Stewart Announces Second Quarter Results

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HOUSTON (July 25, 2000) - Stewart Information Services Corporation (NYSE-STC) today reported net earnings of  $1.9 million for the three months ended June 30, 2000, compared to $11.7 million for the same period in 1999.  On a diluted per share basis, earnings were $.13 for the second quarter of 2000, compared to $.80 for the second quarter of 1999.  Revenues for the three months ended June 30, 2000 decreased 24 percent to $225 million. 

 For the six months ended June 30, 2000, Stewart lost $1.5 million, or $.10 per diluted share, compared to net earnings of $21.3 million, or $1.47 per diluted share, for the same six-month period in 1999.  Revenues year-to-date decreased 20 percent to $433 million.

Residential interest rates were more than 100 basis points higher in the second quarter of 2000 when compared to the same period in 1999.  Residential loan applications were down 14 percent in the second quarter nationwide when compared to the same period last year.  Refinance activity, which represented 34 percent of all residential loan applications in the three months ended June 30, 1999, made up only 14 percent of applications in the same period in 2000.

"While the healthy economy continued to support strong home sales and construction activity, higher interest rates have significantly decreased refinance activity, resulting in a reduction in our revenues and earnings," said Malcolm S. Morris, chairman and co-chief executive officer.  Title insurance order counts in the second quarter of 2000, which were down 7 percent from the same period last year, were off only 1 percent in the month of June from a year ago.

 "Our revenues are down, but we continue to increase our investment in personnel and other costs in the commercial sector to expand future revenues in this growing part of our business.  While our total title revenues declined this year, commercial revenues increased.  LACE Financial has reaffirmed an A+ rating for our lead underwriter and assigned it the commercial capacity rating to issue the largest single policy in our industry.  We are pleased at this recognition of our strong balance sheet."

"Our industry-leading technology allowed us recently to participate in the historic first-ever paperless electronic closing," said Stewart Morris, Jr., president and co-chief executive officer.  "We continue to make progress with single seat processing techniques and the information services needed to close real estate transactions.  This includes collateral assessment, document preparation, flood hazard certificates, e-commerce, all combined with our enhanced and traditional title products.  Not only does this compress the time from order to delivery but also allows us to deliver extraordinary service, convenience and value to our customers."

 Stewart Information Services Corporation is a technology driven, strategically competitive, global real estate information company.  Stewart provides title insurance and related services through more than 5,100 issuing locations in the United States and several international markets. A leading provider of real estate information technology and connectivity, Stewart meets the needs of the real estate and mortgage industries through the electronic delivery of services needed for settlement. These services include title insurance, title reports, flood determinations, property appraisals, document preparation, credit reports and other real estate information.  In addition, Stewart provides expertise in tax-deferred exchanges, surveys and field services.  More information about Stewart can be found at www.stewart.com.

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SUMMARY OF OPERATION

Stewart Information Services Corporation

 

Three months
Ended June 30

 

2000

1999

Revenues

$224,670,000

$296,093,000

Net earnings

$1,874,000

$11,726,000

Average Shares - diluted

14,908,000

14,581,000

Earnings per share:

 

 

   Basic

$.13

$.81

   Diluted

$.13

$.80

 

 

Six months
Ended June 30

 

2000

1999

Revenues

$432,873,000

$543,971,000

Net earnings (loss)

$(1,480,000)

$21,326,000

Average Shares - diluted

14,860,000

14,461,000

Earnings (loss) per share:

 

 

   Basic

$(.10)

$1.49

   Diluted

$(.10)

$1.47

 

STEWART INFORMATION SERVICES CORPORATION
STATEMENTS OF EARNINGS
(In thousands of dollars)

 

Three months
ended June 30

Six months
ended June 30

 

2000

1999

2000

1999

Revenues

 

 

 

 

Title premiums, fees and other revenues

206,270

275,117

397,446

502,833

Real estate information services

13,028

16,225

25,227

31,316

Investment income

5,319

4,885

10,487

9,792

Investment gains (losses) - net

53

(134)

(287)

30

 

224,670

296,093

432,873

543,971

 

       

Expenses

       

Amounts retained by
agents

89,418

142,262

180,257

254,396

Employee costs

73,136

73,964

141,810

143,463

Other operating
expenses

42,487

43,116

81,548

79,577

Title losses

9,547

11,920

18,107

21,186

Depreciation and
amortization

5,135

4,318

10,226

8,193

Interest

486

310

867

596

Minority interests

1,501

1,436

2,445

2,426

 

221,710

 



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