10-Q 1 stc-20220930.htm Q3 2022 FORM 10-Q stc-20220930
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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 September 30, 2022
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 classTrading 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 filerSmaller 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 November 1, 2022, there were 27,127,013 outstanding shares of the issuer's Common Stock.



FORM 10-Q QUARTERLY REPORT
QUARTER ENDED SEPTEMBER 30, 2022
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 
 September 30,
Nine Months Ended 
 September 30,
 2022202120222021
 ($000 omitted, except per share)
Revenues
Title revenues:
Direct operations307,408 366,091 976,364 999,098 
Agency operations340,470 401,762 1,154,546 1,138,023 
Real estate solutions and other69,737 61,934 281,152 176,057 
Operating revenues717,615 829,787 2,412,062 2,313,178 
Investment income5,158 4,053 15,519 13,127 
Net realized and unrealized (losses) gains(6,374)2,887 (14,194)17,816 
716,399 836,727 2,413,387 2,344,121 
Expenses
Amounts retained by agencies280,517 329,906 951,555 935,861 
Employee costs195,057 197,587 610,286 555,451 
Other operating expenses151,208 152,587 502,966 415,864 
Title losses and related claims25,486 30,345 81,105 92,687 
Depreciation and amortization14,067 9,144 42,103 22,394 
Interest4,553 712 13,471 1,960 
670,888 720,281 2,201,486 2,024,217 
Income before taxes and noncontrolling interests45,511 116,446 211,901 319,904 
Income tax expense(10,783)(23,051)(48,376)(70,547)
Net income34,728 93,395 163,525 249,357 
Less income attributable to noncontrolling interests5,294 4,732 14,534 11,639 
Net income attributable to Stewart29,434 88,663 148,991 237,718 
Net income34,728 93,395 163,525 249,357 
Other comprehensive loss, net of taxes:
Foreign currency translation adjustments(15,300)(4,243)(22,861)(997)
Change in net unrealized gains and losses on investments(8,921)(2,183)(41,513)(10,330)
Reclassification adjustments for realized gains and losses on investments(385)(355)(687)(918)
Other comprehensive loss, net of taxes:(24,606)(6,781)(65,061)(12,245)
Comprehensive income10,122 86,614 98,464 237,112 
Less income attributable to noncontrolling interests5,294 4,732 14,534 11,639 
Comprehensive income attributable to Stewart4,828 81,882 83,930 225,473 
Basic average shares outstanding (000)27,113 26,873 27,031 26,803 
Basic earnings per share attributable to Stewart1.09 3.30 5.51 8.87 
Diluted average shares outstanding (000)27,371 27,238 27,359 27,090 
Diluted earnings per share attributable to Stewart1.08 3.26 5.45 8.78 
See notes to condensed consolidated financial statements.
3


CONDENSED CONSOLIDATED BALANCE SHEETS
 
 September 30, 2022 (Unaudited)
 
 December 31, 2021
 ($000 omitted)
Assets
Cash and cash equivalents320,933 485,919 
Short-term investments18,077 17,650 
Investments, at fair value:
Debt securities (amortized cost of $624,272 and $578,165)
582,461 589,772 
Equity securities87,166 89,442 
669,627 679,214 
Receivables:
Premiums from agencies43,426 45,428 
Trade and other65,620 75,079 
Income taxes9,395 5,420 
Notes5,995 1,124 
Allowance for uncollectible amounts(7,577)(7,711)
116,859 119,340 
Property and equipment:
Land2,545 2,545 
Buildings18,553 19,303 
Furniture and equipment220,224 216,261 
Accumulated depreciation(160,715)(165,653)
80,607 72,456 
Operating lease assets130,316 134,578 
Title plants, at cost73,358 76,859 
Investments on equity method basis4,341 4,754 
Goodwill961,726 924,837 
Intangible assets, net of amortization174,430 229,804 
Deferred tax assets4,328 3,846 
Other assets150,858 64,105 
2,705,460 2,813,362 
Liabilities
Notes payable446,372 483,491 
Accounts payable and accrued liabilities184,065 287,326 
Operating lease liabilities146,309 149,417 
Estimated title losses547,214 549,614 
Deferred tax liabilities23,999 48,779 
1,347,959 1,518,627 
Contingent liabilities and commitments
Stockholders’ equity
Common Stock ($1 par value) and additional paid-in capital
321,492 309,622 
Retained earnings1,090,938 974,800 
Accumulated other comprehensive income (loss):
Foreign currency translation adjustments(31,778)(8,917)
Net unrealized (losses) gains on debt securities investments(33,030)9,170 
Treasury stock – 352,161 common shares, at cost
(2,666)(2,666)
Stockholders’ equity attributable to Stewart1,344,956 1,282,009 
Noncontrolling interests12,545 12,726 
Total stockholders’ equity (27,123,388 and 26,893,430 shares outstanding)
1,357,501 1,294,735 
2,705,460 2,813,362 
See notes to condensed consolidated financial statements.
4


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Nine Months Ended 
 September 30,
 20222021
 ($000 omitted)
Reconciliation of net income to cash provided by operating activities:
Net income163,525 249,357 
Add (deduct):
Depreciation and amortization42,103 22,394 
Adjustments for bad debt provisions812 1,871 
Net realized and unrealized losses (gains)14,194 (17,816)
Amortization of net premium on debt securities investments1,870 2,794 
Payments for title losses less than provisions10,950 39,761 
Adjustments for insurance recoveries of title losses220  
Decrease (increase) in receivables – net9,521 (20,771)
Increase in other assets – net(4,343)(3,725)
Decrease in accounts payable and other liabilities – net(81,987)(30,385)
Change in net deferred income taxes25 7,024 
Net income from equity method investments(2,536)(6,852)
Dividends received from equity method investments3,135 5,496 
Stock-based compensation expense9,239 8,494 
Other – net312 (325)
Cash provided by operating activities167,040 257,317 
Investing activities:
Proceeds from sales of investments in securities47,954 19,726 
Proceeds from matured investments in debt securities28,754 68,653 
Purchases of investments in securities(165,130)(111,107)
Net (purchases) sales of short-term investments(1,632)2,734 
Purchases of property and equipment, and real estate(35,274)(26,213)
Proceeds from sale of property and equipment and other assets977 10,552 
Cash paid for acquisition of businesses(102,864)(149,921)
Cash paid for acquisition of equity method investment(69)(16,080)
Other – net1,941 988 
Cash used by investing activities(225,343)(200,668)
Financing activities:
Proceeds from notes payable38,012 331,755 
Payments on notes payable(75,505)(158,031)
Distributions to noncontrolling interests(14,863)(11,683)
Repurchases of Common Stock(3,168)(2,145)
Proceeds from stock option and employee stock purchase plan exercises5,799 2,715 
Cash dividends paid(32,464)(26,558)
Payment of contingent consideration related to acquisitions(15,997)(9,489)
Purchase of remaining interest in consolidated subsidiaries(72)(5,616)
Other - net115 (777)
Cash (used) provided by financing activities(98,143)120,171 
Effects of changes in foreign currency exchange rates(8,540)(1,898)
Change in cash and cash equivalents(164,986)174,922 
Cash and cash equivalents at beginning of period485,919 432,683 
Cash and cash equivalents at end of period320,933 607,605 
See notes to condensed consolidated financial statements.
5


CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

Common Stock
Additional paid-in capitalRetained earningsAccumulated other comprehensive income (loss)Treasury stockNoncontrolling interestsTotal
($000 omitted)
Nine Months Ended September 30, 2022
Balance at December 31, 202127,246 282,376 974,800 253 (2,666)12,726 1,294,735 
Net income attributable to Stewart— — 148,991 — — — 148,991 
Dividends on Common Stock ($1.20 per share)
— — (32,853)— — — (32,853)
Stock-based compensation155 9,084 — — — — 9,239 
Stock repurchases(49)(3,119)— — — — (3,168)
Stock option and employee stock purchase plan exercises124 5,675 — — — — 5,799 
Purchase of remaining interest in consolidated subsidiaries—  — — — (72)(72)
Change in net unrealized gains and losses on investments, net of taxes— — — (41,513)— — (41,513)
Reclassification adjustment for realized gains and losses on investments, net of taxes— — — (687)— — (687)
Foreign currency translation adjustments, net of taxes— — — (22,861)— — (22,861)
Net income attributable to noncontrolling interests— — — — — 14,534 14,534 
Distributions to noncontrolling interests— — — — — (14,863)(14,863)
Net effect of other changes in ownership— — — — — 220 220 
Balance at September 30, 202227,476 294,016 1,090,938 (64,808)(2,666)12,545 1,357,501 
Nine Months Ended September 30, 2021
Balance at December 31, 202027,080 274,857 688,819 17,022 (2,666)7,294 1,012,406 
Net income attributable to Stewart— — 237,718 — — — 237,718 
Dividends on Common Stock ($0.99 per share)
— — (27,009)— — — (27,009)
Stock-based compensation139 8,355 — — — — 8,494 
Stock repurchases(41)(2,104)— — — — (2,145)
Stock option and employee stock purchase plan exercises64 2,651 — — — — 2,715 
Purchase of remaining interest in consolidated subsidiary— (4,744)— — — (872)(5,616)
Change in net unrealized gains and losses on investments, net of taxes— — — (10,330)— — (10,330)
Reclassification adjustment for realized gains and losses on investments, net of taxes, net of taxes— — — (918)— — (918)
Foreign currency translation adjustments, net of taxes— — — (997)— — (997)
Net income attributable to noncontrolling interests— — — — — 11,639 11,639 
Distributions to noncontrolling interests— — — — — (11,683)(11,683)
Net effect of other changes in ownership— — — — — 2,426 2,426 
Balance at September 30, 202127,242 279,015 899,528 4,777 (2,666)8,804 1,216,700 
See notes to condensed consolidated financial statements.

6


CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

Common Stock
Additional paid-in capitalRetained earningsAccumulated other comprehensive income (loss)Treasury stockNoncontrolling interestsTotal
($000 omitted)
Three Months Ended September 30, 2022
Balances at June 30, 202227,390 288,834 1,073,788 (40,202)(2,666)12,677 1,359,821 
Net income attributable to Stewart— — 29,434 — — — 29,434 
Dividends on Common Stock ($0.45 per share)
— — (12,284)— — — (12,284)
Stock-based compensation29 2,770 — — — — 2,799 
Stock repurchases(12)(605)— — — — (617)
Stock option and employee stock purchase plan exercises69 3,017 — — — — 3,086 
Purchase of remaining interest in consolidated subsidiaries—  — — — (72)(72)
Change in net unrealized gains and losses on investments, net of taxes— — — (8,921)— — (8,921)
Reclassification adjustment for realized gains and losses on investments, net of taxes— — — (385)— — (385)
Foreign currency translation adjustments, net of taxes— — — (15,300)— — (15,300)
Net income attributable to noncontrolling interests— — — — — 5,294 5,294 
Distributions to noncontrolling interests— — — — — (5,380)(5,380)
Net effect of other changes in ownership— — — — — 26 26 
Balance at September 30, 202227,476 294,016 1,090,938 (64,808)(2,666)12,545 1,357,501 
Three Months Ended September 30, 2021
Balances at June 30, 202127,177 274,074 819,834 11,558 (2,666)6,096 1,136,073 
Net income attributable to Stewart— — 88,663 — — — 88,663 
Dividends on Common Stock ($0.33 per share)
— — (8,969)— — — (8,969)
Stock-based compensation8 2,607 — — — — 2,615 
Stock repurchases(2)(141)— — — — (143)
Stock option exercises59 2,475 2,534 
Change in net unrealized gains and losses on investments, net of taxes— — — (2,183)— — (2,183)
Reclassification adjustment for realized gains and losses on investments, net of taxes, net of taxes— — — (355)— — (355)
Foreign currency translation adjustments, net of taxes— — — (4,243)— — (4,243)
Net income attributable to noncontrolling interests— — — — — 4,732 4,732 
Distributions to noncontrolling interests— — — — — (4,430)(4,430)
Net effect of other changes in ownership— — — — — 2,406 2,406 
Balance at September 30, 202127,242 279,015 899,528 4,777 (2,666)8,804 1,216,700 
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 and nine months ended September 30, 2022 and 2021, and as of September 30, 2022, 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, 2021 filed with the Securities and Exchange Commission on February 28, 2022 (2021 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 $541.0 million and $523.5 million at September 30, 2022 and December 31, 2021, respectively. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $10.5 million and $41.4 million at September 30, 2022 and December 31, 2021, 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. Recently enacted Inflation Reduction Act. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the Act) that includes, among other provisions, changes to the U.S. corporate income tax system, including a 15% minimum tax based on book income of certain large corporations for tax years beginning after December 31, 2022 and a 1% excise tax on net repurchases of stock starting in 2023. Management is still in the process of evaluating the Act and its requirements, however it does not believe that the Act will have a material impact on the Company's consolidated financial statements.


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,
 2022202120222021
($000 omitted)
Title insurance premiums:
Direct209,477 248,738 646,760 687,369 
Agency340,470 401,762 1,154,546 1,138,023 
Escrow fees49,407 63,455 166,696 183,638 
Real estate solutions and abstract fees89,519 85,345 302,534 234,677 
Other revenues28,742 30,487 141,526 69,471 
717,615 829,787 2,412,062 2,313,178 


NOTE 3

Investments in debt and equity securities. As of September 30, 2022 and December 31, 2021, the net unrealized investment gains relating to investments in equity securities held were $8.0 million and $21.1 million, respectively (refer to Note 5).

The amortized costs and fair values of investments in debt securities are as follows:
 September 30, 2022December 31, 2021
 
Amortized
costs
Fair
values
Amortized
costs
Fair
values
 ($000 omitted)
Municipal30,759 30,119 34,739 36,323 
Corporate279,392 257,575 249,757 258,102 
Foreign297,490 278,511 287,240 288,883 
U.S. Treasury Bonds16,631 16,256 6,429 6,464 
624,272 582,461 578,165 589,772 

Foreign debt securities primarily consist of Canadian government, provincial and corporate bonds, United Kingdom treasury and corporate bonds, and Mexican government bonds.

Gross unrealized gains and losses on investments in debt securities are as follows:
 September 30, 2022December 31, 2021
 GainsLossesGainsLosses
 ($000 omitted)
Municipal2 642 1,585 1 
Corporate226 22,043 9,389 1,044 
Foreign92 19,071 3,285 1,642 
U.S. Treasury Bonds7 382 60 25 
327 42,138 14,319 2,712 

9


Debt securities as of September 30, 2022 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 less88,203 87,384 
After one year through five years355,367 333,584 
After five years through ten years155,555 140,592 
After ten years25,147 20,901 
624,272 582,461 

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, 2022, were:
 Less than 12 monthsMore than 12 monthsTotal
 LossesFair valuesLossesFair valuesLossesFair values
 ($000 omitted)
Municipal633 28,835 9 33 642 28,868 
Corporate17,822 224,128 4,221 29,888 22,043 254,016 
Foreign13,264 210,499 5,807 65,721 19,071 276,220 
U.S. Treasury Bonds323 13,116 59 951 382 14,067 
32,042 476,578 10,096 96,593 42,138 573,171 

The number of specific debt investment holdings held in an unrealized loss position as of September 30, 2022 was 355. Of these securities, 49 were in unrealized loss positions for more than 12 months. Gross unrealized investment losses at September 30, 2022 increased compared to December 31, 2021, primarily due to the market volatility influenced by higher interest rates and credit spreads during 2022. Since the Company does not intend to sell and will more likely than not maintain each investment security until its maturity or anticipated recovery in value, and no significant credit risk is deemed to exist, these investments are not considered as credit-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.

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, 2021, were:
 Less than 12 monthsMore than 12 monthsTotal
 LossesFair valuesLossesFair valuesLossesFair values
 ($000 omitted)
Municipal1 130   1 130 
Corporate588 42,231 456 12,014 1,044 54,245 
Foreign1,502 118,943 140 3,394 1,642 122,337 
U.S. Treasury Bonds8 477 17 508 25 985 
2,099 161,781 613 15,916 2,712 177,697 



10


NOTE 4

Fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. Under U.S. GAAP, there is a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs when possible.

The three levels of inputs used to measure fair value are as follows:
 
Level 1 – quoted prices in active markets for identical assets or liabilities;
Level 2 – observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and
Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

As of September 30, 2022, financial instruments measured at fair value on a recurring basis are summarized below:
Level 1Level 2
Fair value
measurements
 ($000 omitted)
Investments in securities:
Debt securities:
Municipal 30,119 30,119 
Corporate 257,575 257,575 
Foreign 278,511 278,511 
U.S. Treasury Bonds 16,256 16,256 
Equity securities87,166  87,166 
87,166 582,461 669,627 

As of December 31, 2021, financial instruments measured at fair value on a recurring basis are summarized below:
Level 1Level 2
Fair value
measurements
 ($000 omitted)
Investments in securities:
Debt securities:
Municipal 36,323 36,323 
Corporate 258,102 258,102 
Foreign 288,883 288,883 
U.S. Treasury Bonds 6,464 6,464 
Equity securities89,442  89,442 
89,442 589,772 679,214 

11


As of September 30, 2022 and December 31, 2021, Level 1 financial instruments consist of equity securities. Level 2 financial instruments consist of municipal, governmental, and corporate bonds, both U.S. and foreign. In accordance with the Company’s policies and guidelines which incorporate relevant statutory requirements, the Company’s third-party registered investment manager invests only in securities rated as investment grade or higher by the major rating services, where observable valuation inputs are significant. The fair value of the Company's investments in debt and equity securities is primarily determined using a third-party pricing service provider. The third-party pricing service provider calculates the fair values using both market approach and model valuation methods, as well as pricing information obtained from brokers, dealers and custodians. Management ensures the reasonableness of the third-party service valuations by comparing them with pricing information from the Company's investment manager.


NOTE 5

Net realized and unrealized gains. Realized and unrealized gains and losses are detailed as follows:
 Three Months Ended 
 September 30,
Nine Months Ended 
 September 30,
 2022202120222021
 ($000 omitted)
Realized gains183 2,615 3,460 10,695 
Realized losses(65)(47)(3,904)(2,516)
Net unrealized investment (losses) gains recognized on equity securities still held at end of period(6,492)319 (13,750)9,637 
(6,374)2,887 (14,194)17,816 

Realized gains and losses during the first nine months of 2022 included realized losses of $3.6 million from disposals of businesses, a $1.0 million gain from an acquisition contingent liability adjustment, and a $1.0 million realized gain related to a sale of a title plant copy.

Realized gains and losses during the third quarter 2021 included $2.5 million gain related to an acquisition contingent liability adjustment. Additionally, realized gains and losses for the first nine months of 2021 included $7.3 million of gains on sales of buildings and a $2.5 million loss related to a disposal of an equity method investment.

Investment gains and losses recognized related to investments in equity securities are as follows: