falsedesktopSTC2020-09-30000009434420000019{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Delaware\t\t74-1677330\n(State or other jurisdiction of incorporation or organization)\t\t(I.R.S. Employer Identification No.)\n1360 Post Oak Blvd.\tSuite 100\t\nHouston\tTexas\t77056\n(Address of principal executive offices)\t\t(Zip Code)\n", "q10k_tbl_1": "☑\tLarge accelerated filer\t☐\tNon-accelerated filer\t☐\tEmerging growth company\n☐\tAccelerated filer\t☐\tSmaller reporting company\t\t\n", "q10k_tbl_2": "Item\t\tPage\n\tPART I - FINANCIAL INFORMATION\t\n1.\tFinancial Statements\t3\n2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t18\n3.\tQuantitative and Qualitative Disclosures About Market Risk\t29\n4.\tControls and Procedures\t29\n\tPART II - OTHER INFORMATION\t\n1.\tLegal Proceedings\t30\n1A.\tRisk Factors\t30\n2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t30\n5.\tOther Information\t30\n6.\tExhibits\t30\n\tSignature\t31\n", "q10k_tbl_3": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t($000 omitted except per share)\t\t\t\nRevenues\t\t\t\t\nTitle revenues:\t\t\t\t\nDirect operations\t280114\t245068\t696611\t634198\nAgency operations\t282605\t254155\t802022\t699835\nAncillary services\t27957\t8628\t44573\t30708\nOperating revenues\t590676\t507851\t1543206\t1364741\nInvestment income\t5027\t4752\t14530\t14631\nNet realized and unrealized (losses) gains\t(7)\t46905\t(6035)\t50730\n\t595696\t559508\t1551701\t1430102\nExpenses\t\t\t\t\nAmounts retained by agencies\t231051\t208973\t659138\t576559\nEmployee costs\t155638\t143815\t428817\t412967\nOther operating expenses\t98531\t87826\t245003\t251030\nTitle losses and related claims\t28427\t21059\t68600\t55532\nDepreciation and amortization\t5144\t5694\t13436\t17458\nInterest\t562\t1080\t2075\t3369\n\t519353\t468447\t1417069\t1316915\nIncome before taxes and noncontrolling interests\t76343\t91061\t134632\t113187\nIncome tax expense\t(16058)\t(21393)\t(29293)\t(25978)\nNet income\t60285\t69668\t105339\t87209\nLess net income attributable to noncontrolling interests\t4376\t3560\t10107\t8561\nNet income attributable to Stewart\t55909\t66108\t95232\t78648\nNet income\t60285\t69668\t105339\t87209\nOther comprehensive income (loss) net of taxes:\t\t\t\t\nForeign currency translation adjustments\t3844\t(5135)\t(3404)\t1928\nChange in net unrealized gains and losses on investments\t920\t3603\t15055\t17985\nReclassification adjustment for realized gains and losses on investments\t(175)\t(92)\t(276)\t120\nOther comprehensive income (loss) net of taxes:\t4589\t(1624)\t11375\t20033\nComprehensive income\t64874\t68044\t116714\t107242\nLess net income attributable to noncontrolling interests\t4376\t3560\t10107\t8561\nComprehensive income attributable to Stewart\t60498\t64484\t106607\t98681\nBasic average shares outstanding (000)\t25148\t23616\t24151\t23608\nBasic earnings per share attributable to Stewart\t2.22\t2.80\t3.94\t3.33\nDiluted average shares outstanding (000)\t25297\t23773\t24256\t23780\nDiluted earnings per share attributable to Stewart\t2.21\t2.78\t3.93\t3.31\n", "q10k_tbl_4": "\tAs of September 30 2020 (Unaudited)\tAs of December 31 2019\n\t($000 omitted)\t\nAssets\t\t\nCash and cash equivalents\t381560\t330609\nShort-term investments\t21288\t23527\nInvestments in debt and equity securities at fair value\t650599\t645039\nReceivables:\t\t\nPremiums from agencies\t32749\t26405\nTrade and other\t47287\t45962\nIncome taxes\t2110\t1641\nNotes\t1591\t2464\nAllowance for uncollectible amounts\t(4456)\t(4469)\n\t79281\t72003\nProperty and equipment:\t\t\nLand\t2964\t3009\nBuildings\t22423\t20519\nFurniture and equipment\t174079\t178416\nAccumulated depreciation\t(148490)\t(151483)\n\t50976\t50461\nOperating lease assets\t110038\t99028\nTitle plants at cost\t72850\t72627\nInvestments on equity method basis\t6851\t6169\nGoodwill\t382235\t248890\nIntangible assets net of amortization\t22002\t4623\nDeferred tax assets\t4451\t4407\nOther assets\t38058\t35402\n\t1820189\t1592785\nLiabilities\t\t\nNotes payable\t101256\t110632\nAccounts payable and accrued liabilities\t143207\t126779\nOperating lease liabilities\t122475\t113843\nEstimated title losses\t466812\t459053\nDeferred tax liabilities\t35570\t28719\n\t869320\t839026\nContingent liabilities and commitments\t\t\nStockholders' equity\t\t\nCommon Stock ($1 par value) and additional paid-in capital\t300648\t188279\nRetained earnings\t637223\t564392\nAccumulated other comprehensive income (loss):\t\t\nForeign currency translation adjustments\t(16430)\t(13027)\nNet unrealized gains on debt securities investments\t25106\t10328\nTreasury stock - 352161 common shares at cost\t(2666)\t(2666)\nStockholders' equity attributable to Stewart\t943881\t747306\nNoncontrolling interests\t6988\t6453\nTotal stockholders' equity (26719342 and 23709407 shares outstanding)\t950869\t753759\n\t1820189\t1592785\n", "q10k_tbl_5": "\tNine Months Ended September 30\t\n\t2020\t2019\n\t($000 omitted)\t\nReconciliation of net income to cash provided by operating activities:\t\t\nNet income\t105339\t87209\nAdd (deduct):\t\t\nDepreciation and amortization\t13436\t17458\nProvision for bad debt\t363\t889\nNet realized and unrealized losses (gains)\t6035\t(730)\nAmortization of net premium on debt securities investments\t3280\t3790\nPayments for title losses less than (in excess of) provisions\t9615\t(11266)\nAdjustment for insurance recoveries of title losses\t(73)\t175\nIncrease in receivables - net\t(4290)\t(8838)\n(Increase) decrease in other assets - net\t(1702)\t2910\nDecrease in accounts payable and other liabilities - net\t1301\t6753\nChange in net deferred income taxes\t3576\t5563\nNet income from equity investees\t(2385)\t(1996)\nDividends received from equity investees\t2499\t1964\nStock-based compensation expense\t4234\t3380\nOther - net\t(367)\t28\nCash provided by operating activities\t140861\t107289\nInvesting activities:\t\t\nProceeds from sales of investments in securities\t25772\t20899\nProceeds from matured investments in debt securities\t46677\t44685\nPurchases of investments in securities\t(75487)\t(2187)\nNet sales (purchases) of short-term investments\t2431\t(193)\nPurchases of property and equipment and real estate - net\t(10492)\t(11957)\nCash paid for acquisition of businesses\t(146518)\t0\nOther - net\t1524\t2111\nCash (used) provided by investing activities\t(156093)\t53358\nFinancing activities:\t\t\nProceeds from notes payable\t2361\t23514\nPayments on notes payable\t(11737)\t(26179)\nDistributions to noncontrolling interests\t(9572)\t(8578)\nIssuance of new Common Stock\t108961\t0\nRepurchases of Common Stock\t(826)\t(481)\nCash dividends paid\t(22214)\t(21257)\nOther - net\t(311)\t25\nCash provided (used) by financing activities\t66662\t(32956)\nEffects of changes in foreign currency exchange rates\t(479)\t1202\nIncrease in cash and cash equivalents\t50951\t128893\nCash and cash equivalents at beginning of period\t330609\t192067\nCash and cash equivalents at end of period\t381560\t320960\n", "q10k_tbl_6": "\tCommon Stock\tAdditional paid-in capital\tRetained earnings\tAccumulated other comprehensive (loss) income\tTreasury stock\tNoncontrolling interests\tTotal\n\t($000 omitted)\t\t\t\t\t\t\nNine Months Ended September 30 2020\t\t\t\t\t\t\t\nBalance at December 31 2019\t24062\t164217\t564392\t(2699)\t(2666)\t6453\t753759\nNet income attributable to Stewart\t0\t0\t95232\t0\t0\t0\t95232\nDividends on Common Stock ($0.90 per share)\t0\t0\t(22401)\t0\t0\t0\t(22401)\nIssuance of Common Stock\t3026\t105935\t0\t0\t0\t0\t108961\nStock-based compensation\t4\t4230\t0\t0\t0\t0\t4234\nStock repurchases\t(20)\t(806)\t0\t0\t0\t0\t(826)\nChange in net unrealized gains and losses on investments net of taxes\t0\t0\t0\t15055\t0\t0\t15055\nReclassification adjustment for realized gains and losses on investments net of taxes\t0\t0\t0\t(276)\t0\t0\t(276)\nForeign currency translation adjustments net of taxes\t0\t0\t0\t(3404)\t0\t0\t(3404)\nNet income attributable to noncontrolling interests\t0\t0\t0\t0\t0\t10107\t10107\nDistributions to noncontrolling interests\t0\t0\t0\t0\t0\t(9572)\t(9572)\nBalance at September 30 2020\t27072\t273576\t637223\t8676\t(2666)\t6988\t950869\nNine Months Ended September 30 2019\t\t\t\t\t\t\t\nBalance at December 31 2018\t24072\t162642\t514248\t(24771)\t(2666)\t6312\t679837\nNet income attributable to Stewart\t0\t0\t78648\t0\t0\t0\t78648\nDividends on Common Stock ($0.90 per share)\t0\t0\t(21506)\t0\t0\t0\t(21506)\nStock-based compensation\t4\t3376\t0\t0\t0\t0\t3380\nStock repurchases\t(11)\t(470)\t0\t0\t0\t0\t(481)\nChange in net unrealized gains and losses on investments net of taxes\t0\t0\t0\t17985\t0\t0\t17985\nReclassification adjustment for realized gains and losses on investments net of taxes net of taxes\t0\t0\t0\t120\t0\t0\t120\nForeign currency translation adjustments net of taxes\t0\t0\t0\t1928\t0\t0\t1928\nNet income attributable to noncontrolling interests\t0\t0\t0\t0\t0\t8561\t8561\nDistributions to noncontrolling interests\t0\t0\t0\t0\t0\t(8578)\t(8578)\nNet effect of other changes in ownership\t0\t0\t0\t0\t0\t(10)\t(10)\nBalance at September 30 2019\t24065\t165548\t571390\t(4738)\t(2666)\t6285\t759884\n", "q10k_tbl_7": "\tCommon Stock\tAdditional paid-in capital\tRetained earnings\tAccumulated other comprehensive income (loss)\tTreasury stock\tNoncontrolling interests\tTotal\n\t($000 omitted)\t\t\t\t\t\t\nThree Months Ended September 30 2020\t\t\t\t\t\t\t\nBalances at June 30 2020\t24052\t166208\t589424\t4087\t(2666)\t6227\t787332\nNet income attributable to Stewart\t0\t0\t55909\t0\t0\t0\t55909\nDividends on Common Stock ($0.30 per share)\t0\t0\t(8110)\t0\t0\t0\t(8110)\nIssuance of Common Stock\t3026\t105935\t0\t0\t0\t0\t108961\nStock-based compensation\t2\t1783\t0\t0\t0\t0\t1785\nStock repurchases\t(8)\t(350)\t0\t0\t0\t0\t(358)\nChange in net unrealized gains and losses on investments net of taxes\t0\t0\t0\t920\t0\t0\t920\nReclassification adjustment for realized gains and losses on investments net of taxes\t0\t0\t0\t(175)\t0\t0\t(175)\nForeign currency translation adjustments net of taxes\t0\t0\t0\t3844\t0\t0\t3844\nNet income attributable to noncontrolling interests\t0\t0\t0\t0\t0\t4376\t4376\nDistributions to noncontrolling interests\t0\t0\t0\t0\t0\t(3615)\t(3615)\nBalance at September 30 2020\t27072\t273576\t637223\t8676\t(2666)\t6988\t950869\nThree Months Ended September 30 2019\t\t\t\t\t\t\t\nBalances at June 30 2019\t24065\t164235\t512467\t(3114)\t(2666)\t5840\t700827\nNet income attributable to Stewart\t0\t0\t66108\t0\t0\t0\t66108\nDividends on Common Stock ($0.30 per share)\t0\t0\t(7185)\t0\t0\t0\t(7185)\nStock-based compensation\t0\t1323\t0\t0\t0\t0\t1323\nStock repurchases\t0\t(10)\t0\t0\t0\t0\t(10)\nChange in net unrealized gains and losses on investments net of taxes\t0\t0\t0\t3603\t0\t0\t3603\nReclassification adjustment for realized gains and losses on investments net of taxes net of taxes\t0\t0\t0\t(92)\t0\t0\t(92)\nForeign currency translation adjustments net of taxes\t0\t0\t0\t(5135)\t0\t0\t(5135)\nNet income attributable to noncontrolling interests\t0\t0\t0\t0\t0\t3560\t3560\nDistributions to noncontrolling interests\t0\t0\t0\t0\t0\t(3091)\t(3091)\nNet effect of other changes in ownership\t0\t0\t0\t0\t0\t(24)\t(24)\nBalance at September 30 2019\t24065\t165548\t571390\t(4738)\t(2666)\t6285\t759884\n", "q10k_tbl_8": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t($000 omitted)\t\t\t\nTitle insurance premiums:\t\t\t\t\nDirect\t190794\t174635\t478822\t448920\nAgency\t282605\t254155\t802022\t699835\nEscrow fees\t53384\t38666\t127903\t100570\nSearch abstract and valuation services\t42627\t20922\t81533\t63109\nOther revenues\t21266\t19473\t52926\t52307\n\t590676\t507851\t1543206\t1364741\n", "q10k_tbl_9": "\tSeptember 30 2020\tDecember 31 2019\n\t($000 omitted)\t\nInvestments in:\t\t\nDebt securities\t617895\t605721\nEquity securities\t32704\t39318\n\t650599\t645039\n", "q10k_tbl_10": "\tSeptember 30 2020\t\tDecember 31 2019\t\n\tAmortized costs\tFair values\tAmortized costs\tFair values\n\t($000 omitted)\t\t\t\nMunicipal\t46397\t48952\t52176\t53823\nCorporate\t301297\t320348\t299074\t309142\nForeign\t231859\t241969\t234734\t236073\nU.S. Treasury Bonds\t6562\t6626\t6664\t6683\n\t586115\t617895\t592648\t605721\n", "q10k_tbl_11": "\tSeptember 30 2020\t\tDecember 31 2019\t\n\tGains\tLosses\tGains\tLosses\n\t($000 omitted)\t\t\t\nMunicipal\t2555\t0\t1649\t2\nCorporate\t19396\t345\t10091\t23\nForeign\t10131\t21\t2362\t1023\nU.S. Treasury Bonds\t88\t24\t60\t41\n\t32170\t390\t14162\t1089\n", "q10k_tbl_12": "\tAmortized costs\tFair values\n\t($000 omitted)\t\nIn one year or less\t68394\t69164\nAfter one year through five years\t299977\t313410\nAfter five years through ten years\t186766\t201134\nAfter ten years\t30978\t34187\n\t586115\t617895\n", "q10k_tbl_13": "\tLess than 12 months\t\tMore than 12 months\t\tTotal\t\n\tLosses\tFair values\tLosses\tFair values\tLosses\tFair values\n\t($000 omitted)\t\t\t\t\t\nMunicipal\t0\t0\t0\t0\t0\t0\nCorporate\t345\t22781\t0\t0\t345\t22781\nForeign\t1\t4106\t20\t240\t21\t4346\nU.S. Treasury Bonds\t0\t0\t24\t1022\t24\t1022\n\t346\t26887\t44\t1262\t390\t28149\n", "q10k_tbl_14": "\tLess than 12 months\t\tMore than 12 months\t\tTotal\t\n\tLosses\tFair values\tLosses\tFair values\tLosses\tFair values\n\t($000 omitted)\t\t\t\t\t\nMunicipal\t2\t53\t0\t0\t2\t53\nCorporate\t23\t7420\t0\t0\t23\t7420\nForeign\t318\t92108\t705\t55875\t1023\t147983\nU.S. Treasury Bonds\t0\t0\t41\t2215\t41\t2215\n\t343\t99581\t746\t58090\t1089\t157671\n", "q10k_tbl_15": "\tLevel 1\tLevel 2\tFair value measurements\n\t($000 omitted)\t\t\nInvestments in securities:\t\t\t\nDebt securities:\t\t\t\nMunicipal\t0\t48952\t48952\nCorporate\t0\t320348\t320348\nForeign\t0\t241969\t241969\nU.S. Treasury Bonds\t0\t6626\t6626\nEquity securities\t32704\t0\t32704\n\t32704\t617895\t650599\n", "q10k_tbl_16": "\tLevel 1\tLevel 2\tFair value measurements\n\t($000 omitted)\t\t\nInvestments in securities:\t\t\t\nDebt securities:\t\t\t\nMunicipal\t0\t53823\t53823\nCorporate\t0\t309142\t309142\nForeign\t0\t236073\t236073\nU.S. Treasury Bonds\t0\t6683\t6683\nEquity securities\t39318\t0\t39318\n\t39318\t605721\t645039\n", "q10k_tbl_17": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t($000 omitted)\t\t\t\nRealized gains\t241\t50237\t1749\t51190\nRealized losses\t(209)\t(3038)\t(1556)\t(3402)\nNet unrealized investment (losses) gains recognized on equity securities still held at September 30\t(39)\t(294)\t(6228)\t2942\n\t(7)\t46905\t(6035)\t50730\n", "q10k_tbl_18": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t($000 omitted)\t\t\t\nNet investment (losses) gains recognized on equity securities during the period\t(41)\t(171)\t(7136)\t3222\nLess: Net realized (losses) gains on equity securities sold during the period\t(2)\t123\t(908)\t280\nNet unrealized investment (losses) gains recognized on equity securities still held at September 30\t(39)\t(294)\t(6228)\t2942\n", "q10k_tbl_19": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t($000 omitted)\t\t\t\nProceeds from sales of debt securities\t10218\t10227\t24990\t19279\nProceeds from sales of equity securities\t56\t720\t782\t1620\nTotal proceeds from sales of investments in securities\t10274\t10947\t25772\t20899\n", "q10k_tbl_20": "\tTitle\tAncillary Services and Corporate\tConsolidated Total\n\t\t($000 omitted)\t\nBalances at December 31 2019\t243161\t5729\t248890\nAcquisitions\t113642\t19703\t133345\nBalances at September 30 2020\t356803\t25432\t382235\n", "q10k_tbl_21": "\t2020\t2019\n\t($000 omitted)\t\nBalances at January 1\t459053\t461560\nProvisions:\t\t\nCurrent year\t68063\t54670\nPrevious policy years\t537\t863\nTotal provisions\t68600\t55533\nPayments net of recoveries:\t\t\nCurrent year\t(9595)\t(11424)\nPrevious policy years\t(49390)\t(55375)\nTotal payments net of recoveries\t(58985)\t(66799)\nEffects of changes in foreign currency exchange rates\t(1856)\t2067\nBalances at September 30\t466812\t452361\nLoss ratios as a percentage of title operating revenues:\t\t\nCurrent year provisions\t4.5%\t4.1%\nTotal provisions\t4.6%\t4.2%\n", "q10k_tbl_22": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t($000 omitted except per share)\t\t\t\nNumerator:\t\t\t\t\nNet income attributable to Stewart\t55909\t66108\t95232\t78648\nDenominator (000):\t\t\t\t\nBasic average shares outstanding\t25148\t23616\t24151\t23608\nAverage number of dilutive shares relating to grants of restricted shares and units\t149\t157\t105\t172\nDiluted average shares outstanding\t25297\t23773\t24256\t23780\nBasic earnings per share attributable to Stewart\t2.22\t2.80\t3.94\t3.33\nDiluted earnings per share attributable to Stewart\t2.21\t2.78\t3.93\t3.31\n", "q10k_tbl_23": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t($000 omitted)\t\t\t\nTitle segment:\t\t\t\t\nRevenues\t567743\t501199\t1506618\t1349272\nDepreciation and amortization\t3748\t5110\t11302\t15309\nIncome before taxes and noncontrolling interest\t82376\t49481\t152003\t88144\nAncillary services and corporate segment:\t\t\t\t\nRevenues\t27953\t58309\t45083\t80830\nDepreciation and amortization\t1396\t584\t2134\t2149\n(Loss) income before taxes and noncontrolling interest\t(6033)\t41580\t(17371)\t25043\nConsolidated Stewart:\t\t\t\t\nRevenues\t595696\t559508\t1551701\t1430102\nDepreciation and amortization\t5144\t5694\t13436\t17458\nIncome before taxes and noncontrolling interest\t76343\t91061\t134632\t113187\n", "q10k_tbl_24": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\n\t($000 omitted)\t\t\t\nUnited States\t559057\t522159\t1463129\t1340254\nInternational\t36639\t37349\t88572\t89848\n\t595696\t559508\t1551701\t1430102\n", "q10k_tbl_25": "\tThree Months Ended September 30 2020\t\t\tThree Months Ended September 30 2019\t\t\n\tBefore-Tax Amount\tTax Expense (Benefit)\tNet-of-Tax Amount\tBefore-Tax Amount\tTax Expense (Benefit)\tNet-of-Tax Amount\n\t($000 omitted)\t\t\t\t\t\nNet unrealized gains and losses on investments:\t\t\t\t\t\t\nChange in net unrealized gains and losses on investments\t1164\t244\t920\t4560\t957\t3603\nReclassification adjustment for realized gains and losses on investments\t(221)\t(46)\t(175)\t(116)\t(24)\t(92)\n\t943\t198\t745\t4444\t933\t3511\nForeign currency translation adjustments\t4384\t540\t3844\t(6176)\t(1041)\t(5135)\nOther comprehensive income (loss)\t5327\t738\t4589\t(1732)\t(108)\t(1624)\n", "q10k_tbl_26": "\tNine Months Ended September 30 2020\t\t\tNine Months Ended September 30 2019\t\t\n\tBefore-Tax Amount\tTax Expense (Benefit)\tNet-of-Tax Amount\tBefore-Tax Amount\tTax Expense (Benefit)\tNet-of-Tax Amount\n\t($000 omitted)\t\t\t\t\t\nNet unrealized gains and losses on investments:\t\t\t\t\t\t\nChange in net unrealized gains and losses on investments\t19056\t4001\t15055\t22766\t4781\t17985\nReclassification adjustment for realized gains and losses on investments\t(349)\t(73)\t(276)\t152\t32\t120\n\t18707\t3928\t14779\t22918\t4813\t18105\nForeign currency translation adjustments\t(4101)\t(697)\t(3404)\t2750\t822\t1928\nOther comprehensive income\t14606\t3231\t11375\t25668\t5635\t20033\n", "q10k_tbl_27": "\tFor the Three Months Ended September 30\t\t\n\t2020\t2019\t% Change\t\t\t\t\t\t\t\t\t\t\t\t\nOperating revenues\t562.7\t499.2\t13%\t\t\t\t\t\t\t\t\t\t\t\t\nInvestment income\t5.0\t4.8\t6%\t\t\t\t\t\t\t\t\t\t\t\t\nNet realized and unrealized gains (losses)\t0\t(2.8)\t100%\t\t\t\t\t\t\t\t\t\t\t\t\nPretax income\t82.4\t49.5\t66%\t\t\t\t\t\t\t\t\t\t\t\t\nPretax margin\t14.5%\t9.9%\t\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_28": "\tFor the Three Months Ended September 30\t\t\n\t2020\t2019\t% Change\t\t\t\t\t\t\t\t\t\t\t\t\nOperating revenues\t28.0\t8.6\t224%\t\t\t\t\t\t\t\t\t\t\t\t\nNet realized gains\t0\t49.7\t(100)%\t\t\t\t\t\t\t\t\t\t\t\t\nPretax loss\t(6.0)\t41.6\t(115)%\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_29": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2020\t2019\tChange\t% Change\t2020\t2019\tChange\t% Change\n\t($ in millions)\t\t\t\t($ in millions)\t\t\t\nNon-commercial\t\t\t\t\t\t\t\t\nDomestic\t208.2\t160.5\t47.7\t30%\t503.8\t416.8\t87.0\t21%\nInternational\t30.4\t28.8\t1.6\t6%\t70.4\t66.8\t3.6\t5%\n\t238.6\t189.3\t49.3\t26%\t574.2\t483.6\t90.6\t19%\nCommercial:\t\t\t\t\t\t\t\t\nDomestic\t36.7\t49.7\t(13.0)\t(26)%\t108.7\t133.7\t(25.0)\t(19)%\nInternational\t4.8\t6.1\t(1.3)\t(21)%\t13.7\t16.9\t(3.2)\t(19)%\n\t41.5\t55.8\t(14.3)\t(26)%\t122.4\t150.6\t(28.2)\t(19)%\nTotal direct title revenues\t280.1\t245.1\t35.0\t14%\t696.6\t634.2\t62.4\t10%\n", "q10k_tbl_30": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2020\t2019\tChange\t% Change\t2020\t2019\tChange\t% Change\nOpened Orders:\t\t\t\t\t\t\t\t\nCommercial\t3703\t4251\t(548)\t(13)%\t11308\t13209\t(1901)\t(14)%\nPurchase\t73668\t60579\t13089\t22%\t184240\t179298\t4942\t3%\nRefinance\t86823\t45387\t41436\t91%\t223322\t101913\t121409\t119%\nOther\t1067\t1128\t(61)\t(5)%\t2293\t3827\t(1534)\t(40)%\nTotal\t165261\t111345\t53916\t48%\t421163\t298247\t122916\t41%\nClosed Orders:\t\t\t\t\t\t\t\t\nCommercial\t3799\t3956\t(157)\t(4)%\t10556\t11809\t(1253)\t(11)%\nPurchase\t52407\t46080\t6327\t14%\t123548\t124994\t(1446)\t(1)%\nRefinance\t56027\t27834\t28193\t101%\t138909\t59831\t79078\t132%\nOther\t555\t604\t(49)\t(8)%\t1316\t2555\t(1239)\t(48)%\nTotal\t112788\t78474\t34314\t44%\t274329\t199189\t75140\t38%\n", "q10k_tbl_31": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2020\t2019\tChange\t% Change\t2020\t2019\tChange\t% Change\n\t($ in millions)\t\t\t\t($ in millions)\t\t\t\nAmounts retained by agencies\t231.1\t209.0\t22.1\t11%\t659.1\t576.6\t82.5\t15%\nAs a % of agency revenues\t81.8%\t82.2%\t\t\t82.2%\t82.4%\t\t\nEmployee costs\t155.6\t143.8\t11.8\t8%\t428.8\t413.0\t15.8\t5%\nAs a % of operating revenues\t26.3%\t28.3%\t\t\t27.8%\t30.3%\t\t\nOther operating expenses\t98.5\t87.8\t10.7\t12%\t245.0\t251.0\t(6.0)\t(2)%\nAs a % of operating revenues\t16.7%\t17.3%\t\t\t15.9%\t18.4%\t\t\nTitle losses and related claims\t28.4\t21.1\t7.4\t35%\t68.6\t55.5\t13.1\t24%\nAs a % of title revenues\t5.1%\t4.2%\t\t\t4.6%\t4.2%\t\t\n", "q10k_tbl_32": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2020\t2019\tChange\t% Change\t2020\t2019\tChange\t% Change\n\t($ in millions)\t\t\t\t($ in millions)\t\t\t\nProvisions - known claims:\t\t\t\t\t\t\t\t\nCurrent year\t3.0\t4.1\t(1.1)\t(27)%\t7.6\t8.4\t(0.8)\t(10)%\nPrior policy years\t16.9\t18.0\t(1.1)\t(6)%\t45.0\t55.7\t(10.7)\t(19)%\n\t19.9\t22.1\t(2.2)\t(10)%\t52.6\t64.1\t(11.5)\t(18)%\nProvisions - IBNR\t\t\t\t\t\t\t\t\nCurrent year\t25.3\t16.7\t8.6\t51%\t60.5\t46.2\t14.3\t31%\nPrior policy years\t0.1\t0.3\t(0.2)\t(67)%\t0.5\t0.9\t(0.4)\t(44)%\n\t25.4\t17.0\t8.4\t49%\t61.0\t47.1\t13.9\t30%\nTransferred from IBNR to known claims\t(16.9)\t(18.0)\t1.1\t(6)%\t(45.0)\t(55.7)\t10.7\t(19)%\nTotal provisions\t28.4\t21.1\t7.4\t35%\t68.6\t55.5\t13.1\t24%\n", "q10k_tbl_33": "\tSeptember 30 2020\tDecember 31 2019\n\t($ in millions)\t\nKnown claims\t61.4\t67.8\nIBNR\t405.4\t391.3\nTotal estimated title losses\t466.8\t459.1\n", "q10k_tbl_34": "\tNine Months Ended September 30\t\n\t2020\t2019\n\t($ in millions)\t\nNet cash provided by operating activities\t140.9\t107.3\nNet cash (used) provided by investing activities\t(156.1)\t53.4\nNet cash provided (used) by financing activities\t66.7\t(33.0)\n", "q10k_tbl_35": "Exhibit\t\t\n3.1\t0\tRestated Certificate of Incorporation of the Registrant dated April 28 2016 (incorporated by reference in this report from Exhibit 3.1 of the Current Report on Form 8-K filed April 29 2016)\n3.2\t0\tThird Amended and Restated By-Laws of the Registrant as of April 27 2016 (incorporated by reference in this report from Exhibit 3.2 of the Current Report on Form 8-K filed April 28 2016)\n10.1*\t0\tAsset Purchase and Sale Agreement dated and effective September 1 2020 by and between the Registrant and Unified Title Company LLC Unified Title Company of Northern Colorado LLC Legacy Title Group LLC Empire West Title Agency LLC Western Title Company LLC Colorado Escrow and Title Services LLC Empire Title of Colorado Springs LLC Western Exchange Services LLC El Paso Title Plant LLC and ET Production Services LLC\n", "q10k_tbl_36": "31.1*\t0\tCertification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002\n31.2*\t0\tCertification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002\n32.1*\t0\tCertification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\n32.2*\t0\tCertification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\n"}{"bs": "q10k_tbl_4", "is": "q10k_tbl_3", "cf": "q10k_tbl_5"}None
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
or
☐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 001-02658
STEWART INFORMATION SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
74-1677330
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1360 Post Oak Blvd.,
Suite 100
Houston,
Texas
77056
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code:(713) 625-8100
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $1 par value per share
STC
New York Stock Exchange
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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☑
Large accelerated filer
☐
Non-accelerated filer
☐
Emerging growth company
☐
Accelerated filer
☐
Smaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
On October 29, 2020, there were 26,719,342 outstanding shares of the issuer's Common Stock.
As used in this report, “we,” “us,” “our,” "Registrant," the “Company” and “Stewart” mean Stewart Information Services Corporation and our subsidiaries, unless the context indicates otherwise.
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
($000 omitted, except per share)
Revenues
Title revenues:
Direct operations
280,114
245,068
696,611
634,198
Agency operations
282,605
254,155
802,022
699,835
Ancillary services
27,957
8,628
44,573
30,708
Operating revenues
590,676
507,851
1,543,206
1,364,741
Investment income
5,027
4,752
14,530
14,631
Net realized and unrealized (losses) gains
(7)
46,905
(6,035)
50,730
595,696
559,508
1,551,701
1,430,102
Expenses
Amounts retained by agencies
231,051
208,973
659,138
576,559
Employee costs
155,638
143,815
428,817
412,967
Other operating expenses
98,531
87,826
245,003
251,030
Title losses and related claims
28,427
21,059
68,600
55,532
Depreciation and amortization
5,144
5,694
13,436
17,458
Interest
562
1,080
2,075
3,369
519,353
468,447
1,417,069
1,316,915
Income before taxes and noncontrolling interests
76,343
91,061
134,632
113,187
Income tax expense
(16,058)
(21,393)
(29,293)
(25,978)
Net income
60,285
69,668
105,339
87,209
Less net income attributable to noncontrolling interests
4,376
3,560
10,107
8,561
Net income attributable to Stewart
55,909
66,108
95,232
78,648
Net income
60,285
69,668
105,339
87,209
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments
3,844
(5,135)
(3,404)
1,928
Change in net unrealized gains and losses on investments
920
3,603
15,055
17,985
Reclassification adjustment for realized gains and losses on investments
(175)
(92)
(276)
120
Other comprehensive income (loss), net of taxes:
4,589
(1,624)
11,375
20,033
Comprehensive income
64,874
68,044
116,714
107,242
Less net income attributable to noncontrolling interests
4,376
3,560
10,107
8,561
Comprehensive income attributable to Stewart
60,498
64,484
106,607
98,681
Basic average shares outstanding (000)
25,148
23,616
24,151
23,608
Basic earnings per share attributable to Stewart
2.22
2.80
3.94
3.33
Diluted average shares outstanding (000)
25,297
23,773
24,256
23,780
Diluted earnings per share attributable to Stewart
2.21
2.78
3.93
3.31
See notes to condensed consolidated financial statements.
3
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2020 (Unaudited)
As of December 31, 2019
($000 omitted)
Assets
Cash and cash equivalents
381,560
330,609
Short-term investments
21,288
23,527
Investments in debt and equity securities, at fair value
650,599
645,039
Receivables:
Premiums from agencies
32,749
26,405
Trade and other
47,287
45,962
Income taxes
2,110
1,641
Notes
1,591
2,464
Allowance for uncollectible amounts
(4,456)
(4,469)
79,281
72,003
Property and equipment:
Land
2,964
3,009
Buildings
22,423
20,519
Furniture and equipment
174,079
178,416
Accumulated depreciation
(148,490)
(151,483)
50,976
50,461
Operating lease assets
110,038
99,028
Title plants, at cost
72,850
72,627
Investments on equity method basis
6,851
6,169
Goodwill
382,235
248,890
Intangible assets, net of amortization
22,002
4,623
Deferred tax assets
4,451
4,407
Other assets
38,058
35,402
1,820,189
1,592,785
Liabilities
Notes payable
101,256
110,632
Accounts payable and accrued liabilities
143,207
126,779
Operating lease liabilities
122,475
113,843
Estimated title losses
466,812
459,053
Deferred tax liabilities
35,570
28,719
869,320
839,026
Contingent liabilities and commitments
Stockholders’ equity
Common Stock ($1 par value) and additional paid-in capital
300,648
188,279
Retained earnings
637,223
564,392
Accumulated other comprehensive income (loss):
Foreign currency translation adjustments
(16,430)
(13,027)
Net unrealized gains on debt securities investments
25,106
10,328
Treasury stock – 352,161 common shares, at cost
(2,666)
(2,666)
Stockholders’ equity attributable to Stewart
943,881
747,306
Noncontrolling interests
6,988
6,453
Total stockholders’ equity (26,719,342 and 23,709,407 shares outstanding)
950,869
753,759
1,820,189
1,592,785
See notes to condensed consolidated financial statements.
4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30,
2020
2019
($000 omitted)
Reconciliation of net income to cash provided by operating activities:
Net income
105,339
87,209
Add (deduct):
Depreciation and amortization
13,436
17,458
Provision for bad debt
363
889
Net realized and unrealized losses (gains)
6,035
(730)
Amortization of net premium on debt securities investments
3,280
3,790
Payments for title losses less than (in excess of) provisions
9,615
(11,266)
Adjustment for insurance recoveries of title losses
(73)
175
Increase in receivables – net
(4,290)
(8,838)
(Increase) decrease in other assets – net
(1,702)
2,910
Decrease in accounts payable and other liabilities – net
1,301
6,753
Change in net deferred income taxes
3,576
5,563
Net income from equity investees
(2,385)
(1,996)
Dividends received from equity investees
2,499
1,964
Stock-based compensation expense
4,234
3,380
Other – net
(367)
28
Cash provided by operating activities
140,861
107,289
Investing activities:
Proceeds from sales of investments in securities
25,772
20,899
Proceeds from matured investments in debt securities
46,677
44,685
Purchases of investments in securities
(75,487)
(2,187)
Net sales (purchases) of short-term investments
2,431
(193)
Purchases of property and equipment, and real estate – net
(10,492)
(11,957)
Cash paid for acquisition of businesses
(146,518)
—
Other – net
1,524
2,111
Cash (used) provided by investing activities
(156,093)
53,358
Financing activities:
Proceeds from notes payable
2,361
23,514
Payments on notes payable
(11,737)
(26,179)
Distributions to noncontrolling interests
(9,572)
(8,578)
Issuance of new Common Stock
108,961
—
Repurchases of Common Stock
(826)
(481)
Cash dividends paid
(22,214)
(21,257)
Other - net
(311)
25
Cash provided (used) by financing activities
66,662
(32,956)
Effects of changes in foreign currency exchange rates
(479)
1,202
Increase in cash and cash equivalents
50,951
128,893
Cash and cash equivalents at beginning of period
330,609
192,067
Cash and cash equivalents at end of period
381,560
320,960
See notes to condensed consolidated financial statements.
5
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
Common Stock
Additional paid-in capital
Retained earnings
Accumulated other comprehensive (loss) income
Treasury stock
Noncontrolling interests
Total
($000 omitted)
Nine Months Ended September 30, 2020
Balance at December 31, 2019
24,062
164,217
564,392
(2,699)
(2,666)
6,453
753,759
Net income attributable to Stewart
—
—
95,232
—
—
—
95,232
Dividends on Common Stock ($0.90 per share)
—
—
(22,401)
—
—
—
(22,401)
Issuance of Common Stock
3,026
105,935
—
—
—
—
108,961
Stock-based compensation
4
4,230
—
—
—
—
4,234
Stock repurchases
(20)
(806)
—
—
—
—
(826)
Change in net unrealized gains and losses on investments, net of taxes
—
—
—
15,055
—
—
15,055
Reclassification adjustment for realized gains and losses on investments, net of taxes
—
—
—
(276)
—
—
(276)
Foreign currency translation adjustments, net of taxes
—
—
—
(3,404)
—
—
(3,404)
Net income attributable to noncontrolling interests
—
—
—
—
—
10,107
10,107
Distributions to noncontrolling interests
—
—
—
—
—
(9,572)
(9,572)
Balance at September 30, 2020
27,072
273,576
637,223
8,676
(2,666)
6,988
950,869
Nine Months Ended September 30, 2019
Balance at December 31, 2018
24,072
162,642
514,248
(24,771)
(2,666)
6,312
679,837
Net income attributable to Stewart
—
—
78,648
—
—
—
78,648
Dividends on Common Stock ($0.90 per share)
—
—
(21,506)
—
—
—
(21,506)
Stock-based compensation
4
3,376
—
—
—
—
3,380
Stock repurchases
(11)
(470)
—
—
—
—
(481)
Change in net unrealized gains and losses on investments, net of taxes
—
—
—
17,985
—
—
17,985
Reclassification adjustment for realized gains and losses on investments, net of taxes, net of taxes
—
—
—
120
—
—
120
Foreign currency translation adjustments, net of taxes
—
—
—
1,928
—
—
1,928
Net income attributable to noncontrolling interests
—
—
—
—
—
8,561
8,561
Distributions to noncontrolling interests
—
—
—
—
—
(8,578)
(8,578)
Net effect of other changes in ownership
—
—
—
—
—
(10)
(10)
Balance at September 30, 2019
24,065
165,548
571,390
(4,738)
(2,666)
6,285
759,884
6
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
Common Stock
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Treasury stock
Noncontrolling interests
Total
($000 omitted)
Three Months Ended September 30, 2020
Balances at June 30, 2020
24,052
166,208
589,424
4,087
(2,666)
6,227
787,332
Net income attributable to Stewart
—
—
55,909
—
—
—
55,909
Dividends on Common Stock ($0.30 per share)
—
—
(8,110)
—
—
—
(8,110)
Issuance of Common Stock
3,026
105,935
—
—
—
—
108,961
Stock-based compensation
2
1,783
—
—
—
—
1,785
Stock repurchases
(8)
(350)
—
—
—
—
(358)
Change in net unrealized gains and losses on investments, net of taxes
—
—
—
920
—
—
920
Reclassification adjustment for realized gains and losses on investments, net of taxes
—
—
—
(175)
—
—
(175)
Foreign currency translation adjustments, net of taxes
—
—
—
3,844
—
—
3,844
Net income attributable to noncontrolling interests
—
—
—
—
—
4,376
4,376
Distributions to noncontrolling interests
—
—
—
—
—
(3,615)
(3,615)
Balance at September 30, 2020
27,072
273,576
637,223
8,676
(2,666)
6,988
950,869
Three Months Ended September 30, 2019
Balances at June 30, 2019
24,065
164,235
512,467
(3,114)
(2,666)
5,840
700,827
Net income attributable to Stewart
—
—
66,108
—
—
—
66,108
Dividends on Common Stock ($0.30 per share)
—
—
(7,185)
—
—
—
(7,185)
Stock-based compensation
—
1,323
—
—
—
—
1,323
Stock repurchases
—
(10)
—
—
—
—
(10)
Change in net unrealized gains and losses on investments, net of taxes
—
—
—
3,603
—
—
3,603
Reclassification adjustment for realized gains and losses on investments, net of taxes, net of taxes
—
—
—
(92)
—
—
(92)
Foreign currency translation adjustments, net of taxes
—
—
—
(5,135)
—
—
(5,135)
Net income attributable to noncontrolling interests
—
—
—
—
—
3,560
3,560
Distributions to noncontrolling interests
—
—
—
—
—
(3,091)
(3,091)
Net effect of other changes in ownership
—
—
—
—
—
(24)
(24)
Balance at September 30, 2019
24,065
165,548
571,390
(4,738)
(2,666)
6,285
759,884
See notes to condensed consolidated financial statements.
7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
Interim financial statements. The financial information contained in this report for the three months ended September 30, 2020 and 2019, and as of September 30, 2020, is unaudited. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on February 27, 2020 (2019 Form 10-K).
A. Management’s responsibility. The accompanying interim financial statements were prepared by management, who is responsible for their integrity and objectivity. These financial statements have been prepared in conformity with the United States (U.S.) generally accepted accounting principles (GAAP), including management’s best judgments and estimates. In the opinion of management, all adjustments necessary for a fair presentation of this information for all interim periods, consisting only of normal recurring accruals, have been made. The Company’s results of operations for interim periods are not necessarily indicative of results for a full year and actual results could differ.
B. Consolidation. The condensed consolidated financial statements include all subsidiaries in which the Company owns more than 50% voting rights in electing directors. All significant intercompany amounts and transactions have been eliminated and provisions have been made for noncontrolling interests. Unconsolidated investees, in which the Company typically owns from 20% to 50% of the voting stock, are accounted for using the equity method.
C. Restrictions on cash and investments. The Company maintains 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 $535.7 million and $483.4 million at September 30, 2020 and December 31, 2019, respectively. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $21.1 million and $39.7 million at September 30, 2020 and December 31, 2019, respectively. Although these cash statutory reserve funds are not restricted or segregated in depository accounts, they are required to be held pursuant to state statutes. If the Company fails to maintain minimum investments or cash and cash equivalents sufficient to meet statutory requirements, the Company may be subject to fines or other penalties, including potential revocation of its business license. These funds are not available for any other purpose. In the event that insurance regulators adjust the determination of the statutory premium reserves of the Company’s title insurers, these restricted funds as well as statutory surplus would correspondingly increase or decrease.
D. Issuance of Common Stock. On August 17, 2020, the Company issued an aggregate of 3,026,340 new shares of its Common Stock ($1 par value), which included shares purchased by the underwriters to the transaction. Proceeds from the Common Stock issuance, net of issuance costs, amounted to $109.0 million.
E. Impact of the COVID-19 pandemic. In March 2020, a global pandemic escalated relating to a novel strain of coronavirus (COVID-19), which resulted in a slowdown in the global economy and a U.S. declaration of a national emergency. In response to the pandemic, health and governmental bodies, including the state of Texas where the Company is headquartered, issued travel restrictions, quarantine orders, temporary closures of non-essential businesses and other restrictive measures. To date, various levels of restrictions are still in place across the U.S. to address the spread of COVID-19. Although the title insurance industry has been deemed essential in the U.S., the pandemic and measures to contain it have caused disruptions in the real estate market and in the Company's business operations. To the extent that the COVID-19 pandemic continues or worsens, it could adversely impact the Company's future operational and financial performance, which may result in impairments of its assets. The Company is currently unable to determine the effects the COVID-19 pandemic will have on the Company's future financial statements or results of operations.
8
NOTE 2
Revenues. The Company's operating revenues, summarized by type, are as follows:
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
($000 omitted)
Title insurance premiums:
Direct
190,794
174,635
478,822
448,920
Agency
282,605
254,155
802,022
699,835
Escrow fees
53,384
38,666
127,903
100,570
Search, abstract and valuation services
42,627
20,922
81,533
63,109
Other revenues
21,266
19,473
52,926
52,307
590,676
507,851
1,543,206
1,364,741
NOTE 3
Investments in debt and equity securities.The total fair values of the Company's investments in debt and equity securities are as follows:
September 30, 2020
December 31, 2019
($000 omitted)
Investments in:
Debt securities
617,895
605,721
Equity securities
32,704
39,318
650,599
645,039
As of September 30, 2020 and December 31, 2019, the net unrealized investment gains relating to investments in equity securities held were $0.4 million and $6.9 million, respectively (refer to Note 5).
The amortized costs and fair values of investments in debt securities are as follows:
September 30, 2020
December 31, 2019
Amortized
costs
Fair
values
Amortized
costs
Fair
values
($000 omitted)
Municipal
46,397
48,952
52,176
53,823
Corporate
301,297
320,348
299,074
309,142
Foreign
231,859
241,969
234,734
236,073
U.S. Treasury Bonds
6,562
6,626
6,664
6,683
586,115
617,895
592,648
605,721
Foreign debt securities consist of Canadian government and corporate bonds, United Kingdom treasury and corporate bonds, and Mexican government bonds.
9
Gross unrealized gains and losses on investments in debt securities are as follows:
September 30, 2020
December 31, 2019
Gains
Losses
Gains
Losses
($000 omitted)
Municipal
2,555
—
1,649
2
Corporate
19,396
345
10,091
23
Foreign
10,131
21
2,362
1,023
U.S. Treasury Bonds
88
24
60
41
32,170
390
14,162
1,089
Debt securities as of September 30, 2020 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights):
Amortized
costs
Fair
values
($000 omitted)
In one year or less
68,394
69,164
After one year through five years
299,977
313,410
After five years through ten years
186,766
201,134
After ten years
30,978
34,187
586,115
617,895
Gross unrealized losses on investments in debt securities and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2020, were:
Less than 12 months
More than 12 months
Total
Losses
Fair values
Losses
Fair values
Losses
Fair values
($000 omitted)
Municipal
—
—
—
—
—
—
Corporate
345
22,781
—
—
345
22,781
Foreign
1
4,106
20
240
21
4,346
U.S. Treasury Bonds
—
—
24
1,022
24
1,022
346
26,887
44
1,262
390
28,149
The number of specific debt investment holdings held in an unrealized loss position as of September 30, 2020 was 15. Of these securities, 3 were in unrealized loss positions for more than 12 months. During 2020, the overall investment fair values increased, primarily resulting from the effect of lower interest rates which was partially offset by increased credit spreads. Since the Company does not intend to sell and will more likely than not maintain each investment security until its maturity or anticipated recovery, and no significant credit risk is deemed to exist, these investments are not considered as other-than-temporarily impaired. The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized.
10
Gross unrealized losses on investments in debt securities and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2019, were: