Company Quick10K Filing
Stewart Information Services
Price38.50 EPS4
Shares24 P/E9
MCap916 P/FCF9
Net Debt-321 EBIT128
TEV595 TEV/EBIT5
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-03
10-Q 2020-03-31 Filed 2020-05-04
10-K 2019-12-31 Filed 2020-02-27
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-07
10-Q 2019-03-31 Filed 2019-05-01
10-K 2018-12-31 Filed 2019-02-28
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-06
10-Q 2018-03-31 Filed 2018-05-03
10-K 2017-12-31 Filed 2018-02-28
10-Q 2017-09-30 Filed 2017-11-07
10-Q 2017-06-30 Filed 2017-07-28
10-Q 2017-03-31 Filed 2017-04-28
10-K 2016-12-31 Filed 2017-02-27
10-Q 2016-09-30 Filed 2016-11-01
10-Q 2016-06-30 Filed 2016-07-29
10-Q 2016-03-31 Filed 2016-04-29
10-K 2015-12-31 Filed 2016-02-26
10-Q 2015-09-30 Filed 2015-11-03
10-Q 2015-06-30 Filed 2015-07-31
10-Q 2015-03-31 Filed 2015-05-04
10-K 2014-12-31 Filed 2015-02-27
10-Q 2014-09-30 Filed 2014-10-31
10-Q 2014-06-30 Filed 2014-08-01
10-Q 2014-03-31 Filed 2014-05-01
10-K 2013-12-31 Filed 2014-02-28
10-Q 2013-09-30 Filed 2013-11-06
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-03
10-K 2012-12-31 Filed 2013-03-06
10-Q 2012-09-30 Filed 2012-11-02
10-Q 2012-06-30 Filed 2012-08-03
10-Q 2012-03-31 Filed 2012-05-03
10-K 2011-12-31 Filed 2012-03-12
10-Q 2011-09-30 Filed 2011-11-02
10-Q 2011-06-30 Filed 2011-08-03
10-Q 2011-03-31 Filed 2011-05-04
10-K 2010-12-31 Filed 2011-03-03
10-Q 2010-09-30 Filed 2010-11-03
10-Q 2010-06-30 Filed 2010-08-03
10-Q 2010-03-31 Filed 2010-05-05
10-K 2009-12-31 Filed 2010-03-05
8-K 2020-09-01 Enter Agreement, Other Events, Exhibits
8-K 2020-08-31 Regulation FD, Exhibits
8-K 2020-08-12 Enter Agreement, Other Events, Exhibits
8-K 2020-07-22
8-K 2020-06-04
8-K 2020-06-01
8-K 2020-05-07
8-K 2020-04-22
8-K 2020-02-07
8-K 2020-02-05
8-K 2020-01-15
8-K 2019-12-12
8-K 2019-12-09
8-K 2019-10-22
8-K 2019-10-01
8-K 2019-09-20
8-K 2019-09-09
8-K 2019-09-08
8-K 2019-09-06
8-K 2019-07-25
8-K 2019-06-19
8-K 2019-06-10
8-K 2019-04-25
8-K 2019-03-11
8-K 2019-02-14
8-K 2019-01-31
8-K 2019-01-31
8-K 2018-12-31
8-K 2018-12-31
8-K 2018-11-09
8-K 2018-11-02
8-K 2018-10-25
8-K 2018-09-05
8-K 2018-08-24
8-K 2018-08-22
8-K 2018-07-18
8-K 2018-06-18
8-K 2018-05-31
8-K 2018-05-22
8-K 2018-05-03
8-K 2018-03-18
8-K 2018-02-22
8-K 2018-02-08
8-K 2017-12-29

STC 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
Note 10
Note 11
Note 12
Note 13
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 5. Other Information
Item 6. Exhibits
EX-31.1 q2-2020ex311.htm
EX-31.2 q2-2020ex312.htm
EX-32.1 q2-2020ex321.htm
EX-32.2 q2-2020ex322.htm

Stewart Information Services Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
1.61.31.00.60.30.02012201420172020
Assets, Equity
0.60.50.30.20.0-0.12012201420172020
Rev, G Profit, Net Income
0.20.10.10.0-0.0-0.12012201420172020
Ops, Inv, Fin

Document
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iso4217:USD xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q
(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 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: (713625-8100
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 July 27, 2020, there were 23,700,919 outstanding shares of the issuer's Common Stock.




FORM 10-Q QUARTERLY REPORT
QUARTER ENDED JUNE 30, 2020
TABLE OF CONTENTS
 
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 
 June 30,
 
Six Months Ended 
 June 30,
 
2020
 
2019
 
2020
 
2019
 
($000 omitted, except per share)
Revenues
 
 
 
 
 
 
 
Title revenues:
 
 
 
 
 
 
 
Direct operations
218,214

 
227,883

 
416,496

 
389,130

Agency operations
277,387

 
230,817

 
519,417

 
445,680

Ancillary services
11,155

 
7,798

 
16,616

 
22,080

Operating revenues
506,756

 
466,498

 
952,529

 
856,890

Investment income
4,285

 
5,155

 
9,503

 
9,879

Net realized and unrealized gains (losses)
5,064

 
422

 
(6,027
)
 
3,826

 
516,105

 
472,075

 
956,005

 
870,595

Expenses
 
 
 
 
 
 
 
Amounts retained by agencies
228,720

 
191,091

 
428,086

 
367,586

Employee costs
137,528

 
139,896

 
273,180

 
269,151

Other operating expenses
74,613

 
86,051

 
146,473

 
163,207

Title losses and related claims
21,541

 
18,786

 
40,172

 
34,473

Depreciation and amortization
4,061

 
5,775

 
8,292

 
11,764

Interest
622

 
1,124

 
1,513

 
2,288

 
467,085

 
442,723

 
897,716

 
848,469

Income before taxes and noncontrolling interests
49,020

 
29,352

 
58,289

 
22,126

Income tax expense
(11,340
)
 
(7,027
)
 
(13,235
)
 
(4,585
)
Net income
37,680

 
22,325

 
45,054

 
17,541

Less net income attributable to noncontrolling interests
3,534

 
3,019

 
5,731

 
5,001

Net income attributable to Stewart
34,146

 
19,306

 
39,323

 
12,540

 
 
 
 
 
 
 
 
Net income
37,680

 
22,325

 
45,054

 
17,541

Other comprehensive income (loss), net of taxes:
 
 
 
 
 
 
 
Foreign currency translation adjustments
4,194

 
2,475

 
(7,248
)
 
7,063

Change in net unrealized gains and losses on investments
16,715

 
5,371

 
14,135

 
14,382

Reclassification adjustment for realized gains and losses on investments
(21
)
 
50

 
(101
)
 
212

Other comprehensive income, net of taxes:
20,888

 
7,896

 
6,786

 
21,657

Comprehensive income
58,568

 
30,221

 
51,840

 
39,198

Less net income attributable to noncontrolling interests
3,534

 
3,019

 
5,731

 
5,001

Comprehensive income attributable to Stewart
55,034

 
27,202

 
46,109

 
34,197

 
 
 
 
 
 
 
 
Basic average shares outstanding (000)
23,656

 
23,614

 
23,647

 
23,605

Basic earnings per share attributable to Stewart
1.44

 
0.82

 
1.66

 
0.53

Diluted average shares outstanding (000)
23,756

 
23,758

 
23,757

 
23,750

Diluted earnings per share attributable to Stewart
1.44

 
0.81

 
1.66

 
0.53

See notes to condensed consolidated financial statements.

3


CONDENSED CONSOLIDATED BALANCE SHEETS
 
As of 
 June 30, 2020 (Unaudited)
 
As of 
 December 31, 2019
 
($000 omitted)
Assets
 
 
 
Cash and cash equivalents
310,806

 
330,609

Short-term investments
20,560

 
23,527

Investments in debt and equity securities, at fair value
645,347

 
645,039

Receivables:
 
 
 
Premiums from agencies
29,342

 
26,405

Trade and other
38,196

 
45,962

Income taxes
1,514

 
1,641

Notes
2,247

 
2,464

Allowance for uncollectible amounts
(4,442
)
 
(4,469
)
 
66,857

 
72,003

Property and equipment:
 
 
 
Land
3,009

 
3,009

Buildings
22,433

 
20,519

Furniture and equipment
169,591

 
178,416

Accumulated depreciation
(145,187
)
 
(151,483
)
 
49,846

 
50,461

Operating lease assets
100,353

 
99,028

Title plants, at cost
72,650

 
72,627

Investments on equity method basis
5,976

 
6,169

Goodwill
279,857

 
248,890

Intangible assets, net of amortization
3,843

 
4,623

Deferred tax assets
4,407

 
4,407

Other assets
39,732

 
35,402

 
1,600,234

 
1,592,785

Liabilities
 
 
 
Notes payable
101,702

 
110,632

Accounts payable and accrued liabilities
108,394

 
126,779

Operating lease liabilities
113,292

 
113,843

Estimated title losses
456,025

 
459,053

Deferred tax liabilities
33,489

 
28,719

 
812,902

 
839,026

Contingent liabilities and commitments

 

Stockholders’ equity
 
 
 
Common Stock ($1 par value) and additional paid-in capital
190,260

 
188,279

Retained earnings
589,424

 
564,392

Accumulated other comprehensive income (loss):
 
 
 
Net unrealized gains on debt securities investments
(20,275
)
 
10,328

Foreign currency translation adjustments
24,362

 
(13,027
)
Treasury stock – 352,161 common shares, at cost
(2,666
)
 
(2,666
)
Stockholders’ equity attributable to Stewart
781,105

 
747,306

Noncontrolling interests
6,227

 
6,453

Total stockholders’ equity (23,699,228 and 23,709,407 shares outstanding)
787,332

 
753,759

 
1,600,234

 
1,592,785

See notes to condensed consolidated financial statements.

4


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
Six Months Ended 
 June 30,
 
2020
 
2019
 
($000 omitted)
Reconciliation of net income to cash provided (used) by operating activities:
 
 
 
Net income
45,054

 
17,541

Add (deduct):
 
 
 
Depreciation and amortization
8,292

 
11,764

Provision for bad debt
106

 
462

Net realized and unrealized losses (gains)
6,027

 
(3,826
)
Amortization of net premium on debt securities investments
2,253

 
2,628

Payments for title losses less than (in excess of) provisions
1,236

 
(11,178
)
Adjustment for insurance recoveries of title losses
228

 
314

Decrease (increase) in receivables – net
8,792

 
(16,865
)
Increase in other assets – net
(3,743
)
 
(1,111
)
Decrease in accounts payable and other liabilities – net
(22,817
)
 
(11,588
)
Change in net deferred income taxes
2,277

 
1,185

Net income from equity investees
(1,356
)
 
(1,047
)
Dividends received from equity investees
1,549

 
1,220

Stock-based compensation expense
2,449

 
2,057

Other – net
(237
)
 
15

Cash provided (used) by operating activities
50,110

 
(8,429
)
Investing activities:
 
 
 
Proceeds from sales of investments in securities
15,499

 
9,952

Proceeds from matured investments in debt securities
33,096

 
35,884

Purchases of investments in securities
(50,856
)
 
(1,263
)
Net sales (purchases) of short-term investments
2,763

 
(58
)
Purchases of property and equipment, and real estate – net
(6,796
)
 
(7,889
)
Cash paid for acquisition of businesses
(33,417
)
 

Other – net
1,278

 
1,705

Cash (used) provided by investing activities
(38,433
)
 
38,331

Financing activities:
 
 
 
Proceeds from notes payable
404

 
20,506

Payments on notes payable
(9,334
)
 
(23,139
)
Distributions to noncontrolling interests
(5,957
)
 
(5,487
)
Repurchases of common stock
(468
)
 
(471
)
Cash dividends paid
(14,198
)
 
(14,167
)
Cash used by financing activities
(29,553
)
 
(22,758
)
Effects of changes in foreign currency exchange rates
(1,927
)
 
1,994

(Decrease) increase in cash and cash equivalents
(19,803
)
 
9,138

Cash and cash equivalents at beginning of period
330,609

 
192,067

Cash and cash equivalents at end of period
310,806

 
201,205

 
 
 
 

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
 
Treasury stock
 
Noncontrolling interests
 
Total
 
($000 omitted)
Six Months Ended June 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

 

 
39,323

 

 

 

 
39,323

Dividends on Common Stock ($0.60 per share)

 

 
(14,291
)
 

 

 

 
(14,291
)
Stock-based compensation
2

 
2,447

 

 

 

 

 
2,449

Stock repurchases
(12
)
 
(456
)
 

 

 

 

 
(468
)
Change in net unrealized gains and losses on investments, net of taxes

 

 

 
14,135

 

 

 
14,135

Reclassification adjustment for realized gains and losses on investments, net of taxes

 

 

 
(101
)
 

 

 
(101
)
Foreign currency translation adjustments, net of taxes

 

 

 
(7,248
)
 

 

 
(7,248
)
Net income attributable to noncontrolling interests

 

 

 

 

 
5,731

 
5,731

Distributions to noncontrolling interests

 

 

 

 

 
(5,957
)
 
(5,957
)
Balance at June 30, 2020
24,052

 
166,208

 
589,424

 
4,087

 
(2,666
)
 
6,227

 
787,332

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 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

 

 
12,540

 

 

 

 
12,540

Dividends on Common Stock ($0.60 per share)

 

 
(14,321
)
 

 

 

 
(14,321
)
Stock-based compensation
4

 
2,053

 

 

 

 

 
2,057

Stock repurchases
(11
)
 
(460
)
 

 

 

 

 
(471
)
Change in net unrealized gains and losses on investments, net of taxes

 

 

 
14,382

 

 

 
14,382

Reclassification adjustment for realized gains and losses on investments, net of taxes, net of taxes

 

 

 
212

 

 

 
212

Foreign currency translation adjustments, net of taxes

 

 

 
7,063

 

 

 
7,063

Net income attributable to noncontrolling interests

 

 

 

 

 
5,001

 
5,001

Distributions to noncontrolling interests

 

 

 

 

 
(5,487
)
 
(5,487
)
Net effect of other changes in ownership

 

 

 

 

 
14

 
14

Balance at June 30, 2019
24,065

 
164,235

 
512,467

 
(3,114
)
 
(2,666
)
 
5,840

 
700,827




6


CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

 
Common Stock
 
Additional paid-in capital
 
Retained earnings
 
Accumulated other comprehensive loss
 
Treasury stock
 
Noncontrolling interests
 
Total
 
($000 omitted)
Three Months Ended June 30, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
Balances at March 31, 2020
24,032

 
164,741

 
562,445

 
(16,801
)
 
(2,666
)
 
5,324

 
737,075

Net income attributable to Stewart

 

 
34,146

 

 

 

 
34,146

Dividends on Common Stock ($0.30 per share)

 

 
(7,167
)
 

 

 

 
(7,167
)
Stock-based compensation
22

 
1,540

 

 

 

 

 
1,562

Stock repurchases
(2
)
 
(73
)
 

 

 

 

 
(75
)
Change in net unrealized gains and losses on investments, net of taxes

 

 

 
16,715

 

 

 
16,715

Reclassification adjustment for realized gains and losses on investments, net of taxes

 

 

 
(21
)
 

 

 
(21
)
Foreign currency translation adjustments, net of taxes

 

 

 
4,194

 

 

 
4,194

Net income attributable to noncontrolling interests

 

 

 

 

 
3,534

 
3,534

Distributions to noncontrolling interests

 

 

 

 

 
(2,631
)
 
(2,631
)
Balance at June 30, 2020
24,052

 
166,208

 
589,424

 
4,087

 
(2,666
)
 
6,227

 
787,332

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
Balances at March 31, 2019
24,052

 
163,087

 
500,335

 
(11,010
)
 
(2,666
)
 
5,106

 
678,904

Net income attributable to Stewart

 

 
19,306

 

 

 

 
19,306

Dividends on Common Stock ($0.30 per share)

 

 
(7,174
)
 

 

 

 
(7,174
)
Stock-based compensation
15

 
1,238

 

 

 

 

 
1,253

Stock repurchases
(2
)
 
(90
)
 

 

 

 

 
(92
)
Change in net unrealized gains and losses on investments, net of taxes

 

 

 
5,371

 

 

 
5,371

Reclassification adjustment for realized gains and losses on investments, net of taxes, net of taxes

 

 

 
50

 

 

 
50

Foreign currency translation adjustments, net of taxes

 

 

 
2,475

 

 

 
2,475

Net income attributable to noncontrolling interests

 

 

 

 

 
3,019

 
3,019

Distributions to noncontrolling interests

 

 

 

 

 
(2,310
)
 
(2,310
)
Net effect of other changes in ownership

 

 

 

 

 
25

 
25

Balance at June 30, 2019
24,065

 
164,235

 
512,467

 
(3,114
)
 
(2,666
)
 
5,840

 
700,827

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 June 30, 2020 and 2019, and as of June 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 $504.2 million and $483.4 million at June 30, 2020 and December 31, 2019, respectively. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $39.4 million and $39.7 million at June 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. Amendment to the line of credit facility. On May 7, 2020, in relation to its line of credit facility (as disclosed in Note 10 of the 2019 Form 10-K), the Company entered into an amended and restated credit agreement (Amended Credit Agreement), which increased the available unsecured line of credit commitment from $150.0 million to $200.0 million and extended the maturity of the line of credit to May 2025. The terms of the Amended Credit Agreement, which includes an additional $50.0 million that the Company can request, did not significantly change from the prior line of credit agreement.

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 continuous 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. While the Company continues to close transactions on a daily basis, as it works through a pipeline of opened orders, there is near-term uncertainty regarding future real estate market transaction volumes and the impacts to the Company's results of 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 
 June 30,
 
Six Months Ended 
 June 30,
 
2020
 
2019
 
2020
 
2019
 
($000 omitted)
Title insurance premiums:
 
 
 
 
 
 
 
Direct
149,745

 
162,367

 
288,028

 
274,285

Agency
277,387

 
230,817

 
519,417

 
445,680

Escrow fees
41,433

 
36,611

 
74,519

 
61,904

Search, abstract and valuation services
22,829

 
19,248

 
38,906

 
42,187

Other revenues
15,362

 
17,455

 
31,659

 
32,834

 
506,756

 
466,498

 
952,529

 
856,890




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:
 
June 30, 2020
 
December 31, 2019
 
($000 omitted)
Investments in:
 
 
 
Debt securities
612,891

 
605,721

Equity securities
32,456

 
39,318

 
645,347

 
645,039



As of June 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:
 
June 30, 2020
 
December 31, 2019
 
Amortized
costs
 
Fair
values
 
Amortized
costs
 
Fair
values
 
($000 omitted)
Municipal
47,635

 
50,068

 
52,176

 
53,823

Corporate
301,299

 
319,972

 
299,074

 
309,142

Foreign
226,561

 
236,224

 
234,734

 
236,073

U.S. Treasury Bonds
6,559

 
6,627

 
6,664

 
6,683

 
582,054

 
612,891

 
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:
 
June 30, 2020
 
December 31, 2019
 
Gains
 
Losses
 
Gains
 
Losses
 
($000 omitted)
Municipal
2,434

 
1

 
1,649

 
2

Corporate
18,926

 
253

 
10,091

 
23

Foreign
9,680

 
17

 
2,362

 
1,023

U.S. Treasury Bonds
92

 
24

 
60

 
41

 
31,132

 
295

 
14,162

 
1,089



Debt securities as of June 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
69,702

 
70,474

After one year through five years
313,470

 
326,654

After five years through ten years
165,852

 
179,896

After ten years
33,030

 
35,867

 
582,054

 
612,891



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 June 30, 2020, were:
 
Less than 12 months
 
More than 12 months
 
Total
 
Losses
 
Fair values
 
Losses
 
Fair values
 
Losses
 
Fair values
 
($000 omitted)
Municipal
1

 
53

 

 

 
1

 
53

Corporate
253

 
7,618

 

 

 
253

 
7,618

Foreign

 

 
17

 
231

 
17

 
231

U.S. Treasury Bonds

 

 
24

 
1,022

 
24

 
1,022

 
254

 
7,671

 
41