STEWART INFORMATION SERVICES CORP

NOTE 3

Statutory surplus and dividend restrictions. A substantial portion of the consolidated retained earnings at each year end was related to Guaranty, which owns a majority of all the subsidiaries included in the consolidation. Guaranty cannot pay a dividend to its parent in excess of certain limits without the approval of the Texas Insurance Commissioner (TIC). Guaranty paid $173.0 million and $30.0 million of dividends to its parent company during 2025 and 2024, respectively. The maximum dividend that can be paid, on a rolling twelve-month period and subject to the timing of 2025 dividends paid, without the TIC's approval in 2026 is approximately $165.4 million, which is based on the greater of 2025 net operating income or 20% of statutory surplus as December 31, 2025.

Dividends from Guaranty are also voluntarily restricted primarily to maintain statutory surplus and liquidity at competitive levels and to demonstrate significant claims payment ability. The ability of a title insurer to pay claims can significantly affect the decision of lenders and other customers when buying a policy from a particular insurer. Surplus as regards policyholders (total statutory capital and surplus) for Guaranty was $827.0 million and $865.1 million at December 31, 2025 and 2024, respectively. Statutory net income for Guaranty was $151.0 million, $67.5 million and $65.1 million in 2025, 2024 and 2023, respectively.

The amount of statutory capital and surplus necessary to satisfy regulatory requirements for Guaranty was $2.0 million (and in the aggregate less than $2.0 million for all of the Company’s underwriter subsidiaries) at December 31, 2025, and each of its underwriter entities was in compliance with such requirements as of December 31, 2025.

NOTE 4

Investments in debt and equity securities. The total fair values of the Company's investments in debt and equity securities as of December 31 are detailed below:

As of December 31, 2025 and 2024, included in the above fair values of investments in equity securities were net unrealized investment gains of $14.8 million and $23.2 million, respectively.

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The amortized costs and fair values of investments in debt securities as of December 31, are as follows:

The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized. Foreign debt securities primarily include Canadian government and corporate bonds, with aggregate fair values of $296.8 million and $273.3 million as of December 31, 2025 and 2024, respectively, and United Kingdom treasury and corporate bonds with aggregate fair values of $41.4 million and $30.8 million as of December 31, 2025 and 2024, respectively.

Gross unrealized gains and losses on investments in debt securities at December 31, were:

Debt securities at December 31, 2025 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights):

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Gross unrealized losses on investments in debt securities and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2025, were:

The number of specific debt securities investment holdings in an unrealized loss position as of December 31, 2025 was 156. Of these securities,113 were in unrealized loss positions for more than 12 months. Gross unrealized investment losses at December 31, 2025 decreased compared to December 31, 2024, primarily influenced by lower interest rates during 2025. Since the Company does not intend to sell and will more likely than not maintain each investment security until its maturity or anticipated recovery, and no significant credit risk is deemed to exist, these investments are not considered as credit-impaired. The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized.

Gross unrealized losses on investments in debt securities and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2024, were:

NOTE 5

Fair value measurements. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs when possible. The three levels of inputs used to measure fair value are as follows:

•Level 1 – quoted prices in active markets for identical assets or liabilities;

•Level 2 – observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and

•Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

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At December 31, 2025, financial instruments measured at fair value on a recurring basis are summarized below:

At December 31, 2024, financial instruments measured at fair value on a recurring basis are summarized below:

At December 31, 2025, Level 1 financial instruments consist of equity securities. Level 2 financial instruments consist of municipal, governmental, and corporate bonds, both U.S. and foreign. In accordance with the Company’s policies and guidelines which incorporate relevant statutory requirements, the Company’s third-party registered investment manager invests only in securities rated as investment grade or higher by the major rating services, where observable valuation inputs are significant. The fair value of the Company's investments in debt and equity securities is primarily determined using a third-party pricing service provider. The third-party pricing service provider calculates the fair values using both market approach and model valuation methods, as well as pricing information obtained from brokers, dealers and custodians. Management ensures the reasonableness of the third-party service valuations by comparing them with pricing information from the Company's investment manager.

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NOTE 6

Investment income and net realized and unrealized gains. Investment income and net realized and unrealized gains for the years ended December 31 are detailed below:

In 2025, net realized and unrealized gains included net gains of $4.4 million on sale of debt and equity securities, partially offset by net losses of $2.0 million related to contingent liability adjustments related to prior title acquisitions and $2.9 million related to disposal of a title subsidiary. Total investment income in 2025 and 2024 was higher compared to 2023, primarily due to higher interest income resulting from earned interest from eligible escrow balances (which started at mid-2023) and higher cash, short-term investment and notes receivable balances.

In 2024, net realized and unrealized gains included a $2.4 million gain on a contingent liability adjustment related to a prior title company acquisition, partially offset by losses of $1.1 million related to a cost-basis investment impairment and $0.8 million related to a sale of a title office.

Net investment gains and losses recognized related to investments in equity securities for the years ended December 31 are as follows:

Proceeds from sales of investments in securities for the years ended December 31 are as follows:

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NOTE 7

Income taxes. As described in Note 1-R, additional disclosures below are presented pursuant to the requirements of ASU 2023-09. Amounts for 2024 and 2023, where applicable, were recast to conform with the 2025 presentation.

Income tax expense consists of the following:

The components of income before taxes and after deducting noncontrolling interests are as follows:

Income taxes paid (net of refunds received) by jurisdiction consists of the following:

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The following table reconciles income tax expense computed at the federal statutory rate with income tax expense as reported using specific categories required by ASU 2023-09. Additionally, categories of at least 5% of the expected tax expense are disaggregated by nature or jurisdiction (in $ thousands, except for income tax rates):

(1)Calculated using income before taxes and after deducting noncontrolling interests.

(2)State taxes in Alaska, Arizona, California, Illinois, Pennsylvania, and Texas comprise the majority (greater than 50%) of the tax effect in this category.

(3)For U.S. income tax purposes, the Company’s Canadian operation is a branch of Guaranty. As a result, the Canadian net deferred tax liability is offset in the U.S. as a deferred tax asset but not in an equal amount given differing tax rates in Canada and the U.S.

• Amounts presented are rounded to the nearest tenth of a percent and may not foot as presented.

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Deferred tax assets and liabilities resulting from the same tax jurisdiction are netted and presented as either an asset or liability on the consolidated balance sheets. Deferred tax assets and liabilities resulting from different tax jurisdictions are not netted on the consolidated balance sheets. Deferred tax assets and liabilities (netted based on the related temporary difference components) as of December 31 are detailed below.

At December 31, 2025, the Company's deferred tax assets related to NOL carryforwards are composed of a $25.0 million U.S. federal NOL carryforward from 2021 and 2025 acquisitions with no expiration dates, various state NOL carryforwards which will expire in varying amounts from 2026 through 2046 or have unlimited carryforwards, and foreign NOL carryforwards which will expire in varying amounts from 2026 through 2044 or have unlimited carryforward periods. The future utilization of all NOL carryforwards is subject to various limitations. At December 31, 2025, the Company had $14.3 million of foreign tax credit carryforwards that will begin to expire in 2029. The future utilization of these credit carryforwards is subject to various limitations.

The Company's valuation allowance at December 31, 2025 relates primarily to foreign tax credit carryforwards, certain research and development credits acquired in 2021, and certain state and foreign NOL carryforwards which the Company believes will not be utilized prior to expiration.

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The Company’s income tax returns are routinely subject to examinations by U.S. federal, foreign, and state and local tax authorities. At December 31, 2025, the Company’s 2022 through 2024 U.S. federal income tax returns and 2021 through 2024 Canadian income tax returns remain subject to examination. The Company is subject to routine examinations by state tax jurisdictions and remains subject to examination for 2020 through 2024 tax returns. The Company expects no material adjustments from any ongoing tax return examinations.

On July 4, 2025, H.R. 1, the "One Big Beautiful Bill Act" (OBBBA) was enacted into law. Certain provisions of H.R. 1 affected the Company’s current cash tax liability, primarily due to the acceleration of tax deductions on investments in fixed assets and research & development expenditures. However, these effects had no impact on the Company’s total income tax expense and were not material to the Company’s consolidated financial statements. The Company will continue to monitor regulatory guidance and interpretive developments related to the H.R. 1 and will recognize any additional impact in the period in which they become known.

NOTE 8

Goodwill and other intangibles. The summary of changes in goodwill is as follows:

An aggregate of $86.6 million of the goodwill recognized in 2025 related to acquisitions is tax-deductible over a period of 15 years from the corresponding acquisition date, while there was no such amount recognized in 2024. In connection with all of its acquisitions, the Company recorded other intangible assets of $184.0 million and $12.0 million during 2025 and 2024, respectively.

In December 2025, the Company acquired all of Mortgage Contracting Services (MCS) for a total cash purchase consideration of $332.7 million. MCS provides property preservation and field services to mortgage servicers and is included in the real estate solutions segment. Based on management's provisional purchase accounting, which is expected to be completed within the one-year measurement period from the acquisition date, the Company recognized fair value amounts of assets acquired and liabilities assumed at acquisition date, primarily related to goodwill ($152.2 million), other intangible assets ($175.0 million), trade receivables ($17.9 million) and accounts payable and accrued liabilities ($10.2 million). Provisional other intangible assets recognized were primarily related to customer relationships, internally-developed technology and trademark.

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The summary of other intangibles by major class (refer to Note 1-M) is as follows:

Total amor tization expense recorded for other intangible assets was $31.9 million and $32.1 million in 2025 and 2024, respectively. The annual amortization expense expected to be recognized in the next five years relating to other intangible assets is approximately $31.8 million in 2026, $23.0 million in 2027, $21.7 million in 2028, $21.0 million in 2029 and $19.7 million in 2030.

NOTE 9

Notes payable and line of credit. A summary of notes payable and line of credit is as follows:

(1)Applicable interest rate was 5.4% during the year ended December 31, 2025.

In November 2021, the Company completed an underwritten offering of $450 million aggregate principal amount of unsecured 3.6% Senior Notes due on November 15, 2031 (Senior Notes). The proceeds from the issuance of the Senior Notes, net of underwriting discounts and issuance costs, were $444.0 million, which were used to repay an outstanding balance on a previous term loan and for general corporate purposes. Interest on the Senior Notes is paid semi-annually in May and November at a fixed rate of 3.6% per annum. At any time prior to August 15, 2031, the Senior Notes are subject to redemption, at the Company's option, upon not less than 15 days' notice, in whole or in part, at a redemption price equal to the greater of:100% of the principal amount of the Senior Notes to be redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest to be redeemed. The Senior Notes are the Company’s general senior unsecured obligations, are not guaranteed by any of the Company’s subsidiaries, rank equally in right of payment with the Company’s existing and future senior unsecured indebtedness, and are effectively subordinated to all liabilities of the Company’s subsidiaries and to all of the Company’s secured indebtedness to the extent of the value of the collateral securing such indebtedness. As of December 31, 2025 and 2024, the fair value of the Senior Notes, based on trade transactions on or near year-end, was $397.6 million and $392.2 million, respectively. These values are considered Level 1 inputs based on the fair value hierarchy discussed in Note 5.

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In October 2021, the Company entered into a senior unsecured credit agreement, comprising of a $200.0 million unsecured revolving credit facility (maturing in October 2026). In October 2025, the Company entered into a new senior unsecured credit agreement (the New Credit Agreement) which amended and replaced the previously existing senior unsecured credit agreement. The New Credit Agreement is comprised of a $300.0 million unsecured revolving credit facility, which matures in October 2030 and includes an option to increase the revolving credit facility by up to $125.0 million. The New Credit Agreement is guaranteed by the certain of the Company's wholly-owned subsidiaries. At the Company’s election, borrowings under the New Credit Agreement will bear interest at either (a) the Base Rate plus the Applicable Margin (each as defined in the agreement) or (b) the adjusted Term SOFR (as defined in the agreement) plus the applicable margin. The applicable margin, based on the Company's Debt to Capitalization Ratio (as defined in the agreement), for revolving loans ranges from 0.25% to 0.625% per annum for Base Rate borrowings and 1.25% to 1.625% per annum for Term SOFR borrowings. Further, a commitment fee accrues, based on the Company's debt to capitalization Ratio, ranging from 0.10% to 0.25% per annum on the average daily unused portion of the commitments. The New Credit Agreement also contains certain consolidated financial covenants which, as detailed in the agreement, limit the Company's maximum debt to total capitalization ratio and minimum consolidated net worth.

During December 2025, the Company drew $200.0 million from the revolving line of credit which remained outstanding at the end of 2025. As of December 31, 2025, the remaining balance of the line of credit available for use was $97.5 million, net of an unused $2.5 million letter of credit. The Company was in compliance with all covenants as of December 31, 2025 and 2024 under the New Credit Agreement.

The Company's qualified intermediary in tax-deferred property exchanges pursuant to Section 1031 of the Internal Revenue Code (Section 1031) enters into short-term loan agreements with parties to an exchange in the ordinary course of its business. The outstanding balances pursuant to these loans are presented as part of other notes payable in the above table and are secured by cash that is included in cash and cash equivalents on the Company's consolidated balance sheet. Borrowings and repayments on these short-term loans are reflected as financing activities in the consolidated statements of cash flows.

NOTE 10

Estimated title losses. A summary of estimated title losses is as follows:

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NOTE 11

Share-based payments. As part of its incentive compensation program for executives and senior management employees, the Company provides share-based awards, which primarily include a combination of time-based restricted stock units and performance-based restricted stock units, and are typically granted annually during the first quarter of the year. Each restricted stock unit represents a contractual right to receive a share of the Company's Common Stock. The time-based units generally vest on each of the first three anniversaries of the grant date, while the performance-based units vest upon achievement of certain financial objectives and employee service requirements over a period of approximately three years. The Company has not granted stock options since 2021 and all outstanding stock option awards are already fully vested. The compensation expense associated with the share-based awards is calculated based on the fair value of the related award and recognized over the corresponding vesting period, and is presented as part of employee costs in the consolidated statement of income and comprehensive income. Award forfeitures are recorded as credits against employee costs in the period in which they occur.

The aggregate grant-date fair value of restricted stock unit awards to employees during 2025, 2024 and 2023 was $17.1 million (241,800 stock units with an average grant price of $70.69), $18.9 million (297,400 stock units with an average grant price of $63.41) and $12.3 million (299,000 stock units with an average grant price of $41.09), respectively.

A summary of the restricted stock unit activity during the year ended December 31, 2025 is presented below:

A summary of the stock option activity during the year ended December 31, 2025 is presented below:

As of December 31, 2025, the aggregate intrinsic value and weighted average remaining contractual term related to outstanding options was $13.8 million and 4.3 years, respectively.

The fair value of grants that vested in 2025 and 2024 aggregated to $13.2 million and $13.0 million, respectively. For the years ended December 31, 2025, 2024 and 2023, compensation costs recognized related to share-based awards to employees were approximately $16.1 million, $12.7 million and $10.1 million, respectively. The total tax benefits recognized in the consolidated statements of income and comprehensive income from tax deductions relating to vesting of equity awards in 2025, 2024 and 2023 were $2.3 million, $2.2 million and $0.9 million, respectively. As of December 31, 2025, compensation costs not yet recognized related to all employee nonvested awards was $13.8 million, which is expected to be recognized over a weighted average period of 1.0 year.

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NOTE 12

Earnings per share. Basic earnings per share (EPS) attributable to Stewart is calculated by dividing net income attributable to Stewart by the weighted-average number of shares of Common Stock outstanding during the reporting periods. To calculate diluted EPS, the number of shares is adjusted to include the number of additional shares that would have been outstanding if restricted units were vested and issued, and stock options were exercised. In periods of loss, dilutive shares are excluded from the calculation of the diluted EPS and diluted EPS is computed in the same manner as basic EPS.

The calculation of the basic and diluted EPS is as follows:

NOTE 13

Reinsurance. As is industry practice, the Company cedes risks to other title insurance underwriters and reinsurers on certain transactions. However, the Company remains liable if the reinsurer should fail to meet its obligations. The Company also assumes risks from other underwriters on a transactional basis as well as on certain reinsurance treaties. Payments and recoveries on reinsured losses were insignificant during each of the years ended December 31, 2025, 2024, and 2023. The total amount of premiums for assumed and ceded risks was less than 0.3% of consolidated title revenues in each of the last three years and there wereno outstanding amounts of reinsurance recoverable or payable at December 31, 2025 and 2024.

NOTE 14

Leases. Total operating lease expense was $46.6 million, $46.3 million and $49.6 million in 2025, 2024 and 2023, respectively, which included $3.2 million, $3.4 million and $3.3 million, respectively, of lease expense related to short-term leases and equipment. Total finance lease expense was $0.2 million, $0.3 million and $0.6 million in 2025, 2024 and 2023, respectively.

Total operating lease liabilities are presented on the consolidated balance sheets and there were no material outstanding finance lease obligations at December 31, 2025 and 2024. Lease-related assets as of December 31 are as follows:

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Other information related to operating leases during the years ended December 31 is as follows:

Future minimum lease payments under operating leases as of December 31, 2025 are as follows:

NOTE 15

Contingent liabilities and commitments. The Company routinely holds third-party funds in segregated escrow accounts pending the closing of real estate transactions resulting in a contingent liability to the Company of approximately $1.7 billion at December 31, 2025. In addition, the Company is contingently liable for disbursements of escrow funds held by independent agencies in those cases where specific insured closing guarantees have been issued. The Company owns a qualified intermediary engaged in Section 1031 tax-deferred property exchanges. The Company holds the proceeds from these transactions until a qualifying exchange can occur. This resulted in a contingent liability to the Company of approximately $1.2 billion at December 31, 2025. As with industry practice, escrow and Section 1031 exchanger fund accounts are not included in the consolidated balance sheets.

In the ordinary course of business, the Company guarantees the third-party indebtedness of certain of its consolidated subsidiaries. As of December 31, 2025, the maximum potential future payments on the guarantees are not more than the related notes payable and line of credit balance recorded in the consolidated balance sheets (refer to Note 9). The Company also guarantees the indebtedness related to lease obligations of certain of its consolidated subsidiaries. The maximum future obligations arising from these lease-related guarantees are not more than the Company’s future lease obligations (refer to Note 14) plus lease operating expenses. As of December 31, 2025, the Company also had unused letters of credit aggregating $4.9 million related to workers’ compensation coverage and other insurance. The Company does not expect to make any payments on these guarantees.

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NOTE 16

Regulatory and legal developments. The Company is subject to claims and lawsuits arising in the ordinary course of its business, most of which involve disputed policy claims. In some of these lawsuits, the plaintiffs seek exemplary or treble damages in excess of policy limits. The Company does not expect that any of these ordinary course proceedings will have a material adverse effect on its consolidated financial condition or results of operations. The Company believes that it has adequate reserves for the various litigation matters and contingencies referred to in this paragraph and that the likely resolution of these matters will not materially affect its consolidated financial condition or results of operations.

The Company is subject to non-ordinary course of business claims or lawsuits from time to time. To the extent the Company is currently the subject of these types of lawsuits, the Company has determined either that a loss is not reasonably possible or that the estimated loss or range of loss, if any, will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Additionally, the Company occasionally receives various inquiries from governmental regulators concerning practices in the insurance industry. Many of these practices do not concern title insurance. To the extent the Company is in receipt of such inquiries, it believes that, where appropriate, it has adequately reserved for these matters and does not anticipate that the outcome of these inquiries will materially affect its consolidated financial condition or results of operations.

The Company is subject to various other administrative actions, investigations and inquiries into its business conduct in certain of the states in which it operates. While the Company cannot predict the outcome of the various regulatory and administrative matters, it believes that it has adequately reserved for these matters and does not anticipate that the outcome of any of these matters will materially affect its consolidated financial condition or results of operations.

NOTE 17

Revenues. The Company's operating revenues, summarized by type, are as follows:

NOTE 18

Segment information. The Company's chief operating decision maker (CODM) is the chief executive officer, who evaluates performance of and allocates resources to itsthree reportable segments: title insurance and related services (title), real estate solutions, and corporate. The Company uses revenues and pretax income in assessing segment performance and trends. The title segment provides services needed to transfer title to property in a real estate transaction and includes services such as searching, abstracting, examining, closing and insuring the condition of the title to the property. In addition, the title segment includes home and personal insurance services, Internal Revenue Code Section 1031 tax-deferred exchanges, and digital customer engagement platform services. The real estate solutions segment supports the real estate industry and primarily includes credit and real estate information services, valuation services, online notarization and closing services, and capital markets search services. The corporate segment is primarily comprised of the parent holding company and centralized support services departments.

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Statement of income information related to these reportable segments, including major expense captions used to calculate pretax income, for the years ended December 31 is as follows:

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The Company does not provide asset information by reportable segment as it does not routinely evaluate the asset position by segment.

Revenues for the years ended December 31 in the United States and all international operations are as follows:

NOTE 19

Other comprehensive income (loss). Changes in the balances of each component of other comprehensive income (loss) and the related tax effects are as follows (in $ thousands):

NOTE 20

Common Stock. During 2025, the Company issued an aggregate of 2,185,000 new shares of its Common Stock ($1 par value), which included shares purchased by the underwriters to the transaction. Proceeds from the Common Stock issuance, net of issuance costs, amounted to $140.8 million.

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