Stewart Announces Record Results for Fourth Quarter and Year 2001

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HOUSTON (February 13, 2002) -- Stewart Information Services Corporation (NYSE-STC) today reported results for the fourth quarter and year ended 2001. For the fourth quarter of 2001, Stewart's revenues and net earnings were the highest of any quarter in the history of the company. Orders for the quarter were also an all-time high. For the year 2001, revenues and net earnings were also the highest of any year in the company's history.  

Stewart earned $17.2 million, or $.96 per diluted share, for the fourth quarter of 2001 compared to earnings of $0.3 million, or $.02 per diluted share, for the fourth quarter of 2000. Revenues increased 42 percent to $374.3 million.

Revenues for the year 2001 were $1,271.6 million, a 36 percent increase from 2000. Net earnings for the year 2001 were $48.7 million, or $2.98 per diluted share, as compared to earnings of $0.6 million, or $.04 per diluted share, for 2000.  

“Despite the disruption to the national economy caused by the tragedy of September 11, real estate continues to produce impressive sales and construction levels. We are very pleased with our earnings performance during 2001,” said Malcolm S. Morris, chairman of the board and co-chief executive officer. ``We intend to build on our performance, continuing to focus on profits and return on equity.

“Most important in today's world, our company has a sound balance sheet, conservative financial management and impressive national market share growth. Stewart's achievements and investment value were recognized by the financial community with our inclusion on Forbes Platinum 400 list of America's best performing big companies for 2002 -- in which we topped the entire insurance category with the best five-year compounded annual earnings per share growth rate.”

“Stewart came out of 2001 bigger, better and stronger, and our record profits and revenues reflect that. We enjoyed a record year in our REI segment,” said Stewart Morris Jr., president and co-chief executive officer. Our acquisition strategy over the past three years has been and for the foreseeable future will be to focus on strategically located title agencies in markets with high growth potential. Stewart's cutting edge technology supports our office network by increasing productivity and providing more and better services to customers, while reducing cost per file. It has set the pace for innovation in the title industry.

“The outlook for our core market in real estate sales and construction is positive for 2002. Although Fannie Mae is forecasting a 10 percent reduction in one-to-four family lending in 2002, that is based primarily on a reduction in refinance activity. While interest rate cycles will continue to fluctuate, we remain confident in our ability to manage costs and continue to grow market share regardless of interest rate levels.”

Stewart Information Services Corporation is a technology driven, strategically competitive, global real estate information company. Stewart provides title insurance and related information services through more than 5,800 issuing locations in the United States and several international markets. Stewart meets the needs of the real estate and mortgage industries through the delivery of information services required for settlement using e-commerce. These services include title reports, flood determinations, property appraisals, surveys, document preparation, property reports and background checks. Stewart also supplies post-closing services to lenders, automated county clerk land records and geographic information systems for governmental entities. Stewart provides expertise in tax-deferred exchanges. More information about Stewart can be found at www.stewart.com.

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SUMMARY OF OPERATIONS

 

Stewart Information Services Corporation

 

 

Three months

 

ended December 31

 

2001 2000

     

Revenues................

$374,296,000

$263,608,000

Net earnings............

$17,172,000

$328,000

Average shares - diluted..

17,959,000

15,176,000

Earnings per share:

   

Basic...................

$ 0.97

$ 0.02

Diluted.................

$ 0.96

$ 0.02

 

Year Ended

 

December 31

 

2001 2000

     

Revenues.................

$1,271,585,000

$935,485,000

Net earnings

$48,686,000

$606,000

Average shares - diluted.......

16,348,000

14,980,000

Earnings (loss) per share:

   

Basic...................

$ 3.01

$ 0.04

Diluted.................

$ 2.98

$ 0.04

 

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

 

Three months

Year ended

 

ended Dec 31

Dec 31

 

2001 2000

2001 2000

Revenues

Title premiums, fees and other revenues....

352,201

245,229

1,185,220

863,892

Real estate information services..............

17,145

13,217

65,852

52,463

Investment income................

5,129

4,859

19,922

19,107

Investment (losses) gains - net...........

(179)

303

591

23

 

374,296

263,608

1,271,585

935,485

         

Expenses

Amounts retained by agents................

160,463

120,990

539,369

401,761

Employee costs.................

100,841

75,068

365,562

292,276

Other operating expenses..............

59,772

48,025

202,342

173,038

Title losses..........

16,699

11,552

51,454

38,999

Depreciation..........

4,969

4,700

19,637

19,144

Goodwill..........

1,102

450

3,011

1,807

Interest..............

168

902

2,216

2,266

Minority interests.............

2,226

1,262

7,414

5,048

 

346,240

262,949

1,191,005

934,339

Earnings before taxes..............

28,056

659

80,580

1,146

Income taxes.................

10,884

331

31,894

540

Net earnings..................

17,172

328

48,686

606

Average number diluted shares (000)....

17,959

15,176

16,348

14,980

Earnings per share - diluted.......

.96

.02

2.98

.04

 

Segment information:

Title revenues..............

357,151

250,391

1,205,733

883,022

Title pretax earnings..............

27,859

1,199

75,184

5,591

REI revenues.............

17,145

13,217

65,852

52,463

REI pretax earnings (loss).............

197

(540)

5,396

(4,445)

Selected financial information (000):

Premiums earned from agents.............

200,191

146,741

661,943

494,614

Title loss payments net...............

13,248

6,205

39,721

32,338

Other comprehensive
(loss) income -
net of taxes

(1,516)

3,446

2,151

5,528

Average number of basic shares..........

17,791

15,049

16,195

14,874

Number of title orders opened...........

203.7

94.1

679.8

405.1

         
         

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

 

Dec 31

Dec 31

 

2001

2000

 

Assets

Cash and cash equivalents.............................

60,706

36,505

Short-term investments.............................

56,267

52,971

Investments - statutory reserve funds...................................

239,084

206,150

Investments - other..............................

86,046

52,242

Receivables.............................

52,036

57,039

Property and equipment..................

48,772

45,459

Title plants............................

37,715

32,491

Goodwill................................

52,971

36,693

Deferred income taxes...................

4,288

7,352

Other...................................

39,978

36,546

 

677,863

563,448

Liabilities

Notes payable.................................

13,794

32,543

Accounts payable and accrued liabilities.........

57,752

38,617

Estimated title losses..................................

202,544

190,298

Minority interests...............................

9,233

6,901

Contingent liabilities and commitments

Stockholders' equity

Common and Class B Common Stock and
additional paid-in capital.............

133,157

84,543

Retained earnings......................

258,746

210,060

Accumulated other comprehensive earnings...............................

4,149

1,998

Treasury stock...................................

(1,512)

(1,512)

Total stockholders' equity
($22.16 per share and $19.61 per share)............

394,540

295,089

 

677,863

563,448

February 13, 2002

 


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