FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-12688
STEWART INFORMATION SERVICES CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 74-1677330
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1980 Post Oak Blvd., Houston TX 77056
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(713) 625-8100
----------------------------------------------------
(Registrant's telephone number, including area code)
-------------------------------------------------------------------------------
(Former name,former address and former fiscal year,if changed since last report)
Indicate by check mark whether the registrant(1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common 13,535,228
Class B Common 1,050,012
<PAGE>
FORM 10-Q
QUARTERLY REPORT
Quarter Ended June 30, 1999
TABLE OF CONTENTS
Item No. Page
- -------- ----
Part I
1. Financial Statements 1
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
3. Quantitative and Qualitative Disclosures About
Market Risk 8
Part II
1. Legal Proceedings 10
5. Other Information 10
6. Exhibits and Reports on Form 8-K 9
Signature 11
<PAGE>
STEWART INFORMATION SERVICES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE QUARTERS AND SIX MONTHS ENDED
JUNE 30, 1999 and 1998
<TABLE>
<CAPTION>
SECOND QUARTER SIX MONTHS
--------------------- --------------------
1999 1998 1999 1998
---------- --------- -------- --------
<S> <C> <C> <C> <C>
($000 Omitted) ($000 Omitted)
Revenues
Title premiums, fees and other revenues 275,117 218,543 502,833 399,527
Real estate information services 16,225 12,131 31,316 23,847
Investment income 4,885 4,502 9,792 8,776
Investment gains - net (134) 263 30 331
--------- -------- -------- --------
296,093 235,439 543,971 432,481
Expenses
Amounts retained by agents 142,262 103,781 254,396 189,691
Employee costs 73,964 63,172 143,463 118,245
Other operating expenses 43,116 34,669 79,577 64,482
Title losses and related claims 11,920 10,024 21,186 18,239
Depreciation and amortization 4,318 3,591 8,193 6,861
Interest 310 396 596 783
Minority interests 1,436 1,527 2,426 2,429
--------- -------- -------- --------
277,326 217,160 509,837 400,730
--------- -------- -------- --------
Earnings before taxes 18,767 18,279 34,134 31,751
Income taxes 7,041 7,021 12,808 11,868
--------- -------- -------- --------
Net earnings 11,726 11,258 21,326 19,883
========= ======== ======== ========
Average number of shares outstanding -
assuming dilution (000) 14,581 14,128 14,461 14,084
Earnings per share - basic (1) 0.81 0.81 1.49 1.43
Earnings per share - diluted (1) 0.80 0.80 1.47 1.41
========= ========= ======== ========
Comprehensive earnings:
Net earnings 11,726 11,258 21,326 19,883
Changes in unrealized investment gains,
net of taxes of $(2,060), $10, $(3,250)
and $(329), respectively (3,825) 17 (6,035) (611)
--------- -------- -------- --------
Comprehensive earnings 7,901 11,275 15,291 19,272
========= ========= ======== ========
</TABLE>
(1) Restated for a two-for-one stock split in May 1999.
-1-
<PAGE>
STEWART INFORMATION SERVICES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
JUNE 30 DEC 31
1999 1998
---------- ----------
<S> <C> <C>
($000 Omitted)
Assets
Cash and cash equivalents 42,241 44,883
Short-term investments 66,460 59,446
Investments - statutory reserve funds 173,088 164,554
Investments - other 62,751 62,758
Receivables 44,161 46,732
Property and equipment 40,391 36,392
Title plants 24,267 23,608
Goodwill 29,149 23,615
Deferred income taxes 12,963 10,633
Other 25,561 25,860
---------- ----------
521,032 498,481
========== ==========
Liabilities
Notes payable 15,920 16,194
Accounts payable and accrued liabilities 39,788 44,578
Estimated title losses 176,931 171,763
Minority interests 6,543 5,503
Contingent liabilities and commitments
Stockholders' equity
Common and Class B Common Stock and
additional paid-in capital 71,137 63,951
Retained earnings 210,619 190,363
Accumulated other comprehensive earnings 94 6,129
---------- -----------
Total stockholders' equity ($19.32 per share at
June 30, 1999) 281,850 260,443
---------- -----------
521,032 498,481
========== ===========
</TABLE>
-2-
<PAGE>
STEWART INFORMATION SERVICES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
($000 Omitted)
Cash provided by operating activities (Note) 31,274 36,937
Investing activities:
Purchases of property and equipment and title plants - net (12,756) (8,533)
Proceeds from investments matured and sold 15,426 24,365
Purchases of investments (37,783) (45,438)
Increases in notes receivable (5,850) (1,541)
Collections on notes receivable 5,114 1,029
Proceeds from sale of equity investment 8,140 0
Cash paid for the acquisition of subsidiaries - net (3,050) (823)
---------- ---------
Cash used by investing activities (30,759) (30,941)
Financing activities:
Dividends paid (1,069) (903)
Distribution to minority interests (1,696) (1,732)
Proceeds from issuance of stock 64 1,893
Proceeds of notes payable 4,129 3,134
Payments on notes payable (4,585) (3,015)
---------- ---------
Cash used by financing activities (3,157) (623)
---------- ---------
(Decrease) increase in cash and cash equivalents (2,642) 5,373
========== ==========
</TABLE>
NOTE: Reconciliation of net earnings to the above amounts -
<TABLE>
<S> <C> <C>
Net earnings 21,326 19,883
Add (deduct):
Depreciation and amortization 8,193 6,861
Provision for title losses in excess of payments 4,618 7,169
Provision for uncollectible amounts - net (300) (850)
Decrease (increase) in accounts receivable - net 3,833 (3,042)
(Decrease) increase in accounts payable and
accrued liabilities - net (6,603) 4,850
Minority interest expense 2,426 2,429
Equity in net earnings of investees (559) 15
Realized investment gains - net (30) (331)
Gain on sale of equity investment (1,145) 0
Stock bonuses 588 342
Increase in other assets (1,743) (785)
Other - net 670 396
---------- ---------
Cash provided by operating activities 31,274 36,937
========== =========
</TABLE>
-3-
<PAGE>
STEWART INFORMATION SERVICES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Interim Financial Statements
The financial information contained in this report for the three and six month
periods ended June 30, 1999 and 1998, and as of June 30, 1999, is unaudited. In
the opinion of management, all adjustments necessary for a fair presentation of
this information for all unaudited periods, consisting only of normal recurring
accruals, have been made. The results of operations for the interim periods are
not necessarily indicative of results for a full year.
Certain amounts in the 1998 consolidated financial statements have been
reclassified for comparative purposes. Net earnings, as previously reported,
were not affected.
Note 2: Segment Information
The Company's two reportable segments are title and real estate information.
Selected financial information related to these segments follows:
<TABLE>
<CAPTION>
Real Estate
Title Information Total
----- ----------- -----
($000 Omitted)
<S> <C> <C> <C>
Revenues:
- ---------
Three months ended
6/30/99 279,868 16,225 296,093
6/30/98 223,308 12,131 235,439
Six months ended
6/30/99 512,655 31,316 543,971
6/30/98 408,634 23,847 432,481
Pretax Earnings:
- ----------------
Three months ended
6/30/99 18,071 696 18,767
6/30/98 17,360 919 18,279
Six months ended
6/30/99 31,876 2,258 34,134
6/30/98 30,195 1,556 31,751
Identifiable Assets:
- --------------------
6/30/99 481,068 39,964 521,032
12/31/98 463,030 35,451 498,481
</TABLE>
Note 3: Earnings Per Share
The Company's basic earnings per share figures were calculated by dividing net
earnings by the weighted average number of shares of Common Stock and Class B
Common Stock outstanding during the reporting period. The only potentially
dilutive effect on earnings per share for the Company related to its stock
option plans.
In calculating the effect of the options and determining a figure for diluted
earnings per share, the average number of shares used in calculating basic
earnings per share was increased by 124,000 and 158,000 for the three month
periods ending June 30, 1999 and 1998, respectively and 138,000 and 182,000 for
the six month periods ending June 30, 1999 and 1998, respectively.
-4-
<PAGE>
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
The Company's two segments of operations are land titles and real estate
information. In general, the principal factors that contribute to increases in
the Company's operating revenues include declining mortgage interest rates
(which usually increase home sales and refinancing transactions), rising home
prices, higher premium rates, increased market share, additional revenues from
new offices and increased revenues from commercial transactions. Although
relatively few in number, large commercial transactions typically yield higher
premiums.
Mortgage interest rates were slightly lower, on the average, for the first six
months of 1999 when compared to the same period in 1998. The monthly average
rate in the first half of 1999 was 7.05 percent compared to 7.07 percent in
1998. Rates dipped lower in the second half of 1998 but have risen steadily in
1999. Rates were just over 8.0 percent at the end of July 1999.
Higher interest rates trimmed refinance activity as reported in the Mortgage
Banker's Association weekly survey. Refinance activity represented an average 43
percent of all loan applications in the second quarter of 1998, declining to 32
percent in the second quarter of 1999. Higher rates in July 1999 saw refinance
applications drop to 23 percent of market volume.
The housing market was strong during the first six months of 1999. Sales of
existing single-family homes reached an all-time record at an annual rate of 5.5
million units in June 1999. This was up from a 4.7 million unit pace in June
1998.
A comparison of the results of operations of the Company for the first six
months of 1999 with the first six months of 1998 follows.
REVENUES
Revenues from title premiums and fees increased $103.3 million, or 25.9%, from a
year ago. Slightly lower mortgage interest rates in the early part of 1999
compared to the same period a year ago increased real estate transactions.
Strong order counts in the last few months of 1998 and a healthy real estate
market in the first half of 1999 generated additional revenues.
The number of closings handled by the Company increased 7.2%. Closings increased
in Texas, Nevada, California and most other states. The average revenue per
closing increased in 1999 due, in part, to a fewer number of refinancings with
their lower premiums and higher average home prices in 1999. Increases in
revenues from agents contributed to higher revenues in 1999.
Other revenues in the first six months of 1999 included a $1.1 million pretax
gain resulting from a settlement of a lawsuit and a related sale of an equity
ownership in a title agency. The Company began to open its own offices in the
related markets during the second quarter of 1999.
Real estate information revenues were $31.3 million in 1999 and $23.8 million in
1998. The increase was primarily due to a favorable real estate environment and
new businesses started or acquired in 1998. Real estate information profits were
reduced by a $1.2 million pretax charge resulting from a settlement of a lawsuit
during the second quarter of 1999.
Investment income increased 11.6% in 1999 due primarily to an increase in the
average balances invested.
EXPENSES
Amounts retained by agents increased $64.7 million, or 34.1%, over the
comparable period in 1998. The percentage of retention by agents to the amounts
of revenues from agents was 80.5% and 80.0% for the six months ended June 30,
1999 and June 30, 1998, respectively.
Employee expenses increased $25.2 million, or 21.3%, in 1999 primarily because
of a higher average number of employees during the first six months of 1999
compared to a year ago and increased average rates of compensation.
The Company continued to maintain higher staff levels in comparison with a year
ago. Increases were in areas of automating services rendered to customers and
improving its own processes, real estate information services that are being
developed and sold to customers and the expansion of its national marketing
efforts.
-5-
<PAGE>
The Company believes the development and sale of new products and services is
important to its future. Through automated operating processes, the Company
expects to add customer services and revenues while reducing operating expenses
and title losses in the future.
Other operating expenses increased by $15.1 million, or 23.4%, primarily because
of the increase in transaction volume. Expenses that increased include REI
expenses, rent, business promotion and expenses of new offices. Other operating
expenses also include premium taxes, title plant expenses, supplies, computer
costs, telephone, travel, policy forms, search fees and delivery costs. Most of
these expenses follow, to varying degrees, the changes in transaction volume and
revenues.
Provisions for title losses and related claims were up $2.9 million, or 16.2%,
in 1999. As a percentage of title premiums, fees and related revenues, the
provision in the first six months of 1999 decreased to 4.2% versus 4.6% in 1998.
The continued improvement in industry trends in claims and the Company's
improved experience in claims have led to lower loss ratios. An overall increase
in refinancing transactions in recent years, which results in lower loss
exposure, also reduced loss ratios.
The provision for income taxes represented effective tax rates of 37.5% and
37.4% in 1999 and 1998, respectively.
A comparison of the results of operations of the Company for the second quarter
of 1999 with the second quarter of 1998 follows.
REVENUES
Revenues from title premiums and fees increased $56.6 million, or 25.9%, from a
year ago. Mortgage interest rates, on average, were slightly lower in the early
part of 1999 than in the same period a year ago. Strong order counts in the last
few months of 1998 and a good real estate market in the first half of 1999
generated additional revenues.
The number of closings handled by the Company decreased slightly. Closings
decreased in California, Colorado, Arizona and other states. The average revenue
per closing increased in 1999 due, in part, to a fewer number of refinancings
with their lower premiums. Increases in revenues from agents contributed to
higher revenues in 1999.
Real estate information revenues were $16.2 million in 1999 and $12.1 million in
1998. The increase was primarily due to a favorable real estate environment and
new businesses started or acquired in 1998. Real estate information profits were
reduced by a $1.2 million pretax charge resulting from a settlement of a lawsuit
during the second quarter of 1999.
Investment income increased 8.5% in 1999 due primarily to an increase in the
average balances invested.
EXPENSES
Amounts retained by agents increased $38.5 million, or 37.1%, over the
comparable period in 1998. The percentage of retention by agents to the amounts
of revenues from agents was 80.2% and 80.1% for the three months ended June 30,
1999 and June 30, 1998, respectively.
Employee expenses increased $10.8 million, or 17.1%, in 1999 primarily because
of a higher average number of employees during the first quarter of 1999
compared to a year ago.
Other operating expenses increased by $8.4 million, or 24.4%, primarily because
of the increase in REI expenses. Other expenses that increased include rent,
business promotion, title plant expenses, supplies, computer costs, telephone,
travel, premium taxes, policy forms, search fees and delivery costs. Most of
these expenses follow, to varying degrees, the changes in transaction volume and
revenues.
Provisions for title losses and related claims were up $1.9 million, or 18.9% in
1999. As a percentage of title premiums, fees and related revenues, the
provision in the second quarter of 1999 decreased to 4.3% versus 4.6% in 1998.
The continued improvement in industry trends in claims and the Company's
improved experience in claims have led to lower loss ratios. An overall increase
in refinancing transactions in recent years, which results in lower loss
exposure, also reduced loss ratios.
The provision for income taxes represented effective tax rates of 37.5% and
38.4% in 1999 and 1998, respectively.
-6-
<PAGE>
YEAR 2000 ISSUE
Information technology is a crucial part of the Company's business. The Company
recognizes the technological challenges associated with the Year 2000 Issue
("Y2K"). It has established a formal compliance plan to address these challenges
and a Y2K Team to carry out this plan. The plan includes several distinct
phases: (1) assessment, (2) remediation, (3) testing and (4) implementation. The
progress of the work of the Y2K Team is monitored by the Company's senior
management and the audit committee of the Company's board of directors.
Computer software is used in the title and real estate information segments of
the Company's business. The uses of software in the title segment include
searching and examining titles, closing transactions, accounting for agent
policies and claims. In the real estate information segment, software is used in
providing mortgage services, such as flood determinations, appraisals and
assignments.
Most of this software was developed by the Company in recent years with Y2K
issues in mind. The Company has substantially completed its assessment,
remediation and testing of this software. Implementation is being carried out as
remediation is completed, with all implementation expected to be completed by
the third quarter of 1999.
In addition to its work on internally-developed computer software, the Company
has conducted an inventory of its systems worldwide. This inventory includes
software and hardware acquired from third parties for use by the Company. The
inventory also includes critical non-information technology systems which may
house non-compliant, imbedded technology, such as fax machines, photocopiers,
telephone facilities and other common devices. Assessment of these systems and
any necessary remediation was substantially completed during the second quarter
of 1999. Mission-critical systems were given high priority.
Certain subsidiaries that have been acquired by the Company and still operate
with different systems from the Company's have been given high priority under
the Company's Y2K plan. All phases of Y2K compliance for these subsidiaries was
substantially completed during the second quarter of 1999.
In addition to addressing the Company's own systems, as described above, the Y2K
Team has assessed, to the extent practicable, the state of readiness of the
systems of other mission-critical entities with which it does business. These
include independent title insurance agents and other business partners, such as
county courthouses and lenders, whose condition or operational capability is
important to the Company. Failure by these third parties to resolve adequately
their Y2K problems could have a material adverse effect on the Company's
operations.
The Company believes its success in being Y2K compliant will not be conclusively
known until the year 2000 is actually reached. Failure by one or more of the
Company's own systems could result in lost revenues and additional expenses
required to carry out manual processing of transactions. The magnitude of the
failure of external forces on the business of the Company cannot be predicted.
Failures by the telecommunications industry, banking institutions and others
could have far-reaching, materially adverse effects on the Company, the title
insurance industry and the entire economy.
The Company expects to complete its Y2K program in a timely manner. However, the
Company believes that it is not possible to determine with certainty that all
Y2K issues have been identified or corrected. The number of devices that could
be affected and the interactions among these devices are simply too numerous. In
addition, the Company cannot accurately predict how many failures related to the
Y2K problem will occur or the severity, duration or financial consequences of
such failures.
The Company has hired an outside Y2K consultant to assist the Company in meeting
its goals and in developing contingency plans to define and address the
worst-case scenario likely to be faced. The contingency plan is expected to be
completed and in place in the third quarter of 1999.
The Company has spent approximately $2.3 million from 1997 through the second
quarter of 1999 directly related to assessing, remediating and testing its
information technology systems. These amounts have been funded from operations.
The Company currently estimates that the total cost of its Y2K compliance
program will not exceed $3.5 million. A significant portion of the remaining
costs are expected to be incurred during the third quarter of 1999.
This entire section ("Year 2000 Issue") is hereby designated a "Year 2000
Readiness Disclosure", as defined in the Year 2000 Information and Readiness
Disclosure Act.
-7-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations represent the primary source of financing for the
Company, but this may be supplemented by bank borrowings. The capital resources
of the Company and the present debt-to-equity relationship are considered
satisfactory.
During the first six months of 1999, the Company financed a portion of various
acquisitions through the issuance of Common Stock totaling $6.8 million.
Acquisitions during the first six months of 1999 have resulted in an increase in
goodwill of $6.3 million.
FORWARD LOOKING STATEMENTS
All statements included in this report, other than statements of historical
facts, which address activities, events or developments that the Company expects
or anticipates will or may occur in the future are forward-looking statements.
Such forward-looking statements are subject to risks and uncertainties
including, among other things, changes in mortgage interest rates, employment
levels, actions of competitors, changes in real estate markets, general economic
conditions and legislation (primarily legislation related to insurance) and
other risks and uncertainties discussed in the Company's filings with the
Securities and Exchange Commission.
Item 3: Quantitative and Qualitative Disclosures About Market Risk There have
been no material changes in the Company's investment strategies, types of
financial instruments held or the risks associated with such instruments which
would materially alter the market risk disclosures made in the Company's Annual
Statement on Form 10-K for the year ended December 31, 1998.
-8-
<PAGE>
PART II
Page
----------
Item 1. Legal Proceedings 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K
(a) Index to exhibits
(b) There were no reports on Form 8-K filed during the
quarter ended June 30, 1999.
-9-
<PAGE>
ITEM 1. LEGAL PROCEEDINGS
The Registrant is a party to routine lawsuits incidental to its
business, most of which involve disputed policy claims. In many of these suits,
the plaintiff seeks exemplary or treble damages in excess of policy limits based
on the alleged malfeasance of an issuing agent of the Registrant. The Registrant
does not expect that any of these proceedings will have a material adverse
effect on its financial condition.
ITEM 5. OTHER INFORMATION
On March 15, the Registrant's Board of Directors approved a two-for-one
split of the Registrant's Common Stock, $1.00 par value ("Common Stock"), and
Class B Common Stock, $1.00 par value, which was effected in the form of a stock
dividend. Each stockholder of record of the Registrant at the close of business
on May 7, 1999 received one additional share for each share owned on that date.
The stock dividend was paid on May 21, 1999.
-10-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Stewart Information Services Corporation
----------------------------------------
(Registrant)
August 12, 1999
- ----------------
Date
/S/ MAX CRISP
-----------------------------------------------
Max Crisp
(Vice President-Finance, Secretary-Treasurer,
Director and Principal Financial and
Accounting Officer)
-11-
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4. - Rights of Common and Class B Common Stockholders
27.0 - Financial data schedule
28.2 - Details of investments as reported in the
Quarterly Report to Shareholders
EXHIBIT 4
STEWART INFORMATION SERVICES CORPORATION
RIGHTS OF COMMON AND CLASS B COMMON STOCKHOLDERS
June 30, 1999
Common and Class B Common stockholders have the same rights, except (1)
no cash dividend may be paid on Class B Common Stock and (2) the two classes of
stock are voted separately in electing directors. A provision in the by-laws
requires an affirmative vote of at least two-thirds of the directors to approve
any proposal which may come before the directors. This by-law provision cannot
be changed without majority vote of each class of stock.
Common stockholders, with cumulative voting rights, may elect five or
more of the nine directors. Class B Common stockholders may, with no cumulative
voting rights, elect four directors, if 350,000 or more shares of Class B Common
stock are outstanding; three directors, if between 200,000 and 350,000 shares of
Class B Common Stock are outstanding; if less than 200,000 shares of Class B
Common Stock are outstanding, the Common Stock and the Class B Common Stock
shall be voted as a single class upon all matters, with the right to cumulate
votes for the election of directors.
No change in the Certificate of Incorporation which would affect the
Common Stock and the Class B Common Stock unequally shall be made without the
affirmative vote of at least a majority of the outstanding shares of each class,
voting as a class.
Class B Common Stock may, at any time, be converted by its holders
into Common Stock on a share-for-share basis. Such conversion is mandatory
on any transfer to a person not a lineal descendant (or spouse, trustee, etc.
of such descendant) of William H. Stewart.
Exhibit 28.2
STEWART INFORMATION SERVICES CORPORATION
DETAILS OF INVESTMENTS
JUNE 30, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
JUNE 30 DEC 31
1999 1998
--------- --------
($000 Omitted)
<S> <C> <C>
Investments, at market, partially restricted:
Short-term investments 66,460 59,446
U. S. Treasury and agency obliga 20,316 24,086
Municipal bonds 136,670 133,533
Mortgage-backed securities 8,786 4,233
Corporate bonds 64,323 59,796
Equity securities 5,744 5,664
--------- --------
TOTAL INVESTMENTS 302,299 286,758
========= ========
</TABLE>
NOTE: The total appears as the sum of three amounts on the condensed
consolidated balance sheets presented on page 2: (1) `short-term investments',
(2) `investments - statutory reserve funds' and (3) `investments - other'.
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
STEWART INFORMATION SERVICES CORPORATION
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF JUNE 30, 1999 AND THE RELATED STATEMENT OF EARNINGS FOR THE SIX
MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<DEBT-HELD-FOR-SALE> 235,839
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 302,299 <F1>
<CASH> 42,241
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 521,032
<POLICY-LOSSES> 176,931
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 15,920
<COMMON> 7,293
0
0
<OTHER-SE> 274,557
<TOTAL-LIABILITY-AND-EQUITY> 521,032
502,833
<INVESTMENT-INCOME> 9,792
<INVESTMENT-GAINS> 30
<OTHER-INCOME> 31,316
<BENEFITS> 21,186
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 34,134
<INCOME-TAX> 12,808
<INCOME-CONTINUING> 21,326
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,326
<EPS-BASIC> 1.49
<EPS-DILUTED> 1.47
<RESERVE-OPEN> 171,763
<PROVISION-CURRENT> 19,790 <F2>
<PROVISION-PRIOR> 1,946
<PAYMENTS-CURRENT> (2,427)
<PAYMENTS-PRIOR> (14,141)
<RESERVE-CLOSE> 176,931
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1> Includes short-term investments.
<F2> Includes reserve balance increase of $550 from the acquisition of an
existing underwriter.
</FN>
</TABLE>
