenues
decreased 13.2% in 2000 over 1999, while increasing 10.2% in 1999 over 1998.

The number of direct closings we handled decreased 7.4% in 2000 from 1999
and 10.1% in 1999 from 1998. The average revenue per closing increased 8.8% in
2000 from 1999 and 14.7% in 1999 from 1998 because of higher home prices,
increased commercial transactions and a significant drop in 1999 in the number
of refinancings with their lower premiums. A 3.0% reduction in Texas title
premium rates became effective August 1, 1998. There were no other major revenue
rate changes in 2000, 1999 or 1998.

Premiums from agents decreased 20.6% to $494.6 million in 2000 from 1999
and increased 14.4% to $623.3 million in 1999 from $545.1 in 1998. The decrease
in 2000 resulted primarily from declining refinancings and regular transactions
handled by agents nationwide. While premiums in nearly all states declined in
2000, the largest decreases were in California, Florida and Oregon. The increase
in 1999 was primarily attributable to the same factors affecting direct
operations mentioned above, along with the inherent delay in agents reporting
policies on 1998 transactions. At the end of 1998, refinancing transactions were
unusually high.

Other revenues in 2000 included $1.6 million in losses in an equity
investee startup operation. In 1999 other revenues included a $1.3 million
pretax gain resulting from a settlement of a lawsuit and a related sale of an
equity ownership in a title agency.

Title revenues by state. The approximate amounts and percentages of
consolidated title revenues for the last three years were:

REVENUES ($ MILLIONS) PERCENTAGES
--------------------- ------------------
2000 1999 1998 2000 1999 1998
----- ----- ----- ---- ---- ----

Texas....................................... 176 167 162 20 17 18
California.................................. 111 158 156 13 16 17
New York.................................... 67 73 67 8 7 7
Florida..................................... 59 72 67 7 7 8
All others.................................. 448 522 448 52 53 50
--- --- --- --- --- ---
861 992 900 100 100 100
=== === === === === ===

REI revenues. Real estate information revenues were $52.5 million in 2000,
$59.0 million in 1999 and $50.4 million in 1998. The decrease in 2000 resulted
primarily from decreased real estate transactions and fewer ongoing mapping and
title plant projects. The increase in 1999 was primarily due to a significant
number of new businesses started and additional income earned from existing
operations. The increases in 1999 were partially offset by a decrease in
business volume due to increases in mortgage interest rates.

Investments. Investment income increased 7.5% in 2000 and 9.6% in 1999
primarily because of yield increases. Investment gains in 2000, 1999 and 1998
were realized as part of the ongoing management of the investment portfolio for
the purpose of improving performance.

Agent retention. The amounts retained by agents, as a percentage of
premiums from agents, were 81.2%, 80.9% and 80.4% in the years 2000, 1999 and
1998, respectively. Amounts retained by title agents are based on contracts
between agents and our title underwriters. The percentage that amounts retained
by agents bear to agent revenues may vary from year to year because of the
geographical mix of agent operations and the volume of title revenues.

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Selected cost ratios (by segment). The following table shows employee
costs and other operating expenses as a percentage of related title and real
estate information operating revenues for the last three years.

EMPLOYEE COSTS (%) OTHER EXPENSES (%)
------------------ ------------------
2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----

Title.............................................. 29.7 25.1 24.6 18.4 15.4 14.4
REI................................................ 68.8 57.5 58.7 28.4 26.9 26.3

These two categories of expenses are discussed below.

Employee costs. Employee costs for the combined business segments
increased 3.3% in 2000 from 1999 and 12.8% in 1999 from 1998. The number of
persons we employed at December 31, 2000, 1999 and 1998 was 5,627, 5,751 and
5,638, respectively. The decrease in 2000 was primarily the result of reductions
in existing operations in response to decreased volumes. These reductions were
offset by acquisitions and expansion in national marketing and technology
operations. In 1999 the increase was primarily the result of acquisitions,
increased REI volume and the expansion of our technology and national marketing
operations.

In the REI segment, employee costs (and cost ratios) increased in 2000
primarily due to a shift in focus to provide more post-closing services to
lenders. These services are considerably more labor intensive. Certain REI
startup operations also increased expenses.

Other operating expenses. Other operating expenses for the combined
business segments increased 2.4% in 2000 from 1999 and 18.3% in 1999 from 1998.
The overall increase in other operating expenses for the combined business
segments in 2000 was from new offices, rent, search fees and provisions for
regulatory actions brought against us. These expenses were offset partially by
reductions in premium taxes and certain REI expenses in response to volume
decreases. In 1999 the increase was caused primarily by a higher volume of
services and products purchased for resale, rent, the expense of new offices,
business promotion and other REI expenses. We also incurred a $1.3 million
charge in 1999 resulting from a lawsuit settlement in an REI operation.

Other operating expenses also include title plant expenses, travel,
delivery costs, telephone, supplies and policy forms. Most of these expenses
follow, to varying degrees, the changes in transaction volume and revenues.

Title losses. Provisions for title losses, as a percentage of title
premiums, fees and other revenues, were 4.5%, 4.5% and 4.4% in 2000, 1999 and
1998, respectively. The continued improvement in industry trends in claims and
increases in refinancing transactions, which result in lower loss exposure, has
led to lower loss ratios in recent years.

Income taxes. The provision for federal and state income taxes represented
effective tax rates of 47.1%, 39.0% and 38.4% in 2000, 1999 and 1998,
respectively. The 2000 effective rate was higher primarily due to state income
taxes that were proportionately higher in relation to taxable income.

LIQUIDITY AND CAPITAL RESOURCES

During the first three months of 2001, we financed a portion of the
purchase price of one acquisition through the issuance of $2.5 million of our
common stock. Acquisitions during the first three months of 2001 resulted in
additions to our goodwill of $11.0 million.

We filed a registration statement, of which this prospectus supplement and
the accompanying prospectus form a part, with the SEC to sell from time to time
up to $75 million of common stock. The registration statement was filed on March
30, 2001 and became effective on June 26, 2001.

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Cash provided by operations was $31.9 million, $57.9 million and $86.5
million in 2000, 1999 and 1998, respectively. Internally generated cash flow has
been the primary source of financing for additions to property and equipment,
expanding operations and other requirements. This source may be supplemented by
bank borrowings.

A substantial majority of consolidated cash and investments is held by
Stewart Title Guaranty Company and its subsidiaries. Cash transfers among
Stewart Title Guaranty Company and its subsidiaries and us are subject to
certain legal restrictions. See Notes 3 and 4 to our consolidated financial
statements incorporated by reference into the prospectus accompanying this
prospectus supplement.

Our liquidity, excluding Stewart Title Guaranty Company and its
subsidiaries, comprised cash and investments aggregating $3.9 million and
short-term liabilities of $0.9 million at March 31, 2001. We know of no
commitments or uncertainties that are likely to materially affect our ability,
or our subsidiaries' ability, to fund cash needs.

We consider our capital resources, represented primarily by notes payable
of $40.8 million and stockholders' equity of $303.1 million at March 31, 2001,
to be adequate.

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BUSINESS

TITLE

Our title segment provides services in connection with searching,
examining, closing and insuring the condition of the title to real property.

Examination and Closing

The purpose of a title examination is to ascertain the ownership of the
property being transferred, the debts owed on it and to determine what the title
policy coverage will be. This involves searching for and examining documents
such as deeds, mortgages, wills, divorce decrees, court judgments, liens, paving
assessments and tax records.

At the closing or "settlement," the seller of the property executes a deed
to the new owner. The buyer typically signs new mortgage documents. Closing
funds are then disbursed to the seller, the prior mortgage company, real estate
brokers, the title company and others. The documents then are recorded in the
public records. A title policy is generally issued to both the lender and new
owner.

Title Policies

Lenders in the United States generally require title insurance as a
condition to making a loan on real estate, including securitized lending.
Securing title insurance assures lenders of the priority of their lien position.
The purchasers of the property want the assurance given in their policy against
claims that may arise against their ownership. The face amount of the policy is
normally the purchase price of the property or the amount of the related loan.

Title insurance is substantially different from other types of insurance.
Fire, auto, health and life insurance protect against losses and events in the
future. In contrast, title insurance seeks to eliminate most risks through the
examination and settlement process.

Investments

We have established policies and procedures to manage our exposure to
changes in the fair value of our investments. These policies include an emphasis
on credit quality, management of portfolio duration, maintaining or increasing
investment income through high coupon rates and actively managing profile and
security mix depending on market conditions. We classify all of our investments
as available-for-sale.

Losses

Losses on policies are caused by title defects not discovered during the
examination and settlement process. Other reasons for losses include forgeries,
misrepresentations, unrecorded construction liens, the failure to pay off
existing liens, mishandling of settlement funds, issuance by agents of
unauthorized coverages and other legal issues.

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Some claimants seek damages in excess of policy limits. Those claims are
based on various legal theories usually alleging misrepresentation by an issuing
office. Although we vigorously defend against spurious claims, we have from time
to time incurred a loss in excess of policy limits.

Experience shows that most claims against policies and claim payments are
made in the first six years after the policy has been issued, although claims
may be made many years later. By their nature, claims are often complex, vary
greatly in dollar amounts and are affected by economic and market conditions and
the legal environment existing at the time of settlement of the claims.
Estimating future title loss payments is difficult because of the complex nature
of title claims, the long periods of time over which claims are paid,
significantly varying dollar amounts of individual claims and other factors.

Our liability for estimated title losses extends to both known claims and
other losses expected to be reported in the future. The amount of the reserve
represents the aggregate future payments, net of recoveries, that we expect to
incur on policy losses and in costs to settle claims. Provisions are charged to
income in the same year the related premium revenues are recognized. The amounts
provided are based on reported claims, historical loss experience, title
industry averages, current legal environment and types of policies written.

We continually review our estimated liability for future loss payments for
reasonableness and make appropriate adjustments as needed. Independent actuaries
also review the adequacy of the liability amounts on an annual basis. In
accordance with industry practice, the amounts have not been discounted to their
present values.

Factors Affecting Revenues

Title revenues are closely related to the level of activity in the real
estate market and the prices at which real estate sales are made. Real estate
sales are directly affected by the availability and cost of money to finance
purchases. Other factors include demand by buyers, consumer confidence and
family incomes. These factors may override the seasonal nature of the title
business. Based on historical real estate buying patterns, generally, the third
quarter is the most active in terms of real estate sales and the first quarter
is the least active.

Selected information for the national real estate industry for the last
three years follows:

2000 1999 1998
----- ----- -----

Housing starts -- millions.................................. 1.57 1.64 1.62
Housing resales -- millions................................. 5.11 5.21 4.97
Housing resales -- median sales price in thousands of
dollars................................................... 139.0 133.3 128.4

In addition, when interest rates decline, the number of refinancing
transactions and associated revenues generally increase.

Customers

Attorneys, builders, developers, lenders and real estate brokers are the
primary sources of title business. No single customer was responsible for as
much as ten percent of our title revenues in any of the last three years. We
insured titles for residential and commercial properties, undeveloped acreage,
farms and ranches.

Our customer acceptance is affected by service, location, financial
strength, size and other related factors. Increasing market share is
accomplished primarily by providing superior service. The parties to a closing
are concerned with personal schedules and the interest and other costs
associated with any delays in the settlement. Different states regulate, to
varying degrees, the rates charged to customers.

Financial strength and stability of the title underwriter are important
factors in maintaining and increasing our agency network. Out of the nation's
top four title insurers, we earned the highest financial

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stability ratings awarded by the title industry's leading rating companies. We
received an A" from Demotech, Inc., an A+ from Fitch, an A+ from Lace Title
Rating Corporation and an A2 from Moody's.

Market Share

Corporate Development Services, Inc. annually compiles title insurance
statistics. Based on unconsolidated statutory net title insurance premiums
written for 2000, Stewart Title Guaranty Company is one of the leading
individual title insurers in the United States.

Our principal competitors include Fidelity National Financial, Inc., The
First American Corporation and LandAmerica Financial Group, Inc. Like most title
insurers, we also compete with abstractors, attorneys who issue title opinions
and attorney-owned title insurance bar funds. A number of home builders,
financial institutions, real estate brokers and others own or control title
insurance agents, some of which issue policies underwritten by Stewart Title
Guaranty Company. "Controlled" business also may provide competition for our
agents.

Offices

At March 31, 2001, we had 5,494 locations issuing policies, compared to
5,354, 4,789 and 4,249 at December 31, 2000, 1999 and 1998, respectively. Of
these totals, 5,063, 4,952, 4,425 and 3,933 were independent agents at March 31,
2001 and December 31, 2000, 1999 and 1998, respectively.

Regulations

Title insurance companies are subject to extensive state regulations
covering rates, agent licensing, policy forms, trade practices, reserve
requirements, investments and the flow of funds between an insurer and its
parent or its subsidiaries and any similar related party transaction. Kickbacks
and similar practices are prohibited by certain state and federal laws.

REAL ESTATE INFORMATION

The real estate information segment primarily provides electronic delivery
of services related to real estate transactions. These services include title
reports, flood determinations, property appraisals, mortgage documents, credit
reports and tax services. This segment also provides post-closing services to
lenders, including document retrievals, assignments, lien releases, recordation,
collateral reviews and loan pool certifications. In addition, this segment
provides services related to Section 1031 tax-deferred exchanges, mapping, and
construction and maintenance of title plants for county clerks, tax assessors
and title agencies. REI revenues are closely related to the level of activity in
the real estate market.

Customers

Lenders are the primary source of REI business. Other customers include
title offices, real estate brokers, attorneys, municipalities and courthouses.
The most important factor affecting customer acceptance and market share growth
is superior customer service. Similar to the title operations, the real estate
information being provided by the companies in this segment is a part of the
closing process, driven by personal schedules and the interest and other costs
associated with any delays in the settlement.

GENERAL

Technology

Our automation products and services increase productivity in the title
office and expedite the real estate closing process for lenders, real estate
professionals and consumers. In the past, an order typically required several
individuals to search the title, retrieve and review documents and create the
commitment documentation. Today, on a normal subdivision file, one person can
receive the order electronically and, on the same screen, view the prior file,
examine the index of documents, retrieve and review electronically stored
documents, prepare the commitment and deliver the product.

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Trademarks

We have developed numerous automation products and processes that are
crucial to both our title and REI segments. These systems automate most facets
of a real estate transaction. Among these trademarked products and processes are
AIM(R), Landata Title Plant(R), LANDSCAN(R), REI Mall(R), RE-Source(R), Single-
Seat(TM) Technology, StarNet(R), SureClose(R) and Virtual Underwriter(R).

Employees

As of March 31, 2001, we and our subsidiaries employed 5,873 people. We
consider our relationship with our employees to be good.

PROPERTIES

We lease offices at over 400 locations. The average term for these leases
is approximately four years. The leases expire from 2001 to 2009. We believe we
will not have any difficulty obtaining renewals of leases as they expire or,
alternatively, leasing comparable property. The aggregate annual rental expense
under all leases was approximately $32.7 million in 2000.

We consider all buildings and equipment that we own or lease to be well
maintained, adequately insured and generally sufficient for our purposes.
Substantially all of the real property we own is subject to mortgages.

LEGAL PROCEEDINGS

We are party to a number of lawsuits incurred in connection with our
business, most of which are of a routine nature involving disputed policy
claims. In many of these suits, the plaintiff seeks exemplary or treble damages
in excess of policy limits based on the alleged malfeasance of an issuing agent.
We do not expect that any of these proceedings will have a material adverse
effect on our consolidated financial condition.

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MANAGEMENT

The following table sets forth certain information about our directors and
executive officers as of July 24, 2001:

NAME AGE POSITION
- ---- --- --------

Malcolm S. Morris..................... 55 Co-Chief Executive Officer and
Chairman of the Board of Directors
Stewart Morris, Jr. .................. 52 Co-Chief Executive Officer, President
and Director
Max Crisp............................. 66 Vice President-Finance, Secretary,
Treasurer and Director
Lloyd Bentsen, III.................... 56 Director
Nita B. Hanks......................... 47 Director
Paul W. Hobby......................... 40 Director
Dr. E. Douglas Hodo................... 66 Director
Dr. W. Arthur Porter.................. 60 Director
Martin J. Whitman..................... 76 Director

Malcolm S. Morris has served as a director and as our Chairman of the Board
and Co-Chief Executive Officer since 2000. Mr. Morris served as our Senior
Executive Vice President-Assistant Chairman for more than five years prior to
that time. Mr. Morris has also served for more than the past five years as
President and Chief Executive Officer of Stewart Title Guaranty Company and
Chairman of the Board of Stewart Title Company.

Stewart Morris, Jr. has served as a director and as our President and
Co-Chief Executive Officer since 2000, and for more than five years prior to
that time as Senior Executive Vice President-Assistant President. Mr. Morris has
also served for more than the past five years as President and Chief Executive
Officer of Stewart Title Company and Chairman of the Board of Stewart Title
Guaranty Company.

Stewart Morris, Jr. and Malcolm S. Morris are cousins. Acting together,
they have the power to direct our management and policies. Accordingly, they may
be deemed to be "control persons" as such term is used in regulations adopted
under the Securities Exchange Act of 1934.

Max Crisp has served as Vice President-Finance, Treasurer and Secretary and
as our Chief Financial Officer for more than the past five years and has served
as a director since 1970. Mr. Crisp is also Secretary, Treasurer and Vice
President-Finance of Stewart Title Guaranty Company, as well as Stewart Title
Company.

Lloyd Bentsen, III served as an Advisory Director from 1992 until his
election to the Board of Directors in 1995. Mr. Bentsen is a general partner and
co-founder of Triad Ventures, a group of venture capital funds with over $50
million of capital that seeks to invest in Texas-based emerging growth
companies. Mr. Bentsen also serves as a director of Zonagen, Inc., a development
stage biopharmaceutical company. Prior to founding his venture capital firm in
1979, Mr. Bentsen spent ten years with Rotan Mosle, Inc., a regional investment
banking firm, as a member of the corporate finance department. Mr. Bentsen is a
graduate of Princeton University and holds an MBA from Stanford University.

Nita B. Hanks has served as a director since 1990 and has been a Senior
Vice President of Stewart Title Guaranty Company, our largest subsidiary, for
more than the past five years. Mrs. Hanks is our Director of Employee Services
and serves as a director to provide the perspective of our employees.

Paul W. Hobby, a director since 1989, has served since 1995 as Chairman of
Hobby Media Services, Inc., a holding company for media and related technology
investments. Mr. Hobby also serves as the Founding Chairman of Genesis Park GP
Company LLC. Mr. Hobby served as Chairman of Columbine JDS Systems, Inc. until
October 31, 1997. Mr. Hobby also served as Vice President of H & C

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Communications, Inc. until December 31, 1996. Mr. Hobby also serves as a
director of Aronex Pharmaceuticals, Coastal Bancorp and Propaganda Films, Inc.

Dr. E. Douglas Hodo has been a director since 1988 and currently serves as
Chairman of our Audit Committee. Dr. Hodo has served as President of Houston
Baptist University since 1987. Dr. Hodo also serves as a director of U.S. Global
Investors Funds and Chairman of its Audit Committee.

Dr. W. Arthur Porter, a director since 1993, has served as Dean of the
College of Engineering and University Vice President for Technology Development
of the University of Oklahoma since 1998. Dr. Porter is also the Secretary of
the Science and Technology Development for the State of Oklahoma. Prior to those
appointments, he served as President and Chief Executive Officer of Houston
Advanced Research Center, a nonprofit research consortium, for more than five
years. He also served as an Adjunct Professor of Electrical Engineering at Rice
University for more than five years prior to his appointment with the University
of Oklahoma. Dr. Porter is a director of Electro Scientific Industries, Inc.,
Portland, Oregon, and Bookham Technologies, Oxfordshire, England.

Martin J. Whitman, a director since 2000, has served as Chairman and Chief
Executive Officer of M. J. Whitman, Inc., and its predecessors (a
broker-dealer), since 1974; Chief Executive Officer and a director of Danielson
Holding Corporation since 1990 (and Chairman of the Board from 1990 to July
1999); Chairman, Chief Executive Officer and a director of Third Avenue Trust
and its predecessor and EQSF Advisers, Inc. (the advisor to Third Avenue Trust)
since 1990; and Chairman, Chief Executive and a Director of Third Avenue
Variable Series Trust since June 1999. Mr. Whitman also serves as a director of
Nabors Industries, Inc., and from March 1993 to February 1996, he served as a
director of Herman's Sporting Goods, Inc., which filed a voluntary petition
under Chapter 11 of the United States Bankruptcy Code in April 1996. Mr. Whitman
was an Adjunct Lecturer, Adjunct Professor and Distinguished Fellow in Finance
at Yale University School of Management from 1972 to 1984 and 1992 to 2000. Mr.
Whitman also serves as an Adjunct Professor at Columbia University. Mr. Whitman
is co-author of The Aggressive Conservative Investor and author of Value
Investing: A Balanced Approach.

ADVISORY DIRECTORS

In addition to the directors elected by our stockholders, we have five
advisory directors who are appointed by our Board of Directors. The advisory
directors receive notice of and regularly attend meetings of the Board of
Directors. They provide valuable insights and advice and participate fully in
all deliberations of our Board of Directors but are not included in quorum and
voting determinations.

Robert H. Dedman has been an advisory director since 1989. He is founder
and Chairman of the Board of ClubCorp, Inc. and is a member of the Board of
Trustees of Southern Methodist University (from which he holds a law degree) and
is Chairman of the Board of Crystal Cathedral Ministries Foundation. He is a
former director of Wal-Mart Stores, Inc. and held the position of Chair of both
the Texas Board of Control Purchasing & General Services Commission and the
Texas Department of Transportation. He has also been inducted into the Texas
Business Hall of Fame and has received the Horatio Alger Award.

C.M. Hudspeth has been an advisory director since 2000 and prior to that he
served as a director since 1970. He has been of counsel to the law firm of
DeLange, Hudspeth, McConnell & Tibbets, LLP for more than the last five years.
Mr. Hudspeth is a Trustee Emeritus of Rice University.

John P. LaWare has been an advisory director since 1995. He was a member of
the Board of Governors of the Federal Reserve System for seven years and has
served as a director of the Federal Reserve Bank of Boston. He formerly served
as the Chairman of the Center for Blood Research. He has also been Chairman of
the Board and a director of Shawmut National Corporation and The Association of
Bank Holding Companies. He has held the position of Chairman of Children's
Hospital in Boston, United Way of Massachusetts Bay and the Massachusetts
Bankers Association and served as Vice Chairman of Northeastern University and
Secura Group. Mr. LaWare was also a Trustee of Travelers Real Estate

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Investors Trust and Mount Holyoke College in addition to being a director of
Liberty Mutual Insurance Company.

Carloss Morris has been an advisory director since 1999. Prior to that date
he was a director and served as Chairman of the Board and Co-Chief Executive
Officer of Stewart Information Services Corporation for more than five years.
Mr. Morris currently serves as Chairman of the Executive Committee of Stewart
Title Guaranty Company. Mr. Morris also serves as a director and executive
committee member of the Billy Graham Evangelistic Association. He is a past
chairman of Baylor University College of Medicine; past chairman of Star of Hope
Mission and past member of the House of Delegates of American Bar Association.
He has been inducted into the Texas Business Hall of Fame.

Stewart Morris has been an advisory director since 1999. Prior to that date
he was a director and served as President and Co-Chief Executive Officer of
Stewart Information Services Corporation for more than five years. Mr. Morris
currently serves as Chairman of the Executive Committee of Stewart Title Company
and Chairman of Stewart Information International, Inc. Mr. Morris also serves
as a trustee of Houston Baptist University; a past director and president of the
Carriage Association of America and past advisory director of the National Trust
for Historic Preservation. He has been inducted into the Texas Business Hall of
Fame.

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SHARE OWNERSHIP OF MANAGEMENT AND CERTAIN STOCKHOLDERS

The following table sets forth information as of July 24, 2001 with respect
to persons known by us to be the beneficial owners of more than 5% of either
class of our voting shares:

SHARE AMOUNT AND
NAME AND ADDRESS OF NATURE OF BENEFICIAL
BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP PERCENT OF CLASS
- ------------------- -------------- -------------------- ----------------

Malcolm S. Morris.................. Class B common stock 525,006 50.0
1980 Post Oak Boulevard
Houston, Texas 77056
Stewart Morris, Jr. ............... Class B common stock 525,006 50.0
1980 Post Oak Boulevard
Houston, Texas 77056
EQSF Advisers, Inc. ............... common stock 2,111,900(1) 14.9
767 Third Avenue
New York, New York 10017
Artisan Partners Limited
Partnership...................... common stock 1,556,200(2) 11.0
1000 North Water Street, #1770
Milwaukee, Wisconsin 53202
David L. Babson & Company, Inc..... common stock 881,000(3) 6.2
One Memorial Drive
Cambridge, Massachusetts 02142
Private Capital Management,
Inc. ............................ common stock 874,793(4) 6.2
3003 Tamiami Trail N.
Naples, Florida 34109
Franklin Resources, Inc. .......... common stock 770,500(5) 5.4
777 Mariners Island Boulevard
San Mateo, California 94404
Dimensional Fund Advisors, Inc. ... common stock 769,400(6) 5.4
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401

- ---------------

(1) EQSF Advisers, Inc. reported sole voting and dispositive power with respect
to all of these shares in its report on Schedule 13G/A filed April 11, 2001.
Third Avenue Value Fund, an investment company registered under the
Investment Company Act of 1940, has the right to receive dividends from, and
the proceeds from the sale of, 1,951,400 of the shares reported by EQSF.
Third Avenue Value Portfolio of the WRL Series Fund, an investment company
registered under the Investment Company Act of 1940, has the right to
receive dividends from, and the proceeds from the sale of, 77,900 of the
shares reported by EQSF, Style Select Small-Cap Value Portfolio, an
investment company registered under the Investment Company Act of 1940, has
the right to receive dividends from, and the proceeds from the sale of,
40,100 of the shares reported by EQSF, and Third Avenue Value Portfolio of
the Third Avenue Variable Series Trust, an investment company registered
under the Investment Company Act of 1940, has the right to receive dividends
from, and the proceeds from the sale of, 42,500 of the shares reported by
EQSF.

(2) In its report on Schedule 13G filed on February 14, 2001, Artisan Partners
Limited Partnership, an investment adviser registered under the Investment
Advisers Act of 1940, reported with respect to these shares voting and
dispositive power shared with Artisan Investment Corporation, its general
partner, and Andrew A. Ziegler and Carlene Murphy Ziegler, the principal
stockholders of Artisan Investment Corporation. The shares were acquired on
behalf of discretionary clients of Artisan Partners Limited Partnership and
persons other than the partnership are entitled to receive all dividends
from, and the proceeds from the sale of, the shares. To the knowledge of
Artisan Partners

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Limited Partnership, and Mr. and Mrs. Ziegler, none of those persons has an
economic interest in more than 5% of the common stock.

(3) David L. Babson & Company, Inc., in its capacity as an investment advisor,
reported sole voting and dispositive power with respect to all of such
shares in its most recent report on Schedule 13G filed February 9, 2001.

(4) Private Capital Management, Inc. reported shared dispositive power and no
voting power with respect to such shares in its Schedule 13G/A filed
February 15, 2001.

(5) Direct and indirect investment advisory subsidiaries of Franklin Resources,
Inc. have sole voting and investment power with respect to all of such
shares. Information with respect to the ownership of this stockholder was
obtained from its report on Schedule 13G/A filed February 9, 2001. This
report was also filed on behalf of Charles B. Johnson, Rupert H. Johnson,
Jr. and Franklin Advisory Services, LLC, affiliates of Franklin Resources,
Inc.

(6) Dimensional Fund Advisors, Inc. reported sole voting and dispositive power
with respect to all of these shares in its report on Schedule 13G filed
February 2, 2001. Dimensional is an investment advisor registered under
Section 203 of the Investment Advisors Act of 1940 and furnishes advice to
four investment companies registered under the Investment Company Act of
1940. Dimensional also serves as investment manager to certain other
commingled group trusts and separate accounts. All securities reported in
this schedule are owned by these investment companies, trusts and accounts.
Dimensional disclaims beneficial ownership of such securities.

The holders of the Class B common stock have entered into an agreement
generally intended to maintain an equal ownership of shares of common stock and
Class B common stock by Carloss Morris and Malcolm S. Morris, collectively, and
by Stewart Morris and Stewart Morris, Jr., collectively, absent consent of the
other parties. From time to time, the parties have agreed to a deviation from
the equal ownership agreement with respect to the common stock. This agreement
also provides for rights of first refusal with respect to Class B common stock
among themselves in the event of the death, voluntary or involuntary disposition
of the shares of Class B common stock and upon certain other specified
conditions.

The following table sets forth information as of July 24, 2001, with
respect to each class of the voting shares beneficially owned by our executive
officers, directors and by all officers and directors as a group:

SHARE AMOUNT AND
NATURE OF BENEFICIAL
NAME TITLE OF CLASS OWNERSHIP(1) PERCENT OF CLASS
- ---- -------------- -------------------- ----------------

Malcolm S. Morris............. common stock 240,000(2) 1.7
Class B common stock 525,006 50.0
Stewart Morris, Jr. .......... common stock 150,000(3) 1.0
Class B common stock 525,006 50.0
Lloyd Bentsen, III............ common stock 6,406 *
Max Crisp..................... common stock 61,000(4) *
Nita B. Hanks................. common stock 2,566(5) *
Paul W. Hobby................. common stock 3,406 *
Dr. E. Douglas Hodo........... common stock 3,406 *
Dr. W. Arthur Porter.......... common stock 3,406 *
Martin J. Whitman............. common stock 2,520,139(6) 17.7
All officers and directors as
a group (9 persons)......... common stock 2,990,329 20.4
Class B common stock 1,050,012 100.0

- ---------------

* Less than 1%.

(1) Unless otherwise indicated, the beneficial owner has sole voting and
investment power.

(2) Consists of 240,000 shares subject to stock options.

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(3) Consists of 150,000 shares subject to stock options.

(4) Includes 58,000 shares subject to stock options.

(5) Includes 2,200 shares subject to stock options.

(6) The shares listed for Mr. Whitman consist of shares beneficially owned by
EQSF Advisers, Inc. and M.J. Whitman Advisers, Inc., both of which are
investment advisors having sole voting and investment powers with respect to
such shares. Mr. Whitman is the Chief Executive Officer and controlling
person of EQSF Advisers, Inc. and M.J. Whitman Advisers, Inc. Mr. Whitman
disclaims beneficial ownership of all these shares.

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UNDERWRITING

We intend to offer the shares through the underwriters. Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Ferris, Baker Watts,
Incorporated and Fox-Pitt, Kelton Inc. are acting as representatives of the
underwriters named below. Subject to the terms and conditions described in an
underwriting agreement between us and the underwriters, we have agreed to sell
to the underwriters, and the underwriters severally have agreed to purchase from
us, the number of shares listed opposite their names below.

NUMBER
UNDERWRITER OF SHARES
----------- ---------

Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................
Ferris, Baker Watts, Incorporated...........................
Fox-Pitt, Kelton Inc. ......................................
--------
Total.......................................... 2,500,000
========

The underwriters have agreed to purchase all of the shares sold under the
underwriting agreement if any of these shares are purchased. If an underwriter
defaults, the underwriting agreement provides that the purchase commitments of
the nondefaulting underwriters may be increased or the underwriting agreement
may be terminated.

We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments the
underwriters may be required to make in respect of those liabilities.

The underwriters are offering the shares, subject to prior sale, when, as
and if issued to and accepted by them, subject to approval of legal matters by
their counsel, including the validity of the shares, and other conditions
contained in the underwriting agreement, such as the receipt by the underwriters
of officer's certificates and legal opinions. The underwriters reserve the right
to withdraw, cancel or modify offers to the public and to reject orders in whole
or in part.

COMMISSIONS AND DISCOUNTS

The underwriters have advised us that they propose initially to offer the
shares to the public at the public offering price on the cover page of this
prospectus supplement and to dealers at that price less a concession not in
excess of $ per share. The underwriters may allow, and the dealers may
reallow, a discount not in excess of $ per share to other dealers. After the
initial public offering, the public offering price, concession and discount may
be changed.

The following table shows the public offering price, underwriting discount
and proceeds before expenses to Stewart. The information assumes either no
exercise or full exercise by the underwriters of their over-allotment option.

PER SHARE WITHOUT OPTION WITH OPTION
--------- -------------- -----------

Public offering price...................................
Underwriting discount...................................
Proceeds, before expenses, to Stewart...................

The expenses of the offering, not including the underwriting discount, are
estimated at $ and are payable by Stewart.

OVER-ALLOTMENT OPTION

We have granted an option to the underwriters to purchase up to 375,000
additional shares at the public offering price less the underwriting discount.
The underwriters may exercise this option for 30 days
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from the date of this prospectus supplement solely to cover any over-allotments.
If the underwriters exercise this option, each underwriter will be obligated,
subject to conditions contained in the underwriting agreement, to purchase a
number of additional shares proportionate to that underwriter's initial amount
reflected in the above table.

NO SALES OF SIMILAR SECURITIES

We, our executive officers, directors and advisory directors have agreed,
with exceptions, not to sell or transfer any common stock for 90 days after the
date of this prospectus supplement without first obtaining the written consent
of Merrill Lynch. Specifically, we and these other individuals have agreed not
to directly or indirectly

- offer, pledge, sell or contract to sell any common stock;

- sell any option or contract to purchase any common stock;

- purchase any option or contract to sell any common stock;

- grant any option, right or warrant for the sale of any common stock;

- lend or otherwise dispose of or transfer any common stock;

- request or demand that we file a registration statement related to the
common stock; or

- enter into any swap or other agreement that transfers, in whole or in
part, the economic consequence of ownership of any common stock whether
any such swap or transaction is to be settled by delivery of shares or
other securities, in cash or otherwise.

This lock-up provision applies to common stock and to securities
convertible into or exchangeable or exercisable for or repayable with common
stock. It also applies to common stock owned now or acquired later by the person
executing the agreement or for which the person executing the agreement later
acquires the power of disposition. The lock-up provision does not apply to the
shares held by EQSF Advisers, Inc. and M.J. Whitman Advisers, Inc., investment
advisory firms of which one of Stewart's directors, Martin J. Whitman, is Chief
Executive Officer.

PRICE STABILIZATION AND SHORT POSITIONS

Until the distribution of the shares is completed, SEC rules may limit the
underwriters from bidding for and purchasing our common stock. However, the
underwriters may engage in transactions that stabilize the price of the common
stock, such as bids or purchases to peg, fix or maintain that price.

If the underwriters create a short position in the common stock in
connection with the offering, i.e., if they sell more shares than are listed on
the cover of this prospectus supplement, the underwriters may reduce that short
position by purchasing shares in the open market. The underwriters may also
elect to reduce any short position by exercising all or part of the
over-allotment option described above. Purchases of the common stock to
stabilize its price or to reduce a short position may cause the price of the
common stock to be higher than it might be in the absence of such purchases.

Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
we nor any of the underwriters makes any representation that the underwriters
will engage in these transactions or that these transactions, once commenced,
will not be discontinued without notice.

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OTHER RELATIONSHIPS

Some of the underwriters and their affiliates have engaged in, and may in
the future engage in, investment banking and other commercial dealings in the
ordinary course of business with us. They have received customary fees and
commissions for these transactions.

LEGAL MATTERS

Certain legal matters with respect to the common stock will be passed on
for us by Fulbright & Jaworski L.L.P. Certain legal matters with respect to the
common stock will be passed upon for the underwriters by Vinson & Elkins L.L.P.

EXPERTS

The consolidated financial statements and schedules of Stewart Information
Services Corporation and subsidiaries as of December 31, 2000 and 1999, and for
each of the years in the three-year period ended December 31, 2000, incorporated
in the prospectus accompanying this prospectus supplement, have been so
incorporated in reliance upon the report of KPMG LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.

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PROSPECTUS

STEWART INFORMATION SERVICES CORPORATION

$75,000,000

COMMON STOCK

---------------------

We may offer from time to time shares of our common stock in amounts, at
prices and on terms to be determined in light of market conditions at the time
of sale and set forth in a prospectus supplement.

The common stock is listed on the New York Stock Exchange under the symbol
"STC." On May 29, 2001, the last reported sale price of common stock on the New
York Stock Exchange was $17.00 per share.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE COMMON STOCK OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

---------------------

The date of this prospectus is June 26, 2001.
33

BUSINESS

Our principal business is title insurance. We issue, through our more than
5,300 issuing locations, title insurance policies on homes and other real
property located in all 50 states, the District of Columbia and several foreign
countries. We also sell electronically-delivered real estate services and
information, as well as mapping products and geographic information systems, to
domestic and foreign governments and private entities.

We have two business segments:

- title services, which include searching, examining, closing and insuring
the condition of title to real property; and

- real estate information services, which include (1) electronic delivery
of title reports, flood determinations, property appraisals, document
preparation, credit reports and other real estate information; (2)
post-closing services to lenders, such as document retrieval,
assignments, lien releases, recordation, collateral review and loan pool
certification; (3) services relating to tax-deferred exchanges, surveys,
accounting and operating systems of title agents and government
authorities and (4) construction and maintenance of title plants for
governmental authorities and title agencies.

These two business segments complement one another due to the nature of their
operations and common customer base. We offer our services in both of these
areas through a network of offices which include locations owned by us together
with those owned by agents.

CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS

This prospectus and the documents incorporated by reference contain
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. All statements other than statements of
historical fact, including, among others, statements regarding our future
financial position, business strategy, budgets, projected costs and plans and
objectives of management for future operations, are forward-looking statements.

We typically use words such as "expect," "anticipate," "estimate,"
"strategy," "intend," "plan," "forecast," "continue," "may," "will," and
"believe" or the negative of those terms or other variations of them or by
comparable terminology to identify our forward-looking statements. In
particular, statements, express or implied, concerning future operating results
or the ability to increase or to generate income or cash flows are
forward-looking statements.

Forward-looking statements are not guarantees of performance. Although we
believe our expectations reflected in forward-looking statements are based on
reasonable assumptions, no assurance can be given that these expectations will
be achieved. Important factors that could cause actual results to differ
materially from the expectations reflected in the forward-looking statements
include, among others:

- changes in mortgage interest rates;

- real estate activity levels and changes in this market;

- inability to adjust employee compensation relative to slowdowns in
industry;

- actions of competitors;

- general economic conditions and

- legislation, primarily related to title insurance.

When considering forward-looking statements, you should keep these factors
in mind. In light of these risks, uncertainties and assumptions, the events
anticipated by our forward-looking statements might not
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occur. Except as required by law, we undertake no obligation to update or revise
our forward-looking statements, whether as a result of new information, future
events or otherwise.

USE OF PROCEEDS

We intend to apply any net proceeds that we receive from the sale of the
common stock to our general funds to be used for acquisitions, including
repayment of debt incurred for acquisitions, and for general corporate purposes.
Any specific allocations of the proceeds to a particular purpose that has been
made at the date of any prospectus supplement will be described therein.

DESCRIPTION OF COMMON STOCK

GENERAL

We have two classes of capital stock authorized:

- 30,000,000 shares of common stock, $1.00 par value, of which 14,001,637
shares were issued and outstanding at February 28, 2001 and

- 1,500,000 shares of Class B common stock, $1.00 par value, of which
1,050,012 shares were issued and outstanding at February 28, 2001.

The shares of each class of stock outstanding are, and the shares of common
stock being offered pursuant to this prospectus when issued and paid for will
be, fully paid and nonassessable. Unless otherwise noted below, the rights,
qualifications and limitations of the common stock and the Class B common stock
are the same.

PREEMPTIVE RIGHTS

The holders of the common stock and Class B common stock do not have
preemptive or other rights to subscribe for additional shares of our capital
stock or any security convertible into such shares.

DIVIDEND RIGHTS AND RESTRICTIONS

The holders of the common stock and the Class B common stock are entitled
to share equally, share for share, in all dividends declared by our Board of
Directors, except that no cash dividends may be declared or paid on the Class B
common stock. Stock dividends, if any, must be paid on each class of stock
equally in shares of the particular class. Dividends in property other than cash
or stock of Stewart must be paid on each class of stock equally.

The amount of dividends payable to us by our wholly owned subsidiary,
Stewart Title Guaranty Company, which is the principal source from which we pay
dividends to our stockholders, is restricted under Texas insurance law.

LIQUIDATION RIGHTS

In the event of liquidation and dissolution of Stewart, the holders of the
common stock and the Class B common stock are entitled to share ratably in the
distribution of all assets of Stewart remaining after the payment of debts and
expenses.

VOTING RIGHTS

Each holder of common stock or Class B common stock is entitled to one vote
for each share of stock on all matters voted on by our stockholders, except that
as long as 600,000 or more shares of Class B common stock are issued and
outstanding, at each election of directors the common stock and the Class B
common stock are voted as separate classes. In the election of directors, the
holders of common stock have

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cumulative voting rights. The holders of the Class B common stock do not have
cumulative voting rights. On all other matters, the common stock and the Class B
common stock are voted as a single class.

So long as 1,050,000 or more shares of Class B common stock are
outstanding, the holders of the common stock are entitled to elect five of the
nine directors of Stewart and the holders of the Class B common stock are
entitled to elect the remaining four of the nine directors. In the event that
the number of issued and outstanding shares of Class B common stock is less than
1,050,000 but more than 600,000, the number of directors to be so elected by the
holders of the common stock will be six and the number to be elected by the
holders of the Class B common stock will be three. In the event that the number
of issued and outstanding shares of Class B common stock falls below 600,000,
the common stock and the Class B common stock will be voted as a single class on
all matters, including the election of directors, and the holders of each class
of stock will have cumulative voting rights.

Any change in our restated certificate of incorporation that affects the
common stock and the Class B common stock unequally requires the affirmative
vote of at least a majority of the outstanding shares of each class, voting as a
class.

CONVERSION AND RESTRICTIONS ON TRANSFER OF CLASS B COMMON STOCK

Each share of Class B common stock is convertible, at any time, into one
share of common stock. In the event of any transfer, upon death or otherwise, of
any share of Class B common stock to any person or entity other than a
"qualified holder," such share of Class B common stock shall automatically be
converted into a share of common stock. A qualified holder is defined in our
restated certificate of incorporation as (1) a lineal descendant of William H.
Stewart (a common ancestor of Malcolm Morris and Stewart Morris, Jr.), (2) a
spouse of any such descendant or (3) a personal representative, trustee or
custodian for the benefit of any such spouse or descendant. A partnership shall
be deemed to be a qualified holder if each of its partners is a qualified
holder; a corporation shall be deemed to be a qualified holder if each holder of
its capital stock is a qualified holder; and a trust shall be deemed to be a
qualified holder if each beneficiary is a qualified holder.

The holders of the Class B common stock have entered into an agreement
intended to maintain an equal ownership of shares of common stock and Class B
common stock by Carloss Morris and Malcolm Morris, collectively, and by Stewart
Morris and Stewart Morris, Jr. collectively. This agreement also provides for
rights of first refusal with respect to the Class B common stock among
themselves in the event of the death, voluntary or involuntary disposition of
the shares of Class B common stock and upon certain other specified conditions.
In addition, the agreement provides that the parties will not sell their Class B
common stock or convert their Class B common stock into common stock prior to
January 2005.

ANTI-TAKEOVER PROVISIONS

Certain provisions in our restated certificate of incorporation and by-laws
may make it less likely that our management would be changed or that someone
would acquire voting control of our company without the consent of our Board of
Directors. These provisions may delay, deter or prevent tender offers or
takeover attempts that stockholders may believe are in their best interests,
including tender offers or other takeover proposals that might allow
stockholders to receive premiums over the market price of their common stock.

Class B Common Stock

Pursuant to our by-laws, six of the nine members of the Board of Directors
constitute a quorum, and the vote of six directors is required to constitute an
act by the Board of Directors. Accordingly, the affirmative vote of at least one
of the directors elected by the holders of the Class B common stock is required
for any action to be taken by the Board of Directors. The foregoing provision of
our by-laws may not be amended or repealed without the affirmative vote of at
least a majority of the outstanding shares of each class of our capital stock,
voting as a separate class.

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The voting rights of the holders of the Class B common stock may have the
effect of rendering more difficult or discouraging unsolicited tender offers,
merger proposals, proxy contests or other takeover proposals to acquire control
of Stewart. To the extent that such voting rights have such effect, the
assumption of control by a holder of a large block of common stock and the
removal of incumbent management of Stewart may be more difficult. Furthermore,
such voting rights could make the accomplishment of a business combination
transaction involving Stewart more difficult even if such transaction were
favorable to the interests of a majority of our stockholders. Thus, the holders
of the Class B common stock may possess a veto power over such business
combination transactions regardless of whether such transactions might be
desired by or be beneficial to a majority of our stockholders and thereby assist
existing management in retaining their present positions with Stewart.

Advance Notice Requirements for Director Nominations

Our stockholders may nominate candidates for our Board of Directors;
however, a stockholder must follow the advance notice procedures described in
our by-laws. In general, a stockholder must submit a written notice of the
nomination to our Corporate Secretary at no later than the 15th day of February
next preceding the annual meeting of stockholders.

Directors' Ability to Amend By-laws

Our Board of Directors may adopt, amend or repeal our by-laws, subject to
limitations under Delaware law, except that an amendment to, or repeal of, the
provision of our by-laws described in the first paragraph of "-- Class B Common
Stock" requires the affirmative vote of at least a majority of the outstanding
shares of each class of our capital stock, voting as a separate class.

Additional Authorized Shares of Common Stock

Additional shares of authorized common stock available for issuance under
our restated certificate of incorporation could be issued at such times, under
such circumstances and with such terms and conditions as to impede a change in
control of Stewart.

Special Meeting of Stockholders

The by-laws provide that special meetings of stockholders may be called
only by our President or our Board of Directors. Such provisions, together with
the other anti-takeover provisions described in this section, also could have
the effect of discouraging a third party from initiating a proxy contest, making
a tender or exchange offer or otherwise attempting to obtain control of Stewart.

Delaware Anti-Takeover Law

Under Section 203 of the Delaware General Corporation Law, certain
"business combinations" between a Delaware corporation whose stock generally is
publicly traded or held of record by more than 2,000 stockholders and an
"interested stockholder" are prohibited for a three-year period following the
date that such stockholder became an interested stockholder, unless (1) the
corporation has elected in its certificate of incorporation or bylaws not to be
governed by the Delaware anti-takeover law (the Company has not made such an
election), (2) either the business combination or the transaction that resulted
in the stockholder becoming an interested stockholder was approved by the board
of directors of the corporation before the other party to the business
combination became an interested stockholder,(3) upon consummation of the
transaction that made it an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the
commencement of the transaction (excluding voting stock owned by directors who
are also officers or held in employee stock plans in which the employees do not
have a right to determine confidentially whether to tender or vote stock held by
the plan) or (4) the business combination was approved by the board of directors
of the corporation and ratified by 66 2/3% of the voting stock which the
interested stockholder did not own.

The three-year prohibition does not apply to certain business combinations
proposed by an interested stockholder following the announcement or notification
of certain extraordinary transactions involving the

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corporation and a person who had not been an interested stockholder during the
previous three years or who became an interested stockholder with the approval
of a majority of the corporation's directors.

The term "business combination" is defined generally to include mergers or
consolidations between a Delaware corporation and an interested stockholder,
transactions with an interested stockholder involving the assets or stock of the
corporations or its majority-owned subsidiaries and transactions which increase
an interested stockholder's percentage ownership of stock. The term "interested
stockholder" is defined generally as a stockholder who becomes the beneficial
owner of 15% or more of a Delaware corporation's voting stock. Section 203 could
have the effect of delaying, deferring or preventing a change in control of the
Company.

TRANSFER AGENT

The Transfer Agent and Registrar for the common stock is Mellon Investor
Services, and its address is 600 North Pearl Street, Suite 1010, Dallas, Texas
75201-2884.

LIMITATION ON DIRECTORS' LIABILITY

Delaware corporation law authorizes corporations to limit or eliminate the
personal liability of directors to corporations and their stockholders for
monetary damages for breach of directors' fiduciary duty of care. The duty of
care requires that, when acting on behalf of the corporation, directors must
exercise an informed business judgment based on all material information
reasonably available to them. Absent the limitations authorized by such laws,
directors are accountable to corporations and their stockholders for monetary
damages for conduct constituting gross negligence in the exercise of their duty
of care. The Delaware laws enable corporations to limit available relief to
equitable remedies such as injunction or recission.

Our restated certificate of incorporation limits the liabilities of our
directors to us or our stockholders, in their capacity as directors but not in
their capacity as officers, to the fullest extent permitted by Delaware law.
Specifically, our directors will not be personally liable for monetary damages
for breach of a director's fiduciary duty as a director, except for liability:

- for any breach of the director's duty of loyalty to us or our
stockholders;

- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

- for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law or

- for any transaction from which the director derived an improper personal
benefit.

This provision in our restated certificate of incorporation may have the
effect of reducing the likelihood of derivative litigation against directors,
and may discourage or deter stockholders or management from bringing a lawsuit
against directors for breach of their duty of care, even though such an action,
if successful, might otherwise have benefitted us and our stockholders.

PLAN OF DISTRIBUTION

We may sell the common stock offered by this prospectus:

- through underwriters, brokers, dealers or agents or

- directly to purchasers.

Any underwriters, dealers, brokers or agents may sell the common stock to
institutional purchasers in one or more transactions, including block
transactions, on the NYSE or otherwise. Any sales of the common stock may be
made at market prices prevailing at the time of sale, at prices related to
prevailing
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38

market prices or at negotiated prices. The prospectus supplement relating to the
securities will set forth the terms of the offering of such securities,
including the name or names of any underwriters or agents, the purchase price of
the securities and the proceeds to us from such sale, any delayed delivery
arrangements, any underwriting discounts and commissions and other items
constituting underwriters' compensation, any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.

If we use underwriters in the sale of any securities, the underwriters will
acquire such securities for their own account and may resell them from time to
time in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. In
connection with the sale of the common stock, underwriters, brokers, dealers or
agents may be deemed to have received compensation from us in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of the common stock for whom they may act as agent or to whom they
may sell as principal. Underwriters or agents may sell the common stock to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or commissions from
the purchasers for whom they may act as agent.

The common stock may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of common stock will be named in
the prospectus supplement relating to that offering and, if an underwriting
syndicate is used, the name or names of the managing underwriter or underwriters
will be set forth on the cover of such prospectus supplement. Unless otherwise
set forth in the prospectus supplement relating to such securities, the
obligations of the underwriters to purchase the common stock will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all the securities offered if any are purchased.

If dealers are used in the sale of common stock, we will sell such
securities to the dealers as principals. The dealers may then resell such
securities to the public at varying prices to be determined by such dealers at
the time of resale. The names of dealers or brokers acting as dealers and the
terms of the transaction will be set forth in the prospectus supplement relating
to such securities. We may sell the common stock directly or through agents
designated by us from time to time. Any agent involved in the offer or sale of
the securities in respect to which this prospectus is delivered will be named,
and any commissions that we pay to such agent will be set forth, in the
prospectus supplement relating to such securities. Unless otherwise indicated in
the prospectus supplement, any such agent will be acting on a best efforts basis
for the period of its appointment.

If so indicated in the prospectus supplement, we will authorize agents,
underwriters, brokers or dealers to solicit offers from certain types of
institutions to purchase common stock at the public offering price set forth in
the prospectus supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject only to those conditions set forth in the prospectus supplement, and the
prospectus supplement will set forth the commission payable for solicitation of
such contracts.

Agents, brokers, dealers and underwriters may be entitled under agreements
with us to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act of 1933, or to contribution with respect to
payments which such agents, brokers, dealers or underwriters may be required to
make in respect thereof. Agents, brokers, dealers and underwriters may be
customers of, engage in transactions with or perform services for us in the
ordinary course of business.

LEGAL MATTERS

The validity of the common stock offered by this prospectus will be passed
on for us by Fulbright & Jaworski L.L.P.

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EXPERTS

The consolidated financial statements and schedule included in our Annual
Report on Form 10-K for the year ended December 31, 2000, incorporated by
reference in this prospectus, have been audited by KPMG LLP, independent public
accountants, as indicated in their report with respect thereto and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing and giving said report.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our Securities Exchange Act of 1934 file number is
1-12688. Our SEC filings are available to the public over the Internet at the
SEC's web site at http://www.sec.gov. You may also read and copy any document we
file at the SEC's public reference rooms located at:

- 450 Fifth Street, N.W.
Washington, D.C. 20549;

- Seven World Trade Center
New York, New York 10048 and

- Northwest Atrium Center
500 West Madison Street
Chicago, Illinois 60661

Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms and their copy charges.

Our common stock has been listed and traded on the New York Stock Exchange
since January 1994. Accordingly, you may inspect the information we file with
the SEC at the New York Stock Exchange, 20 Broad Street, New York, New York
10005.

The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934
until we sell all of the common stock:

- the description of our common stock contained in our registration
statement on Form 8-A/A, filed with the SEC on May 30, 2001;

- our Annual Report on Form 10-K for the fiscal year ended December 31,
2000 and

- our Quarterly Report on Form 10-Q for the quarterly period ended March
31, 2001.

You may request a copy of these filings, excluding exhibits, at no cost by
writing or telephoning Ted C. Jones, Ph.D., Director of Investor Relations, at
our principal executive office, which is:

Stewart Information Services Corporation
1980 Post Oak Boulevard
Houston, Texas 77056
(713) 625-8100

In this prospectus, references to "Stewart," "we," "us" and "our" each
refer to Stewart Information Services Corporation and, unless otherwise stated,
our subsidiaries.

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YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION.

WE ARE NOT MAKING AN OFFER OF THE SECURITIES COVERED BY THIS PROSPECTUS OR
ANY APPLICABLE PROSPECTUS SUPPLEMENT WHERE THE OFFER IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS, IN ANY APPLICABLE
PROSPECTUS SUPPLEMENT OR IN ANY OTHER DOCUMENT INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR ANY APPLICABLE PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE
OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.

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2,500,000 SHARES

[STEWART LOGO]

COMMON STOCK

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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.

FERRIS, BAKER WATTS
Incorporated

FOX-PITT, KELTON

, 2001

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