STEWART INFORMATION SERVICES CORP

Previous wording

Second quarter 2026 overview. We reported net income attributable to Stewart of $37.2 million ($1.21 per diluted share) for the second quarter 2026, compared to net income attributable to Stewart of $31.9 million ($1.13 per diluted share) for the second quarter 2025. Pretax income before noncontrolling interests for the second quarter 2026 was $55.1 million compared to pretax income before noncontrolling interests of $46.8 million for the prior year quarter. Second quarter 2026 results included $3.4 million of pretax net realized and unrealized gains, which were primarily related to net gains from fair value changes of equity securities investments recorded in the title segment. Second quarter 2025 results included $0.7 million of pretax net realized and unrealized gains, which primarily resulted from $2.4 million of net unrealized gains on fair value changes of equity securities investments, partially offset by a $1.2 million acquisition liability adjustment loss in the title segment.

Current wording

Third quarter 2026 overview. We reported net income attributable to Stewart of $30.3 million ($0.98 per diluted share) for the third quarter 2026, compared to net income attributable to Stewart of $44.3 million ($1.55 per diluted share) for the third quarter 2025. Pretax income before noncontrolling interests for the third quarter 2026 was $45.6 million compared to pretax income before noncontrolling interests of $61.2 million for the prior year quarter 2025. 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 in the title segment and a $1.2 million realized gain on a sale of real property in the corporate segment.

Previous wording

Title segment operating revenues increased $91.1 million (15%) in the second quarter 2026 compared to the second quarter 2025, primarily resulting from strong performance by our direct and agency title operations. Direct title revenues improved $15.3 million (5%), primarily due to increased domestic commercial transaction volume, while gross agency title revenues increased $75.8 million (25%). Net of agency retention, agency title revenues increased $13.0 million (26%) in the second quarter 2026 compared to the prior year quarter, consistent with the gross agency revenue growth.

Current wording

Title segment operating revenues increased $30.6 million (5%) in the third quarter 2026 compared to the third quarter 2025, primarily driven by growth in agency title revenues. Agency gross title revenues increased $24.6 million (7%), while direct title revenues increased $6.1 million (2%), primarily due to higher domestic commercial activity during the third quarter 2026. Net of agency retention, agency title revenues increased $5.0 million (8%) consistent with the gross agency revenue growth.

Previous wording

The title segment's combined employee costs and other operating expenses increased $29.6 million (11%) in the second quarter 2026 compared to the prior year quarter, primarily driven by higher salaries and employee benefits, incentive compensation, and outside search and service fees. As a percentage of operating revenues, these costs improved to 45% in the second quarter 2026 from 47% in the second quarter 2025, primarily due to higher title operating revenues. Title loss expense, as a percentage of title operating revenues, improved to 3.2% in the second quarter 2026 from 3.6% in the prior year quarter, primarily due to continued overall favorable claims experience.

Current wording

The title segment's combined employee costs and other operating expenses increased $16.5 million (6%) in the third quarter 2026 compared to the prior year quarter, primarily driven by higher title revenues, which resulted in increased salaries and employee benefits and higher title search and third-party service fees, and investment in talent to support growth initiatives. As a percentage of title operating revenues, these expenses were approximately 44%, which is comparable to the third quarter 2025. Title loss expense increased $4.0 million (20%) in the third quarter 2026, primarily due to higher title revenues, while the title loss ratio, as a percentage of title operating revenues, remained comparable to the prior year quarter.

Previous wording

Investment income decreased $1.4 million (9%) in the second quarter 2026, primarily driven by lower earned interest from eligible escrow balances resulting from lower interest rates and escrow balances compared to the second quarter 2025. Included in the title segment's pretax income in the second quarters 2026 and 2025 were acquisition intangible asset amortization expenses of $2.7 million and $2.8 million, respectively.

Current wording

Investment income decreased $1.1 million (8%) in the third quarter 2026, primarily due to lower interest income resulting from reduced eligible escrow balances compared to the prior year quarter. Net realized and unrealized gains in the third quarter 2026 were insignificant, while the third quarter 2025 activity was primarily related to net unrealized gains on fair value changes of equity securities investments. Included in the title segment's pretax income in the third quarters 2026 and 2025 were acquisition-related intangible asset amortization expenses of $2.1 million and $2.8 million, respectively.

Previous wording

Real estate solutions segment revenues increased $84.7 million (75%) in the second quarter 2026 compared to the second quarter 2025, primarily driven by our recently acquired MCS business and higher revenues from credit information and valuation services. Combined segment employee costs and other operating expenses increased $70.4 million (71%) in the second quarter 2026, primarily due to higher costs of services associated with revenue growth and increased employee count. The segment's pretax income in the second quarters 2026 and 2025 included acquisition intangible asset amortization expenses of $7.2 million and $5.5 million, respectively.

Current wording

Real estate solutions segment revenues increased $79.9 million (68%) in the third quarter 2026 compared to the third quarter 2025, primarily driven by the recent MCS acquisition and higher revenues from credit information and valuation services. Combined segment employee costs and other operating expenses increased $72.7 million (71%) in the third quarter 2026, primarily due to higher costs of services associated with revenue growth and increased employee count from acquisitions. The segment's pretax income in the third quarters 2026 and 2025 included acquisition-related intangible asset amortization expenses of $9.3 million and $5.8 million, respectively, with the higher amortization expense in the third quarter 2026 primarily being driven by the MCS acquisition.

Previous wording

In regard to the corporate segment, pretax results were driven by net expenses attributable to corporate operations, which increased to $12.0 million in the second quarter 2026, compared to $9.2 million in the second quarter 2025, primarily due to higher interest expense on increased debt balances.

Current wording

In regard to the corporate segment, pretax results were primarily driven by expenses attributable to corporate operations, which increased to $12.2 million in the third quarter 2026, compared to $9.5 million in the third quarter 2025, primarily due to 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 six months ended June 30, 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.

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 nine months ended September 30, 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 six months ended June 30, 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.

Current wording

Comparisons of our results of operations for the three and nine months ended September 30, 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. According to NAR, existing home sales (seasonally-adjusted basis) were approximately 4.09 million units in June 2026, representing a 3% increase from the prior year and a 2% decline from May 2026. NAR indicated that monthly sales activity continued to fluctuate as affordability remained sensitive to changes in mortgage interest rates. Additionally, home prices continue to rise, primarily as a result of limited housing inventory. The median existing home price in June 2026 increased to $440,600, an all-time high and the 36th consecutive month of year-over-year price increase. In addition, U.S. residential construction activity remained mixed during June 2026, as total housing starts increased 4% and 19% compared to June 2025 and May 2026, respectively, while newly issued building permits decreased 2% and 3% over the same periods.

Current wording

Operating environment. According to NAR, existing home sales (seasonally-adjusted basis) totaled approximately 3.99 million units in September 2026, representing a 2% decrease from the prior year and a 2% increase from August 2026. NAR noted that home sales activity in August and September were the lowest for the year, primarily due to elevated mortgage interest rates and affordability challenges. The median existing home price in September 2026 increased to $417,500, representing a 1% increase from the prior year and the 39th consecutive month of year-over-year price appreciation. Additionally, U.S. residential construction activity remained constrained during September 2026, as total housing starts decreased 7% and 5% compared to September 2025 and August 2026, respectively, while newly issued building permits were 3% below prior-year levels and unchanged from August 2026.

Previous wording

Based on averaged estimates by Fannie Mae and MBA as of June 2026, total U.S. single-family mortgage originations increased 14% to $581 billion in the second quarter 2026 compared to the second quarter 2025, primarily driven by 45% higher refinancing activity. While the 30-year fixed mortgage interest rate remained relatively elevated, it declined to an average of 6.4% during the second quarter 2026 compared to 6.8% in the second quarter 2025, and is expected to remain relatively stable through the remainder of the year. Looking ahead, Fannie Mae and MBA expect total originations in the third and fourth quarter of 2026 to be comparable to the same periods in 2025. Existing homes sales are expected to improve modestly by approximately 3% for the full year 2026, while total new homes sales are projected to remain consistent with 2025.

Current wording

Based on averaged estimates by Fannie Mae and MBA as of September 2026, total U.S. single-family mortgage originations were $514 billion in the third quarter 2026, or 1% lower compared to the third quarter 2025, primarily driven by 4% lower refinancing activity. The average 30-year fixed mortgage interest rate remained elevated during the third quarter 2026 at 6.7%, compared to 6.6% in the third quarter 2025 and 6.4% in the second quarter 2026. Mortgage rates rose throughout the quarter and exceeded 7.0% by the end of the third quarter, primarily due to the sharp increase in the 10-year Treasury yield, which reached its highest level since 2022. The 30-year fixed mortgage rate is expected to average 7.4% in the fourth quarter 2026. As a result, fourth quarter 2026 total mortgage originations are expected to be 23% lower, largely due to lower expected refinancing activity, while total home sales are projected to be 5% lower compared to the fourth quarter 2025.

Previous wording

Domestic commercial revenues improved $15.2 million, or 20%, and $39.8 million, or 28%, in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025, primarily driven by higher commercial transaction volume across energy, multi-family, industrial and other asset classes, as well as larger data center transaction sizes. The average domestic commercial fee per file for the second quarter 2026 was $16,900, consistent with the prior year quarter due to transaction mix across asset classes, while the average fee per file for the six months of 2026 increased 15% to $18,800 primarily driven by higher data center transaction size and volume compared to the same period in 2025.

Current wording

Domestic commercial revenues improved $7.3 million, or 9%, and $47.0 million, or 21%, in the third quarter and first nine months of 2026, respectively, compared to the same periods in 2025. The increases were primarily driven by higher commercial transaction volume across multiple asset classes, including retail and multi-family in the third quarter, and data center, energy, retail and multi-family properties during the first nine months of 2026. The average domestic commercial fee per file for the third quarter 2026 was $16,300, an 8% decline from the prior year quarter, primarily due to asset class transaction mix, while the average fee per file for the nine months of 2026 increased 7% to $17,900, primarily driven by increased size of energy transactions compared to the same period in 2025.

Previous wording

Domestic non-commercial revenues in the second quarter 2026 remained relatively consistent with the prior year quarter. For the first six months of 2026, domestic non-commercial revenues increased $9.6 million, or 3%, compared to the same period in 2025, primarily driven by higher refinancing activity and increased average fee per file. The average domestic residential fee per file improved to $3,200 for both the second quarter and first six months of 2026, compared to $2,900 and $3,000, respectively, for the same periods in 2025, primarily due to higher purchase transaction mix.

Current wording

Domestic non-commercial revenues increased $3.0 million, or 2%, in the third quarter 2026, primarily due to contributions from acquisitions, and increased $12.5 million, or 3%, in the first nine months of 2026, primarily driven by an increased average fee per file. The average domestic residential fee per file was $3,200 for both the third quarter and first nine months of 2026, compared to $3,200 and $3,100, respectively, for the same periods in 2025.

Previous wording

Gross revenues from independent agency operations increased $75.8 million, or 25%, and $141.2 million, or 25%, in the second quarter and first six months of 2026, respectively, primarily due to improved residential and commercial volumes in our key agency states. Agency revenues, net of retention, increased $13.0 million, or 26%, and $23.7 million, or 25%, in the second quarter and first six months of 2026, respectively, consistent with the gross agency revenue growth. Refer further to the "Retention by agencies" discussion under Expenses below.

Current wording

Gross revenues from independent agency operations increased $24.6 million, or 7%, and $165.8 million, or 18%, in the third quarter and first nine months of 2026, respectively, primarily due to improved residential and commercial volumes in our key agency states, including Florida, Michigan, New York and Pennsylvania. Agency revenues, net of retention, increased $5.0 million, or 8%, and $28.7 million, or 18%, in the third quarter and first nine months of 2026, respectively, consistent with the gross agency revenue growth. Refer further to the "Retention by agencies" discussion under Expenses below.

Previous wording

Real estate solutions revenues. Real estate solutions revenues improved $84.7 million, or 75%, in the second quarter 2026 and $149.0 million, or 71%, in the first six months of 2026 compared to the same periods in 2025, primarily driven by our recently acquired MCS business and higher revenues from our credit information and valuation services businesses.

Current wording

Real estate solutions revenues. Real estate solutions revenues improved $79.8 million, or 69%, in the third quarter 2026 and $228.8 million, or 70%, in the first nine months of 2026 compared to the same periods in 2025, primarily driven by our recently acquired MCS business and higher revenues from our credit information and valuation services businesses.

Previous wording

Investment income. Investment income in the second quarter and first six months of 2026 decreased $1.4 million, or 9%, and $0.2 million, or 1%, respectively, compared to the same periods in 2025, primarily driven by lower earned interest from eligible escrow balances resulting from lower interest rates and escrow balances.

Current wording

Investment income. Investment income in the third quarter and first nine months of 2026 decreased $1.1 million, or 8%, and $1.3 million, or 3%, respectively, compared to the same periods in 2025, primarily driven by lower interest income resulting from reduced eligible escrow balances.

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 83.5% and 83.2% in the second quarter and first six months of 2026, respectively, which was comparable to 83.7% and 83.2% in the same periods of 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.

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% and 83.1% in the third quarter and first nine months of 2026, respectively, compared to 83.2% in both periods in 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

Total employee costs, as a percentage of total operating revenues, improved to 27.4% and 28.1% in the second quarter and first six months of 2026, respectively, from 29.5% and 30.3% in the same periods of 2025, primarily due to higher operating revenues in 2026. During the second quarter and first six months of 2026, we had an average of approximately 8,200 and 8,100 employees, respectively, compared to approximately 7,000 and 6,900 in the same periods of 2025, primarily driven by volume growth and acquisitions. Average cost per employee for the second quarter and first six months of 2026 remained comparable with the second quarter and first six months of 2025.

Current wording

Total employee costs, as a percentage of total operating revenues, improved to 26.0% and 27.4% in the third quarter and first nine months of 2026, respectively, from 27.2% and 29.1% in the same periods of 2025, primarily due to higher operating revenues in 2026. During the third quarter and first nine months of 2026, we had an average of approximately 8,400 and 8,200 employees, respectively, compared to approximately 7,500 and 7,200 in the same periods of 2025, primarily driven by volume growth, acquisitions and investment in talent to support growth. Average cost per employee for the third quarter and first nine months of 2026 remained comparable with the third quarter and first nine months of 2025.

Previous wording

Other operating expenses. Other operating expenses include costs that are primarily fixed in nature, costs that follow, to varying degrees, changes in transaction volumes and revenues (variable costs) and costs that fluctuate independently of revenues (independent costs). Costs that are primarily fixed in nature include rent and other occupancy expenses, equipment rental, insurance, repairs and maintenance, technology costs and telecommunications expenses. Variable costs include third-party service and appraiser expenses related to real estate solutions operations, title outside search and service fees, attorney fee splits, credit losses (on receivables), copy supplies, delivery fees, postage, premium taxes and title plant maintenance expenses. Independent costs include general supplies, litigation defense, business promotion and marketing, and travel.

Current wording

Other operating expenses. Other operating expenses include costs that are primarily fixed in nature, costs that follow, to varying degrees, changes in transaction volumes and revenues (variable costs) and costs that fluctuate independently of revenues (independent costs). Costs that are primarily fixed in nature include rent and other occupancy expenses, equipment rental, insurance, repairs and maintenance, technology costs and telecommunications expenses. Variable costs include third-party service and appraiser expenses related to real estate solutions operations, third-party title search and service fees, attorney fee splits, credit losses (on receivables), copy supplies, delivery fees, postage, premium taxes and title plant maintenance expenses. Independent costs include general supplies, litigation defense, business promotion and marketing, and travel.

Previous wording

Consolidated other operating expenses increased $67.5 million, or 39%, and $124.1 million, or 37%, in the second quarter and first six months of 2026 compared to the same periods in 2025. Total variable costs in the second quarter and first six months of 2026 increased $54.1 million, or 47%, and $105.0 million, or 49%, respectively, primarily due to higher real estate solutions third-party service and appraiser expenses and increased title outside search and service fees and premium taxes related to operating revenue growth. Total costs that are primarily fixed in nature increased by $5.1 million, or 12%, and $6.2 million, or 7%, in the second quarter and first six months of 2026, respectively, primarily driven by higher external technology costs. Independent costs increased $8.2 million, or 55%, and $12.9 million, or 46%, in the second quarter and first six months of 2026, respectively, primarily resulting from acquisition integration expenses and higher business promotion and marketing costs, travel expenses and bank fees.

Current wording

Consolidated other operating expenses increased $69.6 million, or 38%, and $193.7 million, or 37%, in the third quarter and first nine months of 2026 compared to the same periods in 2025. Total variable costs in the third quarter and first nine months of 2026 increased $58.7 million, or 48%, and $163.7 million, or 48%, respectively, primarily due to higher real estate solutions third-party service and appraiser expenses and increased third-party title search and service fees related to operating revenue growth. Total costs that are primarily fixed in nature increased by $5.5 million, or 12%, and $11.8 million, or 9%, in the third quarter and first nine months of 2026, respectively, primarily driven by higher external technology costs. Independent costs increased $5.3 million, or 33%, and $18.3 million, or 41%, in the third quarter and first nine months of 2026, respectively, primarily resulting from MCS acquisition integration expenses and higher business promotion and marketing costs, travel expenses and bank fees.

Previous wording

As a percentage of total operating revenues, consolidated other operating expenses in the second quarter and first six months of 2026 increased to 27.4% and 27.9%, respectively, compared to 24.6% and 25.7% in the same periods of 2025, primarily due to the increased size of our real estate solutions operations, which typically have higher other operating expenses.

Current wording

As a percentage of total operating revenues, consolidated other operating expenses in the third quarter and first nine months of 2026 increased to 28.7% and 28.2%, respectively, compared to 23.8% and 25.0% in the same periods of 2025, primarily due to the increased size of our real estate solutions operations, which typically incur higher service costs as a percentage of revenue.

Previous wording

Title losses. Provisions for title losses, as a percentage of title operating revenues, were 3.2% and 3.1% for the second quarter and first six months of 2026, compared to 3.6% for both the second quarter and first six months of 2025. Title loss expense increased $0.6 million, or 3%, in the second quarter 2026 and $1.4 million, or 3%, in the first six months of 2026 compared to the same periods in 2025, primarily driven by increased title revenues, which were partially offset by lower title loss resulting from 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.

Current wording

Title losses. Provisions for title losses, as a percentage of title operating revenues, were 3.4% and 3.2% for the third quarter and first nine months of 2026, respectively, compared to 3.0% and 3.4% in the same periods in 2025. Title loss expense in the third quarter and first nine months of 2026 increased $4.0 million, or 20%, and $5.3 million, or 9%, respectively, primarily due to increased title revenues. 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

Total known claims provision in the second quarter 2026 was comparable to the second quarter 2025, while total known claims provision for the first six months of 2026 decreased $10.6 million, or 31%, compared to the same period in 2025, primarily a result of lower reported claims relating to prior policy years. Current year IBNR provisions for the second quarter and first six months of 2026 were comparable to the same periods in 2025, primarily due to our favorable claims experience offsetting the effect of higher title premiums in 2026. As a percentage of title operating revenues, provisions - IBNR for the current policy year were 2.7% for both the second quarter and for the first six months of 2026 compared to 3.1% for both the second quarter and first six months of 2025.

Current wording

Total known claims provision increased $8.8 million, or 42%, in the third quarter 2026, primarily due to higher reported non-large and large claims related to prior policy years, while total known claims provision decreased $1.8 million, or 3%, in the first nine months of 2026, compared to the same periods in 2025. Current year IBNR provisions increased $2.7 million, or 17%, and $3.5 million, or 7%, for the third quarter and first nine months of 2026, respectively, primarily due to an increase in title premiums in 2026. As a percentage of title operating revenues, provisions - IBNR for the current policy year were 2.7% for both the third quarter and first nine months of 2026, compared to 2.4% and 2.8% for the same periods in 2025.

Previous wording

Total claim payments increased $2.2 million, or 13%, in the second quarter 2026 primarily due to higher payments on non-large claims relating to prior year policies and increased $7.6 million, or 21%, in the first six months of 2026, primarily due to higher payments on large claims relating to prior policy years compared to the same periods in 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 $0.9 million, or 4%, and $8.5 million, or 15%, in the third quarter and first nine months of 2026, respectively, compared to the same periods in 2025, primarily due to higher payments on large and non-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

Depreciation and amortization. Total depreciation and amortization expenses in the second quarter and first six months of 2026 increased $2.5 million, or 16%, and $4.0 million, or 13%, respectively, compared to the same periods in 2025, primarily due to increased intangible amortization and depreciation expenses related to our recent MCS acquisition, partially offset by lower amortization expenses resulting from several assets becoming fully amortized in 2026.

Current wording

Depreciation and amortization. Total depreciation and amortization expenses in the third quarter and first nine months of 2026 increased $3.9 million, or 25%, and $7.9 million, or 17%, respectively, compared to the same periods in 2025, primarily due to increased intangible amortization and depreciation expenses related to our recent MCS acquisition, partially offset by lower amortization expenses resulting from several assets becoming fully amortized in 2026.

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 June 30, 2026, our total cash and investments, including amounts reserved pursuant to statutory requirements, aggregated $914.9 million, of which $492.7 million ($277.8 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 September 30, 2026, our total cash and investments, including amounts reserved pursuant to statutory requirements, aggregated $802.1 million, of which $370.7 million ($145.7 million, net of statutory reserve funds) 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 $123.4 million at June 30, 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.

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 $41.8 million at September 30, 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 $504.7 million and $492.0 million at June 30, 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 June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026, our known claims reserve totaled $65.4 million and our estimate of claims that may be reported in the future, under generally accepted accounting principles, totaled $453.8 million. In addition to this, we had cash and investments (at amortized cost and excluding equity method investments) of $221.1 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 $507.8 million and $492.0 million at September 30, 2026 and December 31, 2025, respectively. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $3.7 million and $4.4 million at September 30, 2026 and December 31, 2025, respectively. As of September 30, 2026, our known claims reserve totaled $74.1 million and our estimate of claims that may be reported in the future, under generally accepted accounting principles, totaled $447.4 million. In addition to this, we had cash and investments (at amortized cost and excluding equity method investments) of $204.6 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 $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 either of the first six months of 2026 and 2025.

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 paid $50.0 million of dividends to the parent company during the first nine months of 2025 and none during the first nine months of 2026.

Previous wording

Net cash provided by operations improved by $32.5 million to $56.0 million during the first six months of 2026, from $23.5 million during the same period in 2025, primarily driven by higher net income and timing on payments of accounts payable. 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 provided by operations decreased by $13.5 million to $102.6 million during the first nine months of 2026, from $116.1 million during the same period in 2025, primarily due to higher payments of claims and operating liabilities, partially offset by higher net income. 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 disciplined 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 six months of 2026 and 2025, total proceeds from securities investments sold and matured were $63.4 million and $84.8 million, respectively, while cash used for purchases of securities investments was $71.7 million and $72.2 million, respectively. Additionally, during the first six months of 2026 and 2025, we used cash of $41.9 million and $27.1 million, respectively, for expenditures related to property and equipment and other long-lived assets, while we used net cash of $27.8 million and $8.5 million, respectively, for acquisitions of real estate solutions and 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.

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 nine months of 2026 and 2025, total proceeds from securities investments sold and matured were $90.2 million and $112.3 million, respectively, while cash used for purchases of securities investments was $102.1 million and $100.6 million, respectively. Additionally, during the first nine months of 2026 and 2025, we used cash of $62.9 million and $46.2 million, respectively, for expenditures related to property and equipment and other long-lived assets, while we used net cash of $134.1 million and $38.6 million, respectively, for acquisitions of title and real estate solutions 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 $646.7 million and $1.67 billion, respectively, as of June 30, 2026. At June 30, 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.

Current wording

Financing activities and capital resources. Total debt and stockholders’ equity were $654.9 million and $1.68 billion, respectively, as of September 30, 2026. At September 30, 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

As of June 30, 2026, the outstanding balance of our Senior Notes was $446.4 million, while our line of credit facility had an outstanding balance of $200.0 million, with a remaining borrowing capacity of $97.5 million and an option to increase the line of credit facility by up to $125.0 million. Total interest expense during the first six months of 2026 increased by $5.2 million, or 52%, compared to the same period in 2025, primarily due to the higher outstanding balance on the line of credit facility. During the first six months of 2026 and 2025, payments on notes payable of $2.8 million and $1.1 million, respectively, and notes payable additions of $2.7 million and $1.0 million, respectively, were related to our Section 1031 business, which had an outstanding balance of $0.1 million as of June 30, 2026.

Current wording

As of September 30, 2026, the outstanding balance of our Senior Notes was $446.6 million, while our line of credit facility had an outstanding balance of $208.0 million, with a remaining borrowing capacity of $89.5 million and an option to increase the line of credit facility by up to $125.0 million. Total interest expense during the first nine months of 2026 increased by $7.9 million, or 53%, compared to the same period in 2025, primarily due to the higher outstanding balance on the line of credit facility. During the first nine months of 2026 and 2025, payments on notes payable of $2.8 million and $1.1 million, respectively, and notes payable additions of $2.8 million and $1.0 million, respectively, were related to our Section 1031 business, which had an outstanding balance of $0.2 million as of September 30, 2026.

Previous wording

During the first six months of 2026, we paid total dividends of $32.7 million ($1.05 per common share), compared to total dividends paid of $27.9 million ($1.00 per common share) during the same period in 2025.

Current wording

During the first nine months of 2026, we paid total dividends of $49.7 million ($1.60 per common share), compared to total dividends paid of $42.6 million ($1.53 per common share) during the same period in 2025.

Previous 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 six months of 2026, net unrealized investment losses of $1.8 million, net of taxes, which increased our other comprehensive loss, were primarily related to net decreases in the fair values of our corporate and government bond securities investments which were influenced by higher interest rates. During the first six months of 2025, net unrealized investment gains of $6.4 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 resulting from lower interest rates.

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 nine months of 2026, net unrealized investment losses of $12.5 million, net of taxes, which increased our other comprehensive loss, were primarily related to net decreases in the fair values of our corporate, foreign, and government bond securities investments which were influenced by higher interest rates. 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 resulting from 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 loss, net of taxes, of $4.9 million in the first six months of 2026, primarily due to the depreciation of both the Canadian dollar and British pound relative to the U.S. dollar. In the first six months of 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 $14.4 million.

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 $5.5 million in the first nine months of 2026, primarily due to the depreciation of the Canadian dollar relative to the U.S. dollar. In the first nine months of 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 $9.2 million.