STEWART INFORMATION SERVICES CORP

Previous wording

Third quarter 2025 overview. We reported net income attributable to Stewart of $44.3 million ($1.55 per diluted share) for the third quarter 2025, compared to net income of $30.1 million ($1.07 per diluted share) for the third quarter 2024. Pretax income before noncontrolling interests for the third quarter 2025 was $61.2 million compared to pretax income before noncontrolling interests of $42.8 million for the prior year quarter. Consolidated operating revenues in the third quarter 2025 were $776.5 million, which was an improvement of $126.9 million, or 20%, compared to the prior year quarter. The third quarter 2025 results included $5.6 million of pretax net realized and unrealized gains, primarily driven by $4.3 million of net unrealized gains on fair value changes of equity securities investments and a $1.2 million realized gain on a sale of real property. Third quarter 2024 results included $4.7 million of pretax net realized and unrealized gains primarily related to net unrealized gains on fair value changes of equity securities investments.

Current wording

First quarter 2026 overview. We reported net income attributable to Stewart of $17.0 million ($0.55 per diluted share) for the first quarter 2026, compared to net income attributable to Stewart of $3.1 million ($0.11 per diluted share) for the first quarter 2025. Pretax income before noncontrolling interests for the first quarter 2026 was $23.6 million compared to pretax income before noncontrolling interests of $5.9 million for the prior year quarter. First quarter 2026 and 2025 results included $2.9 million and $3.1 million, respectively, of pretax net realized and unrealized gains, both primarily driven by net gains from fair value changes of equity securities investments recorded in the title segment.

Previous wording

In regard to the corporate segment, pretax results were driven by net expenses attributable to corporate operations, which totaled $9.5 million for both the third quarters 2025 and 2024, while the segment recorded net realized gains of $1.4 million in the third quarter 2025, primarily resulting from a sale of real property.

Current wording

In regard to the corporate segment, pretax results were driven by net expenses attributable to corporate operations, which increased to $12.2 million for the first quarter 2026, compared to $9.9 million in the first quarter 2025, primarily driven by higher interest expense on increased debt balances.

Previous wording

The preparation of the Company’s condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of certain assets, liabilities, revenues, expenses and related disclosures surrounding contingencies and commitments. Actual results can differ from our accounting estimates. While we do not anticipate significant changes in our estimates, there is a risk that such changes could have a material impact on our consolidated financial condition or results of operations for future periods. During the nine months ended September 30, 2025, we made no material changes to our critical accounting estimates as previously disclosed in Management’s Discussion and Analysis in the 2024 Form 10-K.

Current wording

The preparation of the Company’s condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of certain assets, liabilities, revenues, expenses and related disclosures surrounding contingencies and commitments. Actual results can differ from our accounting estimates. While we do not anticipate significant changes in our estimates, there is a risk that such changes could have a material impact on our consolidated financial condition or results of operations for future periods. During the three months ended March 31, 2026, we made no material changes to our critical accounting estimates as previously disclosed in Management’s Discussion and Analysis in the 2025 Form 10-K.

Previous wording

Comparisons of our results of operations for the three and nine months ended September 30, 2025 with the corresponding periods in the prior year are set forth below. Factors contributing to fluctuations in the results of operations are presented in the order of their monetary significance, and we have quantified, when necessary, significant changes. Segment results are included in the discussions and, when relevant, are discussed separately.

Current wording

Comparisons of our results of operations for the three months ended March 31, 2026 with the corresponding periods in the prior year are set forth below. Factors contributing to fluctuations in the results of operations are presented in the order of their monetary significance, and we have quantified, when necessary, significant changes. Segment results are included in the discussions and, when relevant, are discussed separately.

Previous wording

Operating environment. Existing home sales in September 2025 were approximately 4.06 million units (seasonally-adjusted basis), a slight improvement of 4% and 3% compared to September 2024 and June 2025, respectively, which was primarily due to gradually falling mortgage rates and improving housing affordability. According to NAR, the September 2025 median existing home price of $415,200 marked the 27th consecutive month of year-over-year median price increases, but it was 4% lower than June 2025 as home prices declined during the third quarter 2025. As of September 2025, the unsold home inventory in the U.S. was equivalent to 1.55 million units, or 14% higher compared to last year. In regard to new residential construction, U.S. housing starts(seasonally-adjusted) as of September 2025 were 6% lower compared to last year, while newly-issued building permits as of September 2025 declined by 11% compared to last year.

Current wording

Operating environment. According to NAR, March 2026 existing home sales (seasonally-adjusted basis) were approximately 3.98 million units, representing declines of 1% and 4% compared to last year and February 2026, respectively. The decreases were primarily attributed to lower consumer confidence and elevated mortgage interest rates. As a result of continued limited housing inventory, the median existing home price rose to $408,800 in March 2026, a new record high for the month and the 33rd consecutive month of year-over-year median price appreciation. In regard to residential construction activity in March 2026, U.S. housing starts(seasonally-adjusted) were 11% higher, while newly-issued building permits declined 7% compared to last year.

Previous wording

Based on averaged estimates by Fannie Mae and MBA, total U.S. single family mortgage originations in the third quarter 2025 were $518 billion, or an improvement of 14% compared to the third quarter 2024, with total refinancing and purchasing transactions growing 46% and 6%, respectively, during the third quarter 2025. The 30-year fixed mortgage interest rate averaged 6.6% during the third quarter 2025 which was comparable to 6.5% from the third quarter 2024, but improved from 6.8% in the second quarter 2025. It is expected that the 30-year fixed mortgage interest rate will average around 6.4% in the fourth quarter 2025. Fourth quarter 2025 existing and new homes sales (seasonally-adjusted) are forecast to improve 3% and 5%, respectively, while fourth quarter total loan originations dollars are anticipated to increase 2% compared to the third quarter 2025, resulting from 32% higher refinancing transactions and 9% lower purchase transactions.

Current wording

Based on averaged estimates by Fannie Mae and MBA, total U.S. single family mortgage originations increased 42% to $536 billion during the first quarter 2026 compared to the first quarter 2025. This increase was primarily driven by a 128% rise in refinancing originations, while purchase lending improved by 10%. The 30-year fixed mortgage interest rate, while still relatively elevated, averaged 6.1% during the first quarter 2026 compared to 6.8% in the prior year quarter. The 30-year fixed mortgage interest rate is expected to remain relatively stable for the remainder of the year. For the second quarter 2026, existing and new homes sales (seasonally-adjusted) are expected to increase 5% and 7%, respectively, compared to last year, while total purchase and refinancing originations are forecast to improve 1% and 63%, respectively, compared to the second quarter 2025.

Previous wording

Title revenues. Direct title revenue information is presented below:

Current wording

Title revenues. Direct title revenues information is presented below:

Previous wording

Domestic commercial revenues improved 17% and 33% in the third quarter and first nine months of 2025, respectively, compared to the same periods of 2024, primarily due to increased commercial closed transactions in 2025 across all asset sectors, including data center, energy, mixed-use and retail. The average domestic commercial fee per file in the third quarter 2025 was $17,700, which was comparable to the prior year quarter, while the average fee per file in the first nine months of 2025 improved 11% to $16,800, compared to the same period in 2024, primarily driven by large data center and energy transaction sizes.

Current wording

Domestic commercial revenues improved $24.6 million, or 35%, in the first quarter 2026 compared to the first quarter 2025, primarily driven by higher commercial transaction size and volume, primarily across energy, industrial, site development, data center and retail asset classes. The average domestic commercial fee per file in the first quarter 2026 was $21,100, which is a 33% improvement compared to $15,800 in the same period in 2025, while domestic commercial closed orders increased 2%.

Previous wording

Gross revenues from independent agency operations increased $77.6 million, or 28%, and $164.9 million, or 22%, in the third quarter and first nine months of 2025, respectively, primarily due to improved volumes in our key agency states and increased commercial transactions compared to the same periods in 2024. Agency revenues, net of retention, increased $12.1 million, or 25%, and $26.0 million, or 20%, in the third quarter and first nine months of 2025, respectively, in line with the gross agency revenue increases. Refer further to the "Retention by agencies" discussion under Expenses below.

Current wording

Gross revenues from independent agency operations increased $65.5 million, or 25%, in the first quarter 2026, primarily due to improved volumes in our key agency states and increased commercial transactions compared to the same period in 2025. Agency revenues, net of retention, increased $10.7 million, or 23%, in the first quarter 2026, in line with the gross agency revenue increase. Refer further to the "Retention by agencies" discussion under Expenses below.

Previous wording

Investment income. Investment income in the third quarter and first nine months of 2025 increased $1.2 million, or 9%, and $2.9 million, or 7%, respectively, compared to the same periods in 2024, primarily driven by higher interest income from eligible escrow balances and increased dividend income from our cost-basis investments in 2025.

Current wording

Investment income. Investment income increased $1.2 million, or 9%, in the first quarter 2026 compared to the prior year quarter, primarily driven by higher interest income resulting from increased cash balances in 2026.

Previous wording

Retention by agencies. Amounts retained by title agencies are based on agreements between agencies and our title underwriters. Amounts retained by independent agencies, as a percentage of revenues generated by them, averaged 83.2% in both the third quarter and first nine months of 2025, compared to 82.8% and 83.0% in the third quarter and first nine months of 2024, respectively, primarily as a result of increased 2025 revenues from states with relatively higher retention rates. The average retention percentage may vary from period to period due to the geographical mix of agency operations, the volume of title revenues and, in some states, laws or regulations. Due to the variety of such laws or regulations, as well as competitive factors, the average retention rate can differ significantly from state to state. In addition, a high proportion of our independent agencies are in states with retention rates greater than 80%. We continue to focus on increasing profit margins in every state, increasing premium revenue in states where remittance rates are higher, and maintaining the quality of our agency network, which we believe to be the industry’s best, in order to mitigate claims risk and drive consistent future performance. While market share is important in our agency operations channel, it is not as important as margins, risk mitigation and profitability.

Current wording

Retention by agencies. Amounts retained by title agencies are based on agreements between agencies and our title underwriters. Amounts retained by independent agencies, as a percentage of revenues generated by them, averaged 82.9% in the first quarter 2026, which was comparable to 82.8% in the first quarter 2025. The average retention percentage may vary from period to period due to the geographical mix of agency operations, the volume of title revenues and, in some states, laws or regulations. Due to the variety of such laws or regulations, as well as competitive factors, the average retention rate can differ significantly from state to state. In addition, a high proportion of our independent agencies are in states with retention rates greater than 80%. We continue to focus on increasing profit margins in every state, increasing premium revenue in states where remittance rates are higher, and maintaining the quality of our agency network, which we believe to be the industry’s best, in order to mitigate claims risk and drive consistent future performance. While market share is important in our agency operations channel, it is not as important as margins, risk mitigation and profitability.

Previous wording

Employee costs. Consolidated employee costs increased $17.4 million, or 9%, and $59.3 million, or 11%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024, primarily driven by higher salaries and employee benefits expenses primarily resulting from increased average employee counts (which increased 9% and 5%, respectively) and higher incentive compensation consistent with overall improved revenues. Employee costs in the title segment increased $15.4 million, or 9%, and $53.7 million, or 11%, in the third quarter and first nine months of 2025, respectively, while employee costs in the real estate solutions segment increased $2.0 million, or 14%, and $5.4 million, or 13%, in the third quarter 2025 and first nine months of 2025, respectively, primarily driven by volume growth in both segments.

Current wording

Employee costs. Consolidated employee costs increased $35.3 million, or 19%, in the first quarter 2026 compared to the same period in 2025, primarily driven by higher salaries and employee benefits expenses related to an increased average employee count, as well as higher incentive compensation consistent with improved operating results. Employee costs in the title segment increased $26.9 million, or 16%, while employee costs in the real estate solutions segment increased $8.6 million, or 63%, in the first quarter 2026, both primarily driven by volume growth and recent acquisitions.

Previous wording

Total employee costs, as a percentage of total operating revenues, improved to 27.2% and 29.1% in the third quarter and first nine months of 2025, respectively, compared to 29.8% and 30.8% in the respective periods in 2024, primarily driven by higher 2025 operating revenues. During the third quarter and first nine months of 2025, we had an average of approximately 7,400 and 7,100 employees, respectively, compared to 6,800 and 6,700 in the third quarter and first nine months of 2024, respectively. Average cost per employee in the third quarter 2025 was comparable to the prior year quarter, while average cost per employee increased 5% in the first nine months of 2025 primarily due to increased incentive compensation expense compared to the same period in 2024.

Current wording

Total employee costs, as a percentage of total operating revenues, improved to 28.9% in the first quarter 2026, compared to 31.2% in the first quarter 2025, primarily driven by higher 2026 operating revenues. During the first quarter 2026, we had an average of approximately 8,000 employees compared to 6,800 in the first quarter 2025, primarily driven by volume growth and acquisitions, while average cost per employee increased slightly by 2% compared to the prior year quarter.

Previous wording

Consolidated other operating expenses increased $29.5 million, or 19%, in the third quarter 2025 and $74.7 million, or 17%, in the first nine months of 2025, compared to the same periods in 2024. Total variable costs in the third quarter and first nine months of 2025 increased $23.9 million and $64.7 million (both 24%), respectively, primarily due to higher third-party service and appraiser expenses and title outside search fees related to increased operating revenues, primarily from our real estate solutions and commercial services operations. Total costs that are primarily fixed in nature increased $2.4 million, or 5%, and $4.8 million, or 4%, third quarter and first nine months of 2025, respectively, primarily due to higher technology costs and third-party consulting expenses compared to the same period in 2024. Independent costs increased $3.2 million, or 25%, and $5.2 million, or 14%, in the third quarter and first nine months of 2025, respectively, primarily due to higher travel, business promotion and litigation defense expenses, partially offset by lower office closure costs compared to the same periods in 2024.

Current wording

Consolidated other operating expenses increased $56.6 million, or 35%, in the first quarter 2026 compared to the first quarter 2025. Total variable costs in the first quarter 2026 increased $50.8 million, or 50%, primarily due to higher real estate solutions third-party service and appraiser expenses, as well as increased title outside search fees and premium taxes related to higher operating revenues. Total costs that are primarily fixed in nature increased slightly by $1.1 million, or 2%, while independent costs increased $4.7 million, or 36%, primarily driven by higher business promotion and marketing costs, travel expenses and bank fees. As a percentage of total operating revenues, consolidated other operating expenses in the first quarter 2026 increased to 28.4%, compared to 27.0% in the prior year quarter, primarily due to the increased size of our real estate solutions operations, which typically have higher other operating expenses.

Previous wording

Title losses. Provisions for title losses, as a percentage of title operating revenues, improved to 3.0% and 3.4% for the third quarter and first nine months of 2025, respectively, compared to 3.8% and 4.0% in the same periods in 2024, while total title loss expense in the third quarter and first nine months of 2025 decreased by $1.7 million (or 8%) and $1.1 million (or 2%), respectively, primarily as a result of our overall favorable claims experience, which was partially offset by increased title revenues in 2025. The title loss ratio in any given quarter can be significantly influenced by changes in large claims incurred, escrow losses and adjustments to reserves for existing large claims.

Current wording

Title losses. Provisions for title losses, as a percentage of title operating revenues, were 3.1% and 3.5% for the first quarter 2026 and 2025, respectively. Title loss expense in the first quarter 2026 increased by $0.7 million, or 4%, compared to the prior year quarter, primarily due to the effect of increased title revenues being partially offset by our continued overall favorable claims experience. The title loss ratio in any given quarter can be significantly influenced by changes in large claims incurred, escrow losses and adjustments to reserves for existing large claims.

Previous wording

Cash claim payments increased $1.5 million, or 8%, in the third quarter 2025 compared to the prior year quarter, primarily due to timing of payments on non-large claims, while cash claim payments decreased $13.0 million, or 19%, in the first nine months of 2025 compared to the same period in 2024, primarily due to lower payments on large and non-large claims related to prior policy years during 2025. We continue to manage and resolve large claims prudently and in keeping with our commitments to our policyholders.

Current wording

Total claim payments increased $5.4 million, or 28%, in the first quarter 2026 compared to the prior year quarter, primarily due to higher payments on large claims relating to prior policy years. We continue to manage and resolve large claims prudently and in keeping with our commitments to our policyholders.

Previous wording

In addition to title policy claims, we incur losses in our direct operations from escrow, closing and disbursement functions. These escrow losses typically relate to errors or other miscalculations of amounts to be paid at closing, including timing or amount of a mortgage payoff, payment of property or other taxes and payment of homeowners’ association fees. Escrow losses also arise in cases of fraud, and in those cases, the title insurer incurs the loss under its obligation to ensure that an unencumbered title is conveyed. Escrow losses are recognized as expenses when discovered or when contingencies associated with them (such as litigation) are resolved and are typically paid less than 12 months after the loss is recognized. There were no material escrow losses for both the three and nine-month periods ended September 30, 2025 and 2024.

Current wording

In addition to title policy claims, we incur losses in our direct operations from escrow, closing and disbursement functions. These escrow losses typically relate to errors or other miscalculations of amounts to be paid at closing, including timing or amount of a mortgage payoff, payment of property or other taxes and payment of homeowners’ association fees, and wire fraud. In those cases, the title insurer incurs the loss under its obligation to ensure that an unencumbered title is conveyed and performs various recovery actions to offset or reduce the impact to the title insurer. These escrow losses are recognized as expenses (net of any recovery) when discovered or when contingencies associated with them (such as litigation) are resolved and are typically paid less than 12 months after the loss is recognized.

Previous wording

Income taxes. Our effective tax rates (based on income before taxes and after deducting income attributable to noncontrolling interests) of 22.7% and 23.7% in the third quarter and first nine months of 2025, respectively, were lower compared to 23.3% and 26.2% in the same periods in 2024, primarily due to discrete income tax benefits recognized in the third quarter 2025 related to higher utilization of foreign income tax and research and development credits.

Current wording

Income taxes. Our effective tax rate (based on income before taxes and after deducting income attributable to noncontrolling interests) of 21.2% in the first quarter of 2026 was higher compared to 13.6% in the first quarter 2025, primarily due to the effect of discrete income tax benefits on a lower pretax income in the first quarter 2025.

Previous wording

Our liquidity and capital resources reflect our ability to generate cash flow to meet our obligations to stockholders, customers (payments to satisfy claims on title policies), vendors, employees, lenders and others. As of September 30, 2025, our total cash and investments, including amounts reserved pursuant to statutory requirements, aggregated $928.0 million, of which $491.4 million ($254.4 million, net of statutory reserves) was held in the United States and the rest internationally (principally in Canada).

Current wording

Our liquidity and capital resources reflect our ability to generate cash flow to meet our obligations to stockholders, customers (payments to satisfy claims on title policies), vendors, employees, lenders and others. As of March 31, 2026, our total cash and investments, including amounts reserved pursuant to statutory requirements, aggregated $920.0 million, of which $496.4 million ($292.1 million, net of statutory reserves) was held in the United States and the rest internationally (principally in Canada).

Previous wording

As a holding company, the parent company is funded principally by cash from its subsidiaries' earnings in the form of dividends, operating and other administrative expense reimbursements and pursuant to intercompany tax sharing agreements. Cash held at the parent company and its unregulated subsidiaries (which totaled $37.3 million at September 30, 2025) is available for funding the parent company's operating expenses, interest payments on debt and dividend payments to common stockholders. The parent company also receives distributions from Stewart Title Guaranty Company (Guaranty), its regulated title insurance underwriter, to meet cash requirements for acquisitions and other strategic investments.

Current wording

As a holding company, the parent company is funded principally by cash from its subsidiaries' earnings in the form of dividends, operating and other administrative expense reimbursements and pursuant to intercompany tax sharing agreements. Cash held at the parent company and its unregulated subsidiaries (which totaled $146.2 million at March 31, 2026) is available for funding the parent company's operating expenses, interest payments on debt and dividend payments to common stockholders. The parent company also receives distributions from Stewart Title Guaranty Company (Guaranty), its regulated title insurance underwriter, to meet cash requirements for acquisitions and other strategic investments.

Previous wording

We maintain investments in accordance with certain statutory requirements for the funding of statutory premium reserves. Statutory reserve funds are required to be fully funded and invested in high-quality securities and short-term investments. Statutory reserve funds are not available for current claim payments, which must be funded from current operating cash flow. Included in investments in debt and equity securities are statutory reserve funds of approximately $526.4 million and $535.5 million at September 30, 2025 and December 31, 2024, respectively. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $7.8 million and $9.5 million at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025, our known claims reserve totaled $66.5 million and our estimate of claims that may be reported in the future, under generally accepted accounting principles, totaled $453.9 million. In addition to this, we had cash and investments (at amortized cost and excluding equity method investments) of $288.0 million, which are available for underwriter operations, including claims payments, and acquisitions.

Current wording

We maintain investments in accordance with certain statutory requirements for the funding of statutory premium reserves. Statutory reserve funds are required to be fully funded and invested in high-quality securities and short-term investments. Statutory reserve funds are not available for current claim payments, which must be funded from current operating cash flow. Included in investments in debt and equity securities are statutory reserve funds of approximately $494.4 million and $492.0 million at March 31, 2026 and December 31, 2025, respectively. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $3.8 million and $4.4 million at March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, our known claims reserve totaled $65.3 million and our estimate of claims that may be reported in the future, under generally accepted accounting principles, totaled $451.5 million. In addition to this, we had cash and investments (at amortized cost and excluding equity method investments) of $203.1 million, which are available for underwriter operations, including claims payments, and acquisitions.

Previous wording

The ability of Guaranty to pay dividends to its parent is governed by Texas insurance law. The Texas Department of Insurance (TDI) must be notified of any dividend declared, and any dividend in excess of the greater of the statutory net operating income or 20% of surplus (which was approximately $173.0 million as of December 31, 2024) would be, by regulation, considered extraordinary and subject to pre-approval by the TDI. Also, the Texas Insurance Commissioner may raise an objection to a planned distribution during the notification period. Guaranty’s actual ability or intent to pay dividends to its parent may be constrained by business and regulatory considerations, such as the impact of dividends on surplus and liquidity, which could affect its ratings and competitive position, the amount of insurance it can write and its ability to pay future dividends. During the nine months ended September 30, 2025 and 2024, Guaranty paid dividends of $50.0 million and $30.0 million, respectively, to the parent company.

Current wording

The ability of Guaranty to pay dividends to its parent is governed by Texas insurance law. The Texas Department of Insurance (TDI) must be notified of any dividend declared, and any dividend in excess of the greater of the statutory net operating income or 20% of surplus (which was approximately $165.4 million as of December 31, 2025) would be, by regulation, considered extraordinary and subject to pre-approval by the TDI. Also, the Texas Insurance Commissioner may raise an objection to a planned distribution during the notification period. Guaranty’s actual ability or intent to pay dividends to its parent may be constrained by business and regulatory considerations, such as the impact of dividends on surplus and liquidity, which could affect its ratings and competitive position, the amount of insurance it can write and its ability to pay future dividends. Guaranty did not pay any dividends to the parent company during the first quarter 2026 and 2025.

Previous wording

Net cash provided by operations improved to $116.1 million during the first nine months of 2025, compared to net cash provided by operations of $67.7 million during the same period in 2024, primarily driven by the higher net income and lower claims payments in 2025. Although our business is labor intensive, we are focused on a cost-effective, scalable business model which includes utilization of technology, centralized back and middle office functions and business process outsourcing. We are continuing our emphasis on cost management, especially in light of the current economic environment due to elevated mortgage interest rates, specifically focusing on lowering unit costs of production and improving operating margins in our direct title and real estate solutions operations. Our plans to improve margins include additional automation of manual processes, further consolidation of our various systems and production operations, and full integration of acquisitions. We continue to invest in the technology necessary to accomplish these goals.

Current wording

Net cash used by operations improved $25.4 million to $4.5 million during the first quarter 2026, compared to $29.9 million of net cash used by operations during the same period in 2025, primarily driven by the higher net income and lower payments of liabilities in the first quarter 2026. Although our business is labor intensive, we are focused on a cost-effective, scalable business model which includes utilization of technology, centralized back and middle office functions and business process outsourcing. We are continuing our emphasis on cost management, especially in light of the current economic environment due to elevated mortgage interest rates, specifically focusing on lowering unit costs of production and improving operating margins in our direct title and real estate solutions operations. Our plans to improve margins include additional automation of manual processes, further consolidation of our various systems and production operations, and full integration of acquisitions. We continue to invest in the technology necessary to accomplish these goals.

Previous wording

Investing activities. Cash used and provided by investing activities is primarily related to proceeds from matured and sold investments, purchases of investments, capital expenditures and acquisition of businesses. During the first nine months of 2025 and 2024, total proceeds from securities investments sold and matured were $112.3 million and $113.1 million, respectively, while cash used for purchases of securities investments was $100.6 million and $99.2 million, respectively. Additionally, cash paid for cost-basis and other investments was $1.8 million and $31.1 million during the first nine months of 2025 and 2024, respectively.

Current wording

Investing activities. Cash used and provided by investing activities is primarily related to proceeds from matured and sold investments, purchases of investments, capital expenditures and acquisition of businesses. During the first quarters 2026 and 2025, total proceeds from securities investments sold and matured were $14.9 million and $27.9 million, respectively, while cash used for purchases of securities investments was $18.8 million and $22.4 million, respectively. Additionally, during the first quarters 2026 and 2025, we used $16.4 million and $12.3 million, respectively, of cash for expenditures related to property and equipment and other long-lived assets, while we used net cash of $1.9 million and $7.4 million, respectively, for acquisitions of title businesses. We maintain investment in capital expenditures at a level that enables us to implement technologies for increasing our operational and back-office efficiencies and to pursue growth in key markets.

Previous wording

Financing activities and capital resources. Total debt and stockholders’ equity were $446.1 million and $1.48 billion, respectively, as of September 30, 2025. As disclosed in Note 1-D to our condensed consolidated financial statements, we recently renewed and increased our line of credit facility, which was unused at the date of this report. At September 30, 2025, our debt-to-equity and debt-to-capitalization ratios, excluding our Section 1031 tax-deferred property exchange notes, were approximately 30% and 23%, respectively, which were better than 32% and 24%, respectively, at December 31, 2024.

Current wording

Financing activities and capital resources. Total debt and stockholders’ equity were $646.7 million and $1.65 billion, respectively, as of March 31, 2026. At March 31, 2026, our debt-to-equity and debt-to-capitalization ratios, excluding our Section 1031 tax-deferred property exchange notes, were approximately 39% and 28%, respectively, which were consistent with December 31, 2025.

Previous wording

During the first nine months of 2025, we paid total dividends of $42.6 million ($1.53 per common share), compared to total dividends paid of $40.0 million ($1.45 per common share) during the same period in 2024.

Current wording

During the first quarter 2026, we paid total dividends of $16.3 million ($0.53 per common share), compared to total dividends paid of $13.9 million ($0.50 per common share) during the same period in 2025.

Previous wording

We believe we have sufficient liquidity and capital resources to meet the cash needs of our ongoing operations, including consideration of the current economic and real estate environment created by the elevated mortgage interest rates. However, we may determine that additional debt or equity funding is warranted to provide liquidity for achievement of strategic goals or acquisitions or for unforeseen circumstances. Other than scheduled maturities of debt, operating lease payments and anticipated claims payments, we have no material contractual commitments. We expect that cash flows from operations and cash available from our underwriters, subject to regulatory restrictions, will be sufficient to fund our operations, including claims payments. However, to the extent that these funds are not sufficient, we may be required to borrow funds on terms less favorable than we currently have or seek funding from the equity market, which may not be successful or may be on terms that are dilutive to existing stockholders.

Current wording

We believe we have sufficient liquidity and capital resources to meet the cash needs of our ongoing operations, including consideration of the current economic and real estate environment created by the elevated mortgage interest rates. However, we may determine that additional debt or equity funding is warranted to provide liquidity for achievement of strategic goals or acquisitions or for unforeseen circumstances. Other than scheduled maturities of debt, operating lease payments and anticipated claims payments, we have no material contractual commitments. We expect that cash flows from operations and cash available from our underwriters, subject to regulatory restrictions, will be sufficient to fund our operations, including title claims payments. However, to the extent that these funds are not sufficient, we may be required to borrow funds on terms less favorable than we currently have or seek funding from the equity market, which may not be successful or may be on terms that are dilutive to existing stockholders.

Previous wording

Other comprehensive income (loss). Unrealized gains and losses on available-for-sale debt securities investments and changes in foreign currency exchange rates are reported net of deferred taxes in accumulated other comprehensive income (loss), a component of stockholders’ equity, until they are realized. During the first nine months of 2025, net unrealized investment gains of $9.7 million, net of taxes, which increased our other comprehensive income, were primarily related to net increases in the fair values of our foreign and corporate bond securities investments. These increases were primarily due to lower interest rates during the first nine months of 2025. During the first nine months of 2024, net unrealized investment gains of $11.8 million, net of taxes, which increased our other comprehensive income, were primarily related to net increases in the fair values of our foreign and corporate bond securities investments, primarily influenced by the Federal Reserve's reduction of interest rates during the third quarter 2024.

Current wording

Other comprehensive (loss) income. Unrealized gains and losses on available-for-sale debt securities investments and changes in foreign currency exchange rates are reported net of deferred taxes in accumulated other comprehensive income (loss), a component of stockholders’ equity, until they are realized. During the first quarter 2026, net unrealized investment losses of $2.8 million, net of taxes, which increased our other comprehensive loss, were primarily related to net decreases in the fair values of our foreign and corporate bond securities investments which were influenced by higher interest rates. During the first quarter 2025, net unrealized investment gains of $5.4 million, net of taxes, which increased our other comprehensive income, were primarily related to net increases in the fair values of our foreign and corporate bond securities investments, primarily due to lower interest rates.

Previous wording

Changes in foreign currency spot exchange rates (primarily related to our Canadian and United Kingdom operations) resulted in other comprehensive income, net of taxes, of $9.2 million in the first nine months of 2025 and other comprehensive loss, net of taxes, of $0.9 million during the first nine months of 2024. During the first nine months of 2025, the Canadian dollar and British pound both appreciated relative to the U.S. dollar, while during the same period in 2024, the effect of the British pound's appreciation were more than offset by the depreciation of the Canadian dollar relative to the U.S. dollar.

Current wording

Changes in foreign currency spot exchange rates (primarily related to our Canadian and United Kingdom operations) resulted in other comprehensive loss, net of taxes, of $2.6 million in the first quarter 2026, primarily due to the depreciation of both the Canadian dollar and British pound relative to the U.S. dollar. In the first quarter 2025, both the Canadian dollar and the British pound appreciated relative to the U.S. dollar, primarily resulting in other comprehensive income, net of taxes, of $1.0 million.