Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
PART IV
Exhibits and Financial Statement Schedules
Form 10-K Summary
Signatures
As used in this report, “we,” “us,” “our,” the “Company” and “Stewart” mean Stewart Information Services Corporation and our subsidiaries, unless the context indicates otherwise.
PART I
Item 1. Business
Founded in 1893, Stewart Information Services Corporation (NYSE:STC) (Stewart) is a customer-focused, global title insurance and real estate services company offering products and services through our direct operations, network of approved agencies and other companies within the Stewart family. One of the largest global title insurance companies and underwriters in the industry, Stewart provides services to homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies, real estate attorneys and home builders. Stewart also provides credit and real estate data services, property preservation and field services, valuation management services, online notarization and closing services, search services, home and personal insurance services, tax-deferred exchanges, and technology services to streamline the real estate process. Stewart is headquartered in Houston, Texas and operates primarily throughout the United States (U.S.) and has regional offices in Australia, Canada and the United Kingdom.
Our companies are industry leaders in the spaces they operate in and while each is unique in service offerings, they all share a common belief in providing a high level of services through team focus and customer-centric mindset. For more information on various Stewart companies and brands, refer to our website, www.stewart.com/en/about-stewart/stewart-brands.html.
We currently report our business in three segments: title insurance and related services (title), real estate solutions, and corporate . Refer to Note 18 to our audited consolidated financial statements and Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) for financial information related to our segments.
Title Segment
Title insurance and related services include the functions of searching, examining, closing and insuring the condition of the title to real property. The title segment also includes home and personal insurance services, Internal Revenue Code Section 1031 tax-deferred (Section 1031) exchanges, and digital customer engagement platform services.
Examination and closing . The purpose of a title examination is to ascertain the ownership of the property being transferred, debts that are owed on it and the scope of the title policy coverage. This involves searching for and examining documents such as deeds, mortgages, wills, divorce decrees, court judgments, liens, assessments and tax records.
At the closing or settlement of a sale transaction, the seller executes and delivers a deed to the new owner. The buyer typically signs new mortgage documents and closing funds are disbursed to the seller, the prior lender, real estate brokers, the title company and others. Certain documents, such as the deed and mortgage or deed of trust, are then recorded in the public records. A title insurance policy is generally issued to both the new lender and the owner at the closing of the transaction.
At the closing or settlement of a refinance transaction, the borrower executes and delivers a mortgage or deed of trust to the lender. The borrower typically signs the mortgage documents and closing funds are ordinarily disbursed to the prior lender, the title company and others. Certain documents are then recorded in the public records. A title insurance policy is generally issued to the new lender at the closing or recording of the transaction.
Title insurance policies . Lenders in the United States generally require title insurance as a condition to making a loan on real estate, including securitized lending, as this assures lenders of the priority of their lien position on the real estate property. Also, the purchasers of the real estate property want insurance to protect against claims that may arise against the title to the property. The face amount of the owner's policy is normally the purchase price in a purchase transaction, while the face amount of the lender's policy is the amount of the related loan when financing is involved in either a purchase or refinance transaction.
Title insurance is substantially different from other types of insurance. Fire, auto, health and life insurance policies protect against future losses and events. In contrast, title insurance generally insures against losses from past events and seeks to protect the policyholder or lender by eliminating covered risks through the examination and settlement process. In essence, subject to its exceptions, conditions and exclusions, an owner's title insurance policy provides a warranty to the policyholder that the title to the property is free from defects that might impair ownership rights, or in the case of a lender's policy, that there is priority of lien position. Most other forms of insurance provide protection for a limited period of time and, hence the policy must be periodically renewed. Title insurance, however, is issued for a one-time premium and the owner's policy provides protection for as long as the owner owns the property, or has liability in connection with the property, or a lender under its policy has its insured lien on the property. Also, a title insurance policy does not have a finite contract term, whereas most other lines of insurance have definite beginning and ending dates for coverage. Although an owner's title insurance policy provides protection for as long as the owner owns the property being covered, the title insurance company generally does not have information about which policies are still effective. Most other lines of insurance receive periodic premium payments and policy renewals thereby allowing the insurance company to know which policies are effective. In certain circumstances, we may provide post-policy coverage and we may provide coverage against certain known risks after analyzing the underwriting risks.
Losses . Losses on policies occur when a title defect is not discovered during the examination and settlement process and the policyholder makes a claim under the policy. Reasons for losses include, but are not limited to, forgeries, misrepresentations, unrecorded or undiscovered liens, the failure to pay off existing liens, mortgage lending fraud, mishandling or defalcation of settlement funds, issuance by independent agencies of unauthorized coverage and defending policyholders when covered claims are filed against an owner's or lender's interest in the property. Losses may also occur for coverage that we may provide under closing protection letters.
Some claimants seek damages in excess of policy limits. Those claims are based on various legal theories. We vigorously defend against spurious claims and provide protection for covered claims up to the limits set forth in the policy. We have from time-to-time incurred losses in excess of policy limits. Experience shows that most policy claims and claim payments are made in the first eight years after the policy has been issued, although claims can also be reported and paid many years later. By their nature, claims are often complex, vary greatly in dollar amounts and are affected by economic and market conditions, the specific facts of the individual claim and the legal environment existing at the time claims are processed.
Our liability for estimated title losses comprises estimates of both known claims and incurred but unreported claims expected to be paid in the future for policies issued as of the balance sheet date. The amount of our loss reserve represents the aggregate future payments (net of recoveries) that we expect to make on policy losses and in costs to settle claims. In accordance with industry practice, these amounts have not been discounted to their present values. Estimating future title loss payments is difficult due to the complex nature of title claims, the length of time over which claims are paid, the significant variance in dollar amounts of individual claims and other factors. The amounts provided for policy losses are based on reported claims, historical loss payment experience and the current legal and economic environment. Estimated provisions for current year policy losses are charged to income in the same year the related premium revenues are recognized. Annual provisions for policy losses also include changes in the estimated aggregate liability on policies issued in prior years.
Amounts shown as our estimated liability for future loss payments are continually reviewed by us for reasonableness and adjusted as appropriate. We have consistently followed the same basic method of estimating and recording our loss reserves for more than 30 years. As part of our process, we also obtain input from third-party actuaries regarding our methodology and resulting reserve calculations. While we are responsible for determining our loss reserves, we utilize this actuarial input to assess the overall reasonableness of our estimated reserves.
See Critical Accounting Estimates - Title Loss Reserves under Item 7 - MD&A for information on current year policy losses and consolidated balance sheet reserves.
Factors affecting revenues . Title insurance revenues are closely related to the level of activity in the real estate markets we serve and the prices at which real estate sales are made. Real estate sales are directly affected by the availability and cost of money to finance purchases. Other factors include consumer confidence, demand by buyers, foreign currency exchange rates, supply chains, inventory and weather. In periods of low interest rates, loan refinancing transactions are also an important contributor to revenues. These factors may override the seasonal nature of the title business. Generally, our first quarter is the least active and our second and third quarters are the most active in terms of title insurance revenues. Refer to Item 7 - MD&A, Results of Operations - Industry Data for comparative information on home sales, mortgage interest rates and loan origination activity, and Critical Accounting Estimates - Factors Affecting Revenues for additional details on principal factors affecting revenues.
Customers . The primary sources of title insurance business are attorneys, builders, developers, home buyers and home sellers, lenders, mortgage brokers, and real estate brokers and agents. Titles insured include residential and various asset classes of commercial properties, including but not limited to, energy-related projects, data centers, multi-family, industrial, retail, office, hotel, undeveloped acreage, farms and ranches.
Service, location, financial strength, company size, relationships and related factors affect customer orders. Increasing market share is accomplished primarily by providing superior service. The parties to a closing are concerned with accuracy, expertise, responsiveness, timeliness and cost. The rates charged to customers vary from state to state, and are regulated, to varying degrees and in different ways, in most states.
The financial strength and stability of the title underwriter are important factors in maintaining and increasing our business, particularly commercial business. We are rated as investment grade by the title industry’s leading rating agencies. Our wholly-owned and principal underwriter, Stewart Title Guaranty Company (Guaranty), is currently rated "A-" by Fitch Ratings Ltd., "A- " by A.M. Best, and “A Double Prime” by Demotech Inc. These ratings are not credit ratings. Instead, the ratings are based on quantitative, and in some cases qualitative, information and reflect the conclusions of the rating agencies with respect to our financial strength, results of operations and ability to pay policyholder claims.
Market share . Title insurance statistics are compiled quarterly by the American Land Title Association (ALTA), the title industry’s national trade association. Based on 2025 statutory premiums written through the nine months ended September 30, 2025, Guaranty is one of the leading title insurers in the United States. Our largest competitors are Fidelity National Financial, Inc. (Fidelity National Financial) whose principal underwriters are Fidelity National Title Insurance Company and Chicago Title Insurance Company, First American Financial Corporation (First American) which includes First American Title Insurance Company, and Old Republic Title Insurance Group (Old Republic) which includes Old Republic National Title Insurance Company. We also compete with other title insurer companies, as well as abstractors, attorneys who issue title opinions and attorney-owned title insurance funds. A number of homebuilders, financial institutions, real estate brokers and others own or control title insurance agencies, some of which issue policies underwritten by Guaranty.
Refer to "Title revenues by geographic location" within the Results of Operations discussion under Item 7 - MD&A for the breakdown of title revenues by major geographic location.
Regulations . Title insurance companies are subject to comprehensive state regulations covering premium rates, agency licensing, policy forms, trade practices, reserve requirements, investments and the transfer of funds between an insurer and its parent or its subsidiaries and any similar related party transactions. Kickbacks and similar practices are prohibited by most state and federal laws. See Item 1A - Risk Factors : Our Insurance Subsidiaries Must Comply With Extensive Government Regulations .
Real Estate Solutions Segment
The real estate solutions segment supports the real estate mortgage industry by primarily providing credit and real estate information services, property preservation and field services, valuation management services, online notarization and closing solutions, and search services. We provide these services through Informative Research, Equimine (which operates as PropStream), BatchLeads, BatchDialer, Mortgage Contracting Services, Stewart Valuation Intelligence, NotaryCam, Inc., and Signature Closers, LLC. These companies are integral to our goal of streamlining the real estate and loan transaction lifecycle through end-to-end, customer-focused and technology-based solutions.
Factors affecting revenues . As in the title segment, real estate solutions revenues are closely related to the level of activity in the real estate market, including interest rates, new or refinancing origination activity, and home sales volumes. Companies that compete with our real estate solutions businesses vary across a wide range of industries and include the major title insurance underwriters mentioned under “Title Segment - Market share” as well as other title agents, appraisal management companies, and real estate technology and business process outsourcing providers.
Customers . Customers for our real estate solutions products and services primarily include mortgage lenders and servicers, mortgage brokers, realtors, and mortgage and real estate investors. Many of the services and products offered by our real estate solutions business are used by professionals and intermediaries who have been retained to assist consumers with the sale, purchase, mortgage, transfer, recording and servicing of real estate transactions. To that end, timely, accurate and compliant services are critical to our customers since these factors directly affect the service they provide to their customers. Financial strength, scale, robust processes to ensure legal and regulatory compliance, marketplace presence, high quality customer support, and reputation as a reliable, compliant solution are important factors in attracting new business.
Corporate Segment
The corporate segment is primarily comprised of the parent holding company and our centralized support services departments.
General
Investment policies . Our investment portfolios primarily reside in Guaranty, our largest underwriter and domiciled in the U.S., and two of our other international regulated insurance underwriters. These underwriters maintain investments in accordance with certain statutory requirements for the funding of premium reserves and deposits, or, in the case of our international operations, for the maintenance of certain capital ratios required by regulators. The activities of the portfolios are overseen by investment committees comprised of certain senior executives. Their oversight includes such activities as policy setting, determining appropriate asset classes with different and distinct risk/return profiles so as to prudently diversify the portfolio, and approving and managing service vendors (investment managers and custodians). We also utilize the expertise of third-party investment advisors to maximize returns while managing risk. Our investment policies are designed to comply with regulatory requirements as applicable law imposes restrictions upon the types and amounts of investments that may be made by our regulated insurance subsidiaries. Further, our investment policies require that investments are managed with a view to balancing profitability, liquidity, and risks (such as interest rate risk, credit risk, currency rate risk and liquidity risk) and consideration of negative impacts to earnings per share and income taxes.
As of December 31, 2025, approximately 92% of our combined debt and equity securities investment portfolios consisted of fixed income securities. Also as of that date, approximately 96% of the fixed income investments are held in securities that are A-rated or higher, and substantially all of the fixed income portfolios are rated investment grade (percentages are based on the fair value of the securities). In addition to our debt and equity securities investment portfolios, we maintain certain money-market and other short-term investments. For more details on market risks related to our investment securities portfolio, refer to Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk .
Trademarks . We have developed and acquired numerous automated products and processes that are crucial to both our title and real estate solutions operations. These systems automate most facets of the real estate transaction. Among these trademarked products and processes are AgencySecure ® , AIM+ ® , ASK Services ® , BatchDialer ® , BatchLeads ® , Cloudvirga ® , eTitleSearch ® , NotaryCam ® , PropertyInfo ® , PropStream ® , StewartNow ® , Stewart Trusted Provider ® , SureClose ® , TitleSearch ® , Valuation Intelligence ® , and Virtual Underwriter ® . We consider these trademarks, which can be renewed every ten years, to be important to our business.
Human capital resources . As of December 31, 2025, we employed approximately 7,800 people, with approximately 6,000 employees located in the U. S. and approximately 1,800 employees located internationally. We consider our relationship with our employees to be critical to both our operations and performance. We are committed to developing, retaining, and motivating our employees, and we do so in a variety of ways.
Recruiting
Stewart is committed to recruiting strategies – policies, practices, decision-making and more – grounded in fairness, equity, and inclusivity. Stewart is an equal employment opportunity employer, and our commitment extends to all facets of employment.
Inclusion and belonging
Stewart is committed to an inclusive workplace that values all employees by providing a supportive professional work environment that is free of unlawful harassment and discrimination against any applicant or employee as protected by federal, state and local laws. All phases of employment, including, but not limited to, recruiting, selection, placement, promotion, transfer, benefits, training, rates of pay or other forms of compensation, and other terms and conditions of employment are guided by these laws and Company policies regarding conduct, including, but not limited to, Stewart’s Equal Opportunity Employer statement, Anti-Harassment policy, Human Rights policy and our Code of Business Conduct and Ethics. Stewart's Code of Business Conduct and Ethics is reviewed and acknowledged annually by our employees and our Board of Directors.
Our Culture Ambassadors, representing employees across the Company and the globe, partner with leadership to maintain focus on inclusion, and how it intersects with both wellness and community, continuing our commitment to providing an inclusive environment, both in the workplace and in our communities. Our Culture Ambassadors meet regularly to discuss critical topics, advise on important challenges our employees are facing and ensure we remain focused on supporting areas most important to our employees.
Learning and development
Stewart’s approach to talent development encourages continuous learning and professional development for all employees across the organization through transparency around job expectations, supported by deliberate goal setting, performance, coaching and feedback, which allows Stewart employees to take ownership of their careers and provides them with the resources needed to be successful in their current and future roles.
Compensation, benefits and well-being
Stewart cares about the health, safety, and well-being of our employees and their families, and provides a variety of valuable programs to improve and maintain their overall health, including physical, mental, social, emotional and financial wellness. Highlights of the key programs include, but are not limited to, health and welfare benefits, life and disability insurance, 401(k) plan match, employee stock purchase plan (ESPP) with a discount, wellness initiatives, paid sick, vacation, holidays and volunteer time off, local community based charitable programs, including employee volunteer opportunities, through The Stewart Title Foundation, Inc., and global employee appreciation and recognition.
Engagement and recognition
In partnership with an outside firm, we continued our commitment to listening and acting on employee feedback. Our global employee engagement survey results have continued to guide our path forward in keeping employees engaged, feeling valued, ensuring Stewart is a place where our employees are proud to work, and strengthening our relationship with the communities we serve. Based on the survey feedback received from our employees, we were recognized in the USA Today Top Workplaces program as a 2025 Top Workplace and the recipient of four Culture Excellence Awards for innovation, leadership, purpose and values, and work-life flexibility. Additionally, Forbes recognized Stewart as one of America's Best Employers for Company Culture and one of America's Best Employers for Women in 2025.
Available information . We electronically file annual, quarterly and other reports and information with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934, as amended (Exchange Act). Our electronic filings can be accessed at the SEC's website at www.sec.gov. We also make available upon written request, free of charge, or through our website (stewart.com), our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Code of Ethics and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
The references in this annual report on Form 10-K to our website address or any third party’s website address, including the SEC’s website, do not constitute incorporation by reference of the information contained in those websites and should not be considered part of this document unless otherwise expressly stated.
Transfer agent . Our transfer agent is Computershare, which can be contacted via regular mail at P.O. Box 43078, Providence, RI 02940-3078 and via its website (https://www-us.computershare.com/investor).
CEO and CFO certifications . The CEO and CFO certifications required under Section 302 of the Sarbanes-Oxley Act are filed as exhibits to our 2025 Form 10-K. During 2025, Stewart completed its annual CEO Certification under Section 303A.12(a) of the New York Stock Exchange (NYSE) Listed Company Manual.
Item 1A. Risk Factors
You should consider the following risk factors, as well as the other information presented in this report and our other filings with the SEC, in evaluating our business and any investment in Stewart. These risks could materially and adversely affect our business, financial condition and results of operations. In that event, the trading price of our Common Stock could decline materially.
Strategic Risk Factors
Acquisitions or strategic investments we have made or may make could turn out to be unsuccessful.
As part of our investment and growth strategy, we frequently monitor and analyze opportunities to acquire or make a strategic investment in new or other businesses where we believe we can have sustained success and improve Stewart’s scale and profitability. The negotiation of potential acquisitions or strategic investments as well as the integration of an acquired business or new personnel, could result in a substantial diversion of management resources. Future acquisitions could likewise involve numerous additional risks such as potential losses from unanticipated litigation or levels of claims and inability to generate sufficient revenue to offset acquisition costs. Additionally, certain of the investments that we frequently make are in regulated entities that are required to comply with various governmental regulatory requirements, which may impose significant costs on such entities or otherwise impact the value of our investments therein. As we pursue or consummate a strategic transaction or investment, we may value the acquired or funded company or operations incorrectly, fail to integrate the acquired operations appropriately into our own operations, fail to successfully manage our operations as our product and geographical diversity increases, expend unforeseen costs during the acquisition or integration process, or encounter other unanticipated risks or challenges. If we succeed in consummating a strategic investment, we may fail to value it accurately or divest it or otherwise realize the value which we originally invested or have subsequently reflected in our consolidated financial statements. Any failure by us to effectively limit such risks or implement our acquisitions or strategic investment strategies could have a material adverse effect on our business, financial condition or results of operations.
Innovations and title insurance waivers and alternatives introduced by real estate industry participants, including our competitors, lenders and investors may be potentially disruptive and could adversely affect Stewart.
Various initiatives and alternatives to traditional title insurance and settlement products and services are or may be introduced by real estate industry participants, including our competitors, lenders and investors, which may change the demand for our products and services, the manner our products and services are ordered or fulfilled, and the revenue or profitability derived from our products and services. Innovation initiatives include implementing advanced technologies, use of artificial intelligence (AI), processes and techniques to automate and streamline certain manual processes during title search, insurance policy issuance and real estate transaction settlement to improve the manner and timeliness of delivering products and services, increase efficiency, reduce costs, improve product and service quality and customer experience, and enhance risk management. The title insurance industry may experience increased competition and disruption from alternative title products and government initiatives. Title insurance waivers and alternatives to title insurance policies, such as an attorney opinion letter which may not provide the same level of protection as traditional title policies but may be a more cost-effective option, may become widely used and accepted which can affect the demand for our products and services.
Further, in developing and implementing our own innovation initiatives, we have made and will likely continue to make significant investments. Depending on factors relating to our operations, the real estate industry and the macroeconomic environment, these innovative investments may not be successful, may result in increased claims, damage to our reputation or other material impacts on Stewart, or could disrupt our business operations by significantly diverting management's attention.
Rapid changes in our industry require secure, timely and cost-effective technological responses. Our earnings may be adversely affected if we are unable to effectively use technology to address regulatory changes and increase productivity.
We believe that our future success depends, in part, on our ability to anticipate changes in the industry and to offer products and services that meet evolving standards on a timely and cost-effective basis. To do so requires a flexible and secure technology architecture, such as title production systems, which can continuously comply with changing regulations, improve productivity, lower costs, reduce risk and enhance the customer experience. Further, the regulatory landscape surrounding the use of AI is rapidly evolving and remains uncertain, with potential for new laws, regulations or industry standards that could restrict the use of AI systems, impose compliance obligations, or result in enforcement actions or litigation. Our adoption of new technologies may be hindered by the development of industry-wide standards and an evolving legal and regulatory landscape. Inability to meet these requirements and any unanticipated downtime in our technology may have a material adverse effect on our earnings.
Stewart’s risk management program may not effectively assess, identify, and manage risks, which could negatively impact our business, financial condition and results of operations.
Stewart has an enterprise risk management (ERM) program to assess, identify, and manage risks. Our ERM program involves risk management policies and procedures that operate in various functions across our organization. The risk management function is overseen broadly by our cross-functional ERM committee, but the nature of our business requires us to also rely, to some degree, on localized risk mitigation efforts. This is particularly true with respect to certain risks inherent in the process of underwriting title insurance policies and providing certain related services, which may involve a significant degree of individual judgment. Although we have policies, procedures and tools in place to mitigate these and other identified risks, these aspects of our ERM may not be sufficient to address the risks inherent in our business. Additionally, while we regularly update and evaluate our risk management policies and procedures, our existing ERM program may not successfully identify and mitigate emerging risks to our business. If our ERM program does not adequately address the risks related to our business, our financial condition and results of operations may be adversely impacted.
Operational Risk Factors
Adverse changes in economic conditions, especially those affecting the levels of real estate and mortgage activity, may reduce our revenues.
Our financial condition and results of operations are affected by changes in economic conditions, particularly mortgage interest rates, credit availability, real estate prices and consumer confidence. Our revenues and earnings have fluctuated in the past due to the cyclical nature of the housing industry, and we expect them to continue to fluctuate in the future.
The demand for our title insurance-related and real estate solutions offerings is dependent primarily on the volume of residential and commercial real estate transactions. The volume of these transactions historically has been influenced by such factors as mortgage interest rates, inventory, affordability, availability of financing and the overall state of the economy. Typically, when interest rates are increasing or when the economy is experiencing a downturn, real estate activity declines. As a result, the title insurance industry tends to experience decreased revenues and earnings, and potentially increased claims experience.
Our revenues and results of operations have been and may in the future be adversely affected by a decline in home prices, real estate activity and the availability of financing alternatives. Deterioration in the macroeconomic environment generally causes weakness or adverse changes in the level of real estate activity, which could have a material adverse effect on our consolidated financial condition or results of operations, including impairment of our goodwill and long-lived assets. Also, we may not be able to accurately predict the effects of periods or expectations of high or rapidly rising inflation rates, and governmental responses thereto, and may not respond in a timely or adequate manner to mitigate the negative effects of such inflation, such as decreases in the demand for our products and services and higher labor and other expenses.
Our claims experience may require us to increase our provision for title losses or to record additional reserves, either of which would adversely affect our earnings.
We estimate our future loss payments (net of recoveries), and our assumptions about future losses may prove inaccurate. Provisions for policy losses on policies written within a given year are charged to income in the same year the related premium revenues are recognized. The amounts provided are based on reported claims, historical loss payment experience and the current legal and economic environment. Losses that are higher than anticipated are an indication that total losses for a given policy year may be higher than originally calculated. Changes in the total estimated future loss for prior policy years are recorded in the period in which the estimate changes. Claims are often complex and involve uncertainties as to the dollar amount and timing of individual payments. Claims are often paid many years after a policy is issued. From time-to-time, we experience large losses, including losses from independent agency defalcations, wire fraud, title policies that have been issued or worsening loss payment experience, any of which may require us to increase our title loss reserves. These events are unpredictable and may have a material adverse effect on our earnings.
The issuance of our title insurance policies and related activities by title agents, which operate with substantial independence from us, could adversely affect our operations.
Our principal underwriter, Guaranty, issues a significant portion of its policies through independent title agents. There is no guarantee that these title agents will fulfill their contractual obligations to us as contemplated, although such contracts include limitations that are designed to limit our risk with respect to their activities. In addition, regulators are increasingly seeking to hold title companies responsible for the actions of these title agents and, under certain circumstances, the Company may be held liable directly to third parties for actions (including defalcations) or omissions of these agents. Case law in certain states also suggests that the Company is liable for the actions or omissions of its agents in those states, regardless of contractual limitations. As a result, the Company’s use of title agents could result in increased claims on the Company’s policies issued through agents and an increase in other costs and expenses.
Competition in the title insurance industry may affect our revenues.
Competition in the title insurance industry is intense, particularly with respect to price, service and expertise. Larger commercial customers and mortgage originators also look to the size and financial strength of a title insurer. Although we are one of the leading title insurance underwriters based on market share, Fidelity National Financial, First American and Old Republic each has substantially greater gross revenues than we do and their holding companies have significantly greater capital. Further, other title insurance companies, collectively, hold a considerable share of the market. Although we are not aware of any current initiatives to reduce regulatory barriers to entering our industry, any such reduction could result in new competitors, including financial services firms or institutions, entering the title insurance business. From time-to-time, new entrants enter the marketplace with alternative products to traditional title insurance, although many of these alternative products have been disallowed by title insurance regulators. Further, advances in technologies, including technology such as AI and machine learning, could, over time, significantly disrupt the traditional business model of financial services and real estate-related companies, including title insurance. These alternative products or disruptive technologies, if permitted by regulators, could have a material adverse effect on our revenues and earnings.
Information technology (IT) systems present potential targets for cybersecurity attacks.
Our operations are reliant on technology and data. Our IT systems and our vendors' IT systems are used to store and process sensitive information regarding our operations and financial position as well as any information pertaining to our customers and vendors. While we take strong precautions, we cannot guarantee safety from all cyber threats, IT system or software vulnerabilities, wire fraud and attacks to our systems, or our ability to timely detect cyber incidents. Any successful breach of security could result in loss of sensitive data, spread of inaccurate or confidential information, disruption of operations, theft of escrowed funds, endangerment of employees, damage to our assets and increased costs to respond. Although we maintain cyber liability insurance to help protect us financially, there is no assurance that the instances noted above would not have a negative impact on cash flows, litigation status and/or our reputation, which could have a material adverse effect on our business, financial condition and results of operations. Refer to Part I, Item 1C. Cybersecurity for our policies and procedures in place to address cybersecurity risks.
Errors and fraud relating to fund transfers may adversely affect us.
The Company relies on its systems, employees and banks to transfer its own funds and the funds of third parties. These transfers are susceptible to user input error, fraud, system interruptions and other similar errors that, from time to time, result in lost funds or delayed transactions. Our email and computer systems, and systems used by other parties involved in a transaction have been subject to and are likely to continue to be the target of fraudulent attacks, including attempts to cause us or the other parties to improperly transfer funds. Funds transferred to a fraudulent recipient are often not recoverable and in certain instances, we may be liable for those unrecovered funds. Our controls and procedures in place to prevent transfer errors and fraud may prove inadequate and may result in financial losses, harm to our reputation, loss of customers or other adverse consequences which could be material to Stewart.
It may become difficult to acquire necessary data used in our business, or we may experience increased costs related to acquiring and utilizing such data.
The nature of our business requires us to obtain and utilize certain data. Such data is often subject to laws and regulations that govern its use, which impose significant compliance burdens on us and the suppliers of such data. To the extent additional laws and regulations impacting the data we use are implemented, we may experience increased costs of compliance, and it could become more difficult for us to obtain such data in the future. Additionally, if we fail to adequately secure and store the data that we use, we may suffer reputational harm or become subject to litigation or regulatory action, which could have a material adverse effect on our business, financial condition and results of operations.
Failure to attract, develop, and retain qualified personnel could adversely affect our business.
Our success depends, in part, on our ability to attract, develop and retain experienced and skilled personnel. The market for individuals with the requisite skills and experience is highly competitive. The loss of key employees or an inability to attract qualified new personnel in a timely manner could adversely affect our business, financial condition and results of operations.
Climate change and extreme weather events could adversely affect our operations and financial performance.
Our operations and financial performance could be adversely impacted by climate change and extreme weather events, especially if these occurrences negatively impact the overall real estate market and the broader economy. With respect to our investment portfolio, both individual corporate securities, as well as securities issued by municipalities could also see their value affected by such events. Given the unpredictable and uncertain nature of climate change and weather with respect to size, severity, frequency, geography, and duration, we are unable to quantify the true impact these events would have on our business and operations. As part of our emergency response management, we have an enterprise-wide business continuity program and disaster recovery plan to ensure continued operations of critical services in the event of a disruption to regular operations. Also, as a result of the growing importance that climate change has on both the Company’s operations as well as society in general, Stewart is committed to caring for the health of the global environment. The Company will also continue to update investors on the progress it is making to positively contribute to environmental preservation. Environmental-related documents can be found in the Investor Relations - Governance section of the Company's website.
Widespread health crises could adversely impact our business operations.
Widespread health crises and responses to such events could adversely affect the Company. Although the title insurance industry has been deemed essential in the United States, health crises and measures to address them may cause disruptions in the real estate market and on our business operations. These disruptions, which may include, among others, decreased volume of orders and other business activity, delayed closing of real estate transactions, office closures, and decreased value of investments and other assets, may significantly impact our future results of operations and financial position.
Regulatory and Compliance Risk Factors
A downgrade of our underwriters by rating agencies may reduce our revenues.
Ratings are a significant component in determining the competitiveness of insurance companies with respect to commercial title policies. Guaranty, our principal underwriter, has historically been highly rated by the rating agencies that cover us. These ratings are not credit ratings. Instead, the ratings are based on quantitative, and in some cases qualitative, information and reflect the conclusions of the rating agencies with respect to our financial strength, results of operations and ability to pay policyholder claims. Our ratings are subject to continual review by the rating agencies, and we cannot be assured that our current ratings will be maintained. If our ratings are downgraded from current levels by the rating agencies, our ability to retain existing customers and develop new customer relationships may be negatively impacted, which could result in a material adverse impact on our consolidated financial condition or results of operations.
Our insurance subsidiaries must comply with extensive government regulations. These regulations and the enforcement environment could adversely affect our ability to increase our revenues and operating results.
The Consumer Financial Protection Bureau (CFPB) is charged with protecting consumers by enforcing federal consumer protection laws and regulations. The CFPB is an independent agency and funded by the United States Federal Reserve System. Its jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage servicing operations, foreclosure relief services, debt collectors and other financial companies. The nature and extent of these regulations include, but are not limited to: conducting rule-making, supervision, and enforcement of federal consumer protection laws; restricting unfair, deceptive, or abusive acts or practices; marshalling consumer complaints; promoting financial education; researching consumer behavior; monitoring financial markets for new risks to consumers; and enforcing laws that outlaw discrimination and other unfair treatment in consumer finance. The current leadership of the CFPB has begun to rescind or revise many regulations, as well as to narrow its enforcement and supervision. We cannot currently predict the nature and timing of future developments that may potentially impact CFPB rules, proposals, enforcement and supervision.
Governmental authorities regulate our insurance subsidiaries in the various states and international jurisdictions in which we do business. These regulations generally are intended for the protection of policyholders rather than stockholders. The nature and extent of these regulations vary from jurisdiction to jurisdiction, but typically involve:
• approving or setting insurance premium rates;
• setting standards of solvency and minimum amounts of statutory capital and surplus that must be maintained;
• placing limits on types and amounts of investments;
• establishing reserves, including statutory premium reserves, for losses and loss adjustment expenses;
• regulating underwriting and marketing practices;
• regulating dividend payments and other transactions among affiliates;
• approving the acquisition and control of an insurance company or of any company controlling an insurance company;
• licensing of insurers, agencies and, in certain states, escrow officers;
• regulating reinsurance;
• restricting the size of risks that may be insured by a single company;
• requiring deposits of securities for the benefit of policyholders;
• approving policy forms;
• approving and prescribing methods of accounting; and
• filing of annual and other reports with respect to financial condition and other matters.
These regulations may impede or impose burdensome conditions on rate increases or other actions that we might want to take to enhance our operating results. In addition, state regulators perform periodic examinations of insurance companies, which could result in increased compliance or legal expenses.
We may also be subject to additional state or federal regulations prescribed by legislation such as the Dodd-Frank Act or by regulations issued by the CFPB, Department of Labor, Office of the Comptroller of the Currency, Occupational Safety and Health Administration, Department of the Treasury or other agencies. Additionally, we have in the past and may in the future be subject to investigations or inquiries from regulators, including state attorneys general. We incur costs as a result of such investigations or inquiries, including increased compliance costs, which may impact our operating results.
Finally, changes in regulations or new regulations in our industry may be introduced that could have a material adverse effect on our business or result in increased costs of compliance.
Dividends from our insurance underwriting subsidiaries are an important source for capital planning.
We are a holding company and we receive dividends from our insurance subsidiaries and unregulated subsidiaries to pay our parent company's operating expenses, debt service obligations and dividends to our common stockholders. While we may have adequate cash available in our parent company and unregulated subsidiaries to fund these obligations, we may depend on dividends from our insurance underwriting subsidiaries to meet cash requirements for acquisitions and other strategic investments. In regard to our insurance subsidiaries, the insurance statutes and regulations of some jurisdictions require us to maintain a minimum amount of statutory capital and restrict the amount of dividends that our insurance subsidiaries may pay to us. Refer to Note 3 to our audited consolidated financial statements and Item 7 - MD&A - Liquidity and Capital Resources for details on statutory surplus and dividend restrictions.
Financial Risk Factors
Availability and cost of credit may reduce our liquidity and negatively impact our ability to fund operations.
We expect that cash flows from operations and cash available from our underwriters, subject to regulatory restrictions, will be sufficient to fund our operations, pay our claims and fund operational initiatives. To the extent that these funds are not sufficient, we may be required to borrow funds on less than favorable terms or seek funding from the equity market, which may be on terms that are dilutive to existing stockholders. Increases in interest rates also increase the costs associated with borrowing on our floating rate line of credit facility. Refer to Note 9 to our audited consolidated financial statements for details on our existing line of credit facility.
Unfavorable economic or other business conditions could cause us to record an impairment of all or a portion of our goodwill, other intangible assets and other long-lived assets.
We perform annual impairment tests of the carrying values of our goodwill, other intangible assets and other long-lived assets. We may also perform an evaluation whenever events may indicate an impairment has occurred. In assessing whether an impairment has occurred, we consider whether the performance of our reporting units may be below projections, unexpected declines in our market capitalization, negative macroeconomic trends or negative industry and company-specific trends. We also perform reviews, at the asset group level, if carrying values of our long-lived assets are not recoverable. If we conclude that the carrying values of these assets exceed the fair value or are not recoverable, we may be required to record a noncash impairment of these assets. Any substantial impairment that may be required in the future could have a material adverse effect on our results of operations or financial condition.
Our investment portfolio is subject to interest rate and other risks and could experience losses.
We maintain a substantial domestic and foreign investment portfolio, primarily consisting of fixed income debt securities and, to a lesser extent, equity securities. Our portfolio holdings are subject to certain economic and financial market risks, including credit risk, interest rate risk, foreign exchange rate risk and liquidity risk. Instability in credit markets and economic conditions can increase the risk of loss in our portfolio. Periodically, we assess the recoverability of the amortized cost of our debt securities investments. If the amortized cost of such investments exceeds the fair value, and we conclude the decline is other-than-temporary, we are required to record an impairment. The impairment could have a material adverse effect on our results of operations or financial condition.
Claims by large classes of claimants may impact our financial condition or results of operations.
We are involved in litigation arising in the ordinary course of business. In addition, we may be, and have been in the past, subject to claims and litigation from large classes of claimants seeking substantial damages not arising in the ordinary course of business. Material pending legal proceedings not in the ordinary course of business, if any, would be disclosed in Part I, Item 3—Legal Proceedings . To date, the impact of the outcome of these proceedings has not been material to our consolidated financial condition or results of operations. However, an unfavorable outcome in any litigation, claim or investigation against us could have a material adverse effect on our consolidated financial condition or results of operations.
Failures at financial institutions at which we deposit funds could adversely affect us.
We deposit substantial fiduciary funds, which are third-party funds, and operating funds in many financial institutions in excess of insured deposit limits. In relation to fiduciary funds, we perform appropriate account titling and management which leaves the majority of accounts within insured limits. Those above the limits, which typically relate to large residential or commercial settlement transactions, are generally placed in well-capitalized financial institutions. In the event that one or more of these financial institutions fail, there is no guarantee that we could recover the deposited fun ds in excess of federal deposit insurance, and, as such, we could be held liable for the funds owned by or owed to third parties. Under these circumstances, our liability could have a material adverse effect on our results of operations or financial condition.
Risks Related to Our Common Stock
The price of our Common Stock historically has been volatile, which may affect the price at which our investors can sell their common stock.
The market price for our Common Stock varied in the year ended December 31, 2025, between a high price of $78.61 on November 25, 2025 and a low price of $56.39 on July 16, 2025. This volatility may affect the price at which investors in our Common Stock can sell their common stock. Our stock price may continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including those discussed herein; variations in our quarterly operating results from our expectations or those of securities analysts or investors; downward revisions in securities analysts’ estimates; and announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments.
Anti-takeover provisions in our charter and bylaws and Delaware law may delay or prevent an acquisition of our Company.
Our restated certificate of incorporation, bylaws and Delaware law contain provisions that may have the effect of delaying or preventing a change in control of us or changes in our management. Our restated certificate of incorporation and bylaws include provisions that:
• allow our board of directors to use, under certain circumstances, preferred stock as a method of discouraging, delaying or preventing a change of control of Stewart (by means of a merger, tender offer, proxy contest or otherwise);
• require a stockholder to submit written notice of any director nomination to our Corporate Secretary not less than ninety (90) days nor more than one-hundred and twenty (120) days prior to the anniversary of the immediately preceding annual meeting;
• allow our board of directors to adopt, amend or repeal our bylaws, subject to limitations under Delaware law;
• authorize additional common stock at such times, under such circumstances and with such terms and conditions as may impede a change in control of Stewart; and
• require that special meetings of stockholders be called only by the Chairman of our board of directors, Chief Executive Officer, board of directors, or at the request in writing of stockholders owning twenty-five percent (25%) or more of the entire capital stock of Stewart issued and outstanding and entitled to vote.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us in certain circumstances.
Any provision of our amended and restated certificate of incorporation or amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Common Stock, and could also affect the price that some investors are willing to pay for our Common Stock.
General Risk Factor
Our business could be disrupted as a result of a threatened proxy contest and other actions of activist stockholders.
We have previously been the subject of actions taken by activist stockholders. When activist activities occur, our business could be adversely affected because we may have difficulty in attracting and retaining customers, agents, mortgage lenders, servicers, employees and board members due to perceived uncertainties as to our future direction and negative public statements about our business; such activities may materially harm our relationships with current and potential customers, investors, lenders, and others; may otherwise materially harm our business, may adversely affect our operating results and financial condition; responding to proxy contests and other similar actions by stockholders is likely to result in our incurring substantial additional costs, including, but not limited to, legal fees, fees for financial advisors, fees for investor relations advisors, and proxy solicitation fees; significantly divert the attention of management, our Board of Directors and our employees; and changes in the composition of our Board of Directors due to activist campaigns may adversely affect our current strategic plan.
We cannot predict, and no assurances can be given as to, the outcome or timing of any matters relating to actions by activist stockholders or the ultimate impact on our business, liquidity, financial condition or results of operations.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Stewart recognizes the importance of protecting our customers', employees' and partners’ confidentiality and data integrity. To that end, we continuously and methodically evaluate cyber risks, how they evolve and how they may affect us. We utilize considerable resources in our cybersecurity efforts, and we are committed to continuous cybersecurity education and training across our entire organization as well as our partners and customers. We continuously evaluate and monitor third-party risk relating to the protection of sensitive data. Our program focuses on a broad area of security domains, including, but not limited to: risk management, data protection, incident response, identity and access management, threat and vulnerability management, disaster recovery, business resiliency, and continuity.
Risk assessment and management
Stewart has an enterprise risk management (ERM) program to assess, identify, and manage risks. Cybersecurity risks are evaluated alongside other critical business risks under the ERM program to align cybersecurity efforts with Stewart’s broader business goals and objectives. The cybersecurity risk is assigned to the Vice President, Information Technology (IT), who is a member of the ERM committee, for monitoring. The cybersecurity risk is also under the management oversight of Stewart's Senior Leadership Team.
Stewart takes a risk-based approach to cybersecurity, which begins with the identification and evaluation of cybersecurity risks that could affect Stewart’s operations, finances, legal or regulatory compliance, or reputation. Once identified, cybersecurity risks and related mitigation efforts are prioritized based upon their potential impact and likelihood. Risk mitigation strategies are developed and implemented based upon the specific nature of each cybersecurity risk. These strategies include the application of cybersecurity policies, procedures, and technologies, and employee training, education, and awareness. Additionally, Stewart’s cybersecurity program provides mechanisms for employees to report any unusual or potentially malicious activity.
Stewart is regularly assessed against the cybersecurity frameworks of the National Institute of Standards and Technology (NIST CSF) and also evaluated for compliance with the SSAE-18 Systems and Organization Controls (SOC) standards of the American Institute of Certified Public Accountants (AICPA).
Vendor risk management is an essential part of Stewart’s Enterprise Governance Risk and Compliance (GRC) program. Critical vendors, which include vendors that have access to personal information, are assessed and measured against standard security frameworks. Critical vendors are monitored for performance and compliance, and vendor security requirements are well defined and included with all master service agreements and contracts.
Incident response
In the event of a material breach or an information technology disruption, management has an incident response team in place to take immediate action, work with local and national law enforcement, and notify the appropriate regulators, our Board of Directors and impacted parties. In addition, we would work with our Disclosure Committee to disclose the scope, timing and effect of the breach or disruption through an appropriate Form 8-K filing, without providing information that could affect any law enforcement investigation.
Cybersecurity governance and board oversight
The Board is responsible for overseeing management’s assessment of significant risks facing Stewart. The Board approves management’s strategy to manage these risks and monitors management’s performance in implementing the strategy. Through February 25, 2026, the Board’s oversight of cybersecurity risks occurred at both the full Board level and at the Board committee level through the Audit Committee. Beginning February 26, 2026, the Board's oversight of cybersecurity risk will occur both at the full Board level and at the Board committee level through the Cybersecurity and Operations Technology Risk Committee.
The Board receives, at each regularly scheduled meeting, a risk report which includes an updated cybersecurity risk exposure assessment, a summary of existing cybersecurity controls and risk mitigations, and further planned controls and risk mitigation activities.
Through the first quarter 2026, our Chief Information Security Officer (CISO) has reported quarterly to the Audit Committee concerning Stewart’s cybersecurity program, operations, and other ad hoc updates. Beginning in the second quarter 2026, our CISO will report quarterly to the Cybersecurity and Operations Technology Risk Committee concerning those same matters. On a regular basis, management conducts a third-party assessment of Stewart's cybersecurity controls, the results of which were reported to the Audit Committee in 2025 and beginning in 2026, will be reported to the Cybersecurity and Operations Technology Risk Committee. Beginning in 2026, the Cybersecurity and Operations Technology Risk Committee will annually prepare and provide the Audit Committee with a report regarding material cybersecurity risks, including any cybersecurity incidents, compliance matters, or legal or regulatory issues that could reasonably be expected to impact the Company’s consolidated financial statements, disclosures or overall risk profile.
Management’s role
Stewart’s cybersecurity function is led by Stewart’s CISO, who reports to the Group President, Technology and Operations. The Group President, Technology and Operations, is responsible for all areas of Stewart’s digital business strategy, enterprise technology solutions, innovation, and global information technology. The CISO leads a holistic security program to defend enterprises against emerging threats. He has served in various roles in information technology and security leadership for over 30 years.
Management uses third party consultants , as necessary, to assist in assessing, identifying and managing risks from cybersecurity threats. Annually, senior management participates in tabletop exercises to assess its readiness responding to cybersecurity incidents. Our cybersecurity team routinely challenges our employees and tests the effectiveness of existing controls.
Risk from cybersecurity threats
While Stewart regularly defends against, responds to and mitigates risks from IT systems and software vulnerabilities, broader cybersecurity threats and data security incidents, as of the date of this report, Stewart has not identified any cybersecurity threats that have materially affected or are reasonably anticipated to have a material effect on the organization, h owever, there can be no guarantee that we will not experience such an incident in the future. Stewart experienced no known material cyber breaches during the three-year period ending December 31, 2025. For additional information concerning Stewart’s risks related to cybersecurity, see Item 1A. Risk Factors.
Item 2. Properties
We currently lease under a non-cancelable operating lease that expires in 2036, approximately 110,000 square feet of space in an office building in Houston, Texas, which is used for our corporate offices and for offices of several of our subsidiaries. We also lease space at approximately 440 locations for business operations, administrative and technology centers. These additional locations include significant leased facilities in Arizona (Phoenix and Scottsdale), New York (New York City), Illinois (Chicago), California (Glendale and Roseville), Texas (San Antonio), Nevada (Las Vegas), Virginia (Fairfax) and Colorado (Denver).
Our current leases expire through 2036 and we believe we will not have any difficulty obtaining renewals of leases as they expire or, alternatively, leasing comparable properties. The aggregate rent expense under all office leases was approximately $44.7 million in 2025.
We also own office buildings in Arizona, Texas, New Mexico, California, Florida and the United Kingdom. These owned properties are not material to our consolidated financial condition. We consider all buildings and equ ipment that we own or lease to be well maintained, adequately insured and generally sufficient for our purposes.
Item 3. Legal Proceedings
Information regarding our legal proceedings can be found in Note 16 to our audited consolidated financial statements, included in Part IV, Item 15 of this annual report on Form 10-K and is incorporated herein by reference.
Item 4. Mine Safety Disclosures
None.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market and Holders Information. Our Common Stock is listed on the NYSE under the symbol “STC”. As of February 16, 2026, the number of stockholders of record was approximately 4,300 and the closing price of one share of our Common Stock was $69.39.
Stock Performance Graph. The following table and graph compares the yearly percentage change in our cumulative total stockholder retur n on Common Stock with the cumulative total return of the Russell 2000 Index and the Russell 2000 Financial Services Sector Index for the five years ended December 31, 2025. The presented information assumes that the value of the investment in our Common Stock and each index was $100 at December 31, 2020 and that all dividends were reinvested.
Stewart
Russell 2000 Index
Russell 2000 Financial Services Sector Index
The performance graph above and the related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, as amended, except to the extent that the Company specifically incorporates it by reference into such filing.
Dividend Policy. Our current dividend policy anticipates the payment of quarterly dividends in the future. The declaration and payment of dividends will be at the discretion of our Board of Directors and will be dependent upon our future earnings, financial condition, capital requirements and restrictions under our credit agreements, and will also be subject to certain regulatory restrictions on the ability of Guaranty to distribute dividends to its parent company. Refer to Liquidity and Capital Resources .
Stock Repurcha ses. There were no stock repurchases during 2025, except for repurchases of approximately 55,900 shares (aggregate purchase price of approximately $3.9 million) related to statutory income tax withholding on the annual vesting of employee restricted share grants.
Item 6. Reserved.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)
MANAGEMENT'S OVERVIEW
Net income attributable to Stewart for 2025 was $115.5 million, or $4.05 per diluted share, compared to $73.3 million, or $2.61 per diluted share, in 2024. Pretax income before noncontrolling interests in 2025 was $165.6 million (5.7% pretax margin) compared to $114.3 million (4.6% pretax margin) in 2024. During 2025, total operating revenues increased 18% to $2.86 billion compared to $2.42 billion in 2024, while total expenses increased 16% to $2.76 billion, compared to $2.38 billion in 2024, primarily driven by higher revenues in the title and real estate solutions services operations. Refer to " Results of Operations " for detailed year-to-year income statement discussions, and " Liquidity and Capital Resources " for an analysis of Stewart's financial condition.
For the fourth quarter 2025, we reported net income attributable to Stewart of $36.3 million ($1.25 per diluted share), compared to net income attributable to Stewart of $22.7 million ($0.80 per diluted share) for the fourth quarter 2024. Fourth quarter 2025 pretax income before noncontrolling interests was $51.7 million (6.5% pretax margin) compared to pretax income before noncontrolling interests of $35.4 million (5.3% pretax margin) for the prior year quarter.
Fourth quarter 2025 results included $3.8 million of pretax net realized and unrealized losses, primarily recorded in the title segment, while the fourth quarter 2024 results included $1.7 million of pretax net realized and unrealized gains, comprised of $2.8 million net gains in the title segment and $1.1 million net losses in the corporate segment.
During the fourth quarter 2025, we completed the largest acquisition in Stewart history by acquiring Mortgage Contracting Services (MCS), an industry leader in providing property preservation and field services to mortgage servicers. This acquisition broadens Stewart's servicer customer base and expands our full suite of lender services. MCS is included in our real estate solutions segment. Refer to Note 8 to our audited consolidated financial statements for details.
Title segment . Summary results of the title segment are as follows (in $ millions, except pretax margin and % change):
For the Three Months
Ended December 31,
% Change
Operating revenues
Investment income
Net realized and unrealized (losses) gains
Pretax income
Pretax margin
Segment operating revenues in the fourth quarter 2025 increased $105.7 million, or 19%, driven by strong performances by our direct and agency title operations with operating revenue growth of 18% and 20%, respectively, compared to the fourth quarter 2024. Segment total operating expenses increased $85.9 million, or 16%, compared to the fourth quarter 2024 driven by the $43.9 million, or 19%, higher agency retention expenses and $40.3 million, or 15%, increased combined employee costs and other operating expenses, consistent with the title revenue growth. As a percentage of operating revenues, total title segment employee costs and other operating expenses improved to 47.0% in the fourth quarter 2025 compared to 48.7% in the prior year quarter, primarily due to increased title operating revenues.
Title loss expense in the fourth quarter 2025 increased $2.3 million, or 11%, compared to the fourth quarter 2024, primarily driven by higher title revenues. As a percentage of title operating revenues, title loss expense improved to 3.4% in the fourth quarter 2025 compared to 3.7% in the prior year quarter, primarily as a result of our continued overall favorable claims experience.
Direct title revenue information is presented below (in $ millions, except % change) :
For the Three Months
Ended December 31,
% Change
Non-commercial
Domestic
International
Commercial:
Domestic
International
Total direct title revenues
Domestic commercial revenues in the fourth quarter 2025 improved by $32.0 million, or 38%, primarily driven by increased sizes of commercial closed transactions, principally related to data center and energy asset classes, while domestic non-commercial revenues increased $17.7 million, or 11%, primarily driven by higher combined purchase and refinancing closed transactions and increased average fee per file compared to the prior year quarter. Fourth quarter 2025 average domestic commercial fee per file was $27,300, or 39% higher compared to $19,600 in the fourth quarter 2024, while average domestic residential fee per file improved 13% to $3,300, compared to $2,900 in the fourth quarter 2024. Total international revenues in the fourth quarter 2025 increased by $1.5 million, or 4%, primarily due to higher residential transaction volumes compared to the prior year quarter.
Real estate solutions segment . Summary results of the real estate solutions segment are as follows (in $ millions, except pretax margin and % change):
For the Three Months
Ended December 31,
% Change
Operating revenues
Pretax income
Pretax margin
The segment’s fourth quarter 2025 operating revenues improved $24.9 million, or 29%, primarily driven by our credit information services business. Combined employee costs and other operating expenses in the fourth quarter 2025 increased $21.6 million, or 27%, primarily due to increased costs of services related to revenue growth. The segment's pretax income included acquisition intangible asset amortization expenses of $5.6 million and $5.5 million in the fourth quarters 2025 and 2024, respectively.
Corporate segment . The segment's net expenses for the fourth quarter 2025 slightly increased to $10.1 million, compared to $9.7 million in the fourth quarter 2024, primarily due to higher interest expense on increased debt balances. The segment recorded a $1.1 million realized loss related to an investment impairment during the fourth quarter 2024.
CRITICAL ACCOUNTING ESTIMATES
Actual results can differ from our accounting estimates. While we do not anticipate significant changes in our estimates, there is a risk that such changes could have a material impact on our consolidated financial condition or results of operations for future periods. The discussion of critical accounting estimates below should be read in conjunction with the related accounting policies disclosed within Note 1 to our audited consolidated financial statements in Part IV of this annual report.
Title loss reserves
Provisions for title losses, as a percentage of title operating revenues, were 3.4%, 3.9% and 4.1% for the years ended December 31, 2025, 2024 and 2023, respectively. Actual loss payment experience, including the impact of large losses, is the primary reason for increases or decreases in our title loss provision. A 100 basis point change in the loss provisioning percentage, a reasonable scenario based on our historical loss experience, would have increased or decreased our provision for title losses, and affected pretax income by approximately $24.2 million for the year ended December 31, 2025.
We consider our actual claims payments (net of recoveries) and incurred loss experience, including the frequency and severity of claims, compared to our actuarial estimates of claims payments and incurred losses in determining whether our overall loss experience has improved or worsened relative to prior periods. We also consider the impact of economic or market factors on particular policy years to determine whether the results of those policy years are indicative of future expectations. In addition, large claims (those exceeding $1.0 million on a single claim), including large title losses due to independent agency defalcations, are analyzed and reserved for separately due to the potential higher dollar amount of loss, lower volume of claims reported and sporadic reporting of such claims. We evaluate the frequency and severity of large losses in determining whether our experience has improved or worsened. Our method for recording the reserves for title losses on both an interim and annual basis begins with the calculation of our current loss provision rate which is applied to our current premium revenues, resulting in a title loss expense for the period, except for large claims and escrow losses. This loss provision rate is set to provide for losses on current year policies and is primarily determined using moving average ratios of recent actual policy loss payment experience (net of recoveries) to premium revenues.
Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by our management and our third-party actuaries in estimating reserves. As a consequence, our ultimate liability may be materially greater or lower than current reserves and/or our third-party actuary’s calculated estimates.
Provisions for known claims arise primarily from prior policy years as claims are not typically reported until years after policies are issued. Provisions - Incurred But Not Reported (IBNR) are estimates of claims expected to be incurred over the next 20 years; therefore, it is not unusual or unexpected to experience changes to those estimated provisions in both current and prior policy years as additional loss experience on policy years is obtained. This loss experience may result in changes to our estimate of total ultimate losses expected (i.e., the IBNR policy loss reserve). Current year provisions - IBNR are recorded on policies issued in the current year as a percentage of premiums earned (loss provisioning rate). As claims become known, provisions are reclassified from IBNR to known claims. Adjustments relating to large claims may impact provisions either for known claims or for IBNR.
(in $ millions)
Provisions – Known Claims:
Current year
Prior policy years
Provisions – IBNR
Current year
Prior policy years
Transferred IBNR to Known Claims
Total provisions
In 2025, total provisions for known claims increased $12.6 million, or 15%, compared to 2024 as a result of the timing of claims reported and changes to large and non-large claims related to both current and prior policy years. Total provisions - IBNR in 2025 decreased $13.9 million, or 21%, compared to the prior year primarily due to our overall favorable claims experience. In 2024, total known provision claims decreased $5.2 million, or 6%, compared to 2023, primarily as a result of changes to existing large and non-large claims related to prior policy years, while total provisions - IBNR increased $1.7 million, or 2.7%, primarily due to increased title premiums in 2024. As a percentage of title operating revenues, current year provisions - IBNR were 2.0%, 2.7% and 2.6% in 2025, 2024 and 2023, respectively.
In addition to title policy claims, we incur losses in our direct operations from escrow, closing and disbursement functions. Escrow losses typically relate to errors or other miscalculations of amounts to be paid at closing, including timing or amount of a mortgage payoff, payment of property or other taxes and payment of homeowners’ association fees, and wire fraud. In those cases, the title insurer incurs the loss under its obligation to ensure that an unencumbered title is conveyed. These losses are recognized as expenses when discovered or when contingencies associated with them (such as litigation) are resolved and are typically paid less than 12 months after the loss is recognized.
Large title losses due to independent agency defalcations typically occur when the independent agency misappropriates funds from escrow accounts under its control. Such losses are usually discovered when the independent agency fails to pay off an outstanding mortgage loan at closing (or immediately thereafter) from the proceeds of the new loan. These incurred losses are typically more severe in terms of dollar value compared with traditional title policy claims since the independent agency is often able, over time, to conceal misappropriations of escrow funds relating to more than one transaction through the constant volume of funds moving through its escrow accounts. In declining real estate markets, lower transaction volumes result in a lower incoming volume of funds, making it more difficult to cover up the misappropriations with incoming funds. Thus, when the defalcation is discovered, it often relates to several transactions. In addition, the overall decline in an independent agency’s revenues, profits and cash flows increases the agency’s incentive to improperly utilize the escrow funds from real estate transactions. For each of the three years ended December 31, 2025, our net title losses due to independent agency defalcations were not material.
Internal controls relating to independent agencies include, but are not limited to, periodic audits, site visits and reconciliations of policy inventories and premiums. The audits and site visits cover examination of the escrow account bank reconciliations and an examination of a sample of closed transactions. In some instances, the scope of our review is limited by attorney agencies that cite client confidentiality. Certain states have mandated annual reviews of agencies by their underwriter. We also determine whether our independent agencies have appropriate internal controls as defined by ALTA's best practices and us. However, even with adequate internal controls in place, their effectiveness can be circumvented by collusion or improper override of the controls by management at the independent agencies. To aid in the selection of independent agencies to review, we have developed an agency risk model that aggregates data from different areas to identify possible issues. This is not a guarantee that all independent agencies with deficiencies will be identified. In addition, we are typically not the only underwriter for which an independent agency issues policies, and independent agencies may not always provide complete financial records for our review.
Goodwill impairment
Goodwill is not amortized, but is reviewed for impairment annually and whenever occurrences of events indicate a potential impairment at the reporting unit level. Refer to Note 1-L and Note 8 to our audited consolidated financial statements for details about our goodwill impairment review process and goodwill balances, respectively.
The valuation techniques performed in our quantitative analysis make use of our estimates and assumptions related to critical factors, which include revenue and operating margin growth rates, future market conditions, determination of market multiples and comparative companies, assignment of a control premium, and determination of risk-adjusted discount rates. Forecasts of future operations are based, in part, on actual operating results and our expectations as to future market conditions, which are inherently uncertain and difficult to project. In performing our analysis, we make assumptions and apply judgments to estimate industry economic factors and the future profitability of our businesses. Due to the uncertainty and complexity of performing the goodwill impairment analysis, future results related to market conditions and our business operations and other inputs to the analysis may be worse than estimated or assumed. In such cases, we may be exposed to future material impairments of goodwill.
For our annual goodwill impairment test for all our reporting units, we utilized the quantitative approach during 2025 and 2024 and concluded that there is no impairment of goodwill for any of our reporting units.
RESULTS OF OPERATIONS
We discuss in this section the consolidated results of operations for the years 2025 and 2024, as compared to each corresponding prior year. Factors contributing to fluctuations in our results of operations are presented in the order of their monetary significance, and significant changes are quantified, when necessary. Segment results are included in the discussions and are discussed separately, when relevant.
Industry data. Published U.S. mortgage interest rates and other selected residential housing data for the three years ended December 31, 2025 are shown below (amounts shown for 2025 are preliminary and subject to revision). The amounts below may not relate directly to or provide accurate data for forecasting our operating revenues or order counts. Our statements on home sales, mortgage interest rates and loan origination activity are based on averaged published industry data as of December 31, 2025 from sources including Fannie Mae and the Mortgage Bankers Association (MBA), when available.
Mortgage interest rates (30-year, fixed-rate) – %
Averages for the year
First quarter
Second quarter
Third quarter
Fourth quarter
Mortgage originations – $ billions
Refinancings – % of originations
Existing home sales – in millions
Existing home median sales price – in $ thousands
New home sales – in millions
New home median sales price – in $ thousands
In 2025, the average 30-year mortgage interest rate reached its lowest level in three years, influenced by several interest rate reductions by the federal government which started in late 2024. The average 30-year mortgage interest rate was 6.15% at the end of 2025, compared to 6.85% at the end of 2024 and a 23-year high of 7.79% during the fourth quarter 2023. Total loan dollar originations in 2025 improved 18% compared to 2024, primarily due to a 67% increase in refinancing transactions, with purchase lending volume improving by 4%. However, 2025 existing home sales remained flat to 2024, primarily as a result of the relatively elevated interest rates, tight inventory levels and affordability challenges caused by rising home prices. However, we are encouraged that existing home sales in December 2025 improved 5% (seasonally-adjusted) compared to November 2025, which was the strongest result in nearly three years, according to the National Association of Realtors (NAR).
For 2026, Fannie Mae and MBA expect existing homes sales to improve 7%, with the median existing home price remaining essentially unchanged. The average 30-year mortgage interest rate is forecast to improve to 6.2% in 2026 compared to 6.6% in 2025, and further decline to 6.1% in 2027. Total mortgage originations are expected to improve 15% in 2026, with refinancing and purchase transactions increasing 31% and 7%, respectively, while new homes sales are expected to improve 5% compared to 2025.
Factors affecting revenues. Our primary business is title insurance and settlement-related services. We close transactions and issue title policies on homes, commercial and other real properties located across the U.S. and international markets through policy-issuing offices, agencies and centralized title services centers. Our real estate solutions operations include credit and real estate information services, property preservation and field services, valuation management services, online notarization and closing services, and search services. The corporate segment includes our parent holding company and centralized support services departments. Refer to Item 1. Business for details.
The principal factors that contribute to changes in our operating revenues include:
• interest rates;
• availability of mortgage loans;
• number and average value of mortgage loan originations;
• ability of potential purchasers to qualify for loans;
• inventory of existing homes available for sale;
• ratio of purchase transactions compared with refinance transactions;
• ratio of closed orders to open orders;
• home prices;
• consumer confidence, including employment trends;
• demand by buyers;
• premium rates and related state regulations;
• foreign currency exchange rates;
• market share;
• ability to attract and retain highly productive sales associates;
• independent agency remittance rates;
• opening and integration of new offices and acquisitions;
• office closures;
• number and value of commercial transactions, which typically yield higher premiums;
• government or regulatory initiatives;
• acquisitions or divestitures of businesses;
• volume of distressed property transactions; and
• seasonality and/or weather.
Premiums are determined in part by the values of the transactions we handle. To the extent inflation or market conditions cause increases in the prices of homes and other real estate, premium revenues are also increased. Conversely, falling home prices cause premium revenues to decline. Home price changes may override the seasonal nature of the title insurance business. Historically, our first quarter is the least active in terms of title insurance revenues as home buying is generally depressed during winter months. Our second and third quarters are typically the most active as the summer is the traditional home buying season, and while commercial transaction closings are skewed to the end of the year, individually large commercial transactions can occur any time of the year. On average, title premium rates for refinance orders are lower compared to a similarly priced purchase transaction.
Title revenues. Direct title revenue information is presented below:
Year Ended December 31
Change
Percent Change
(in $ millions)
(in $ millions)
Non-commercial
Domestic
International
Commercial:
Domestic
International
Total direct title revenues
Direct title revenues improved 13% in 2025 compared to 2024, primarily due to growth in both commercial and non-commercial domestic revenues. Domestic commercial revenues in 2025 increased 35% compared to the prior year, driven by increased sizes and volume of commercial transactions, primarily related to data center, energy, retail and mixed-use asset classes. Total non-commercial domestic revenues in 2025 increased 6% compared to 2024, primarily as a result of higher combined purchase and refinancing closed transactions and increased average fee per file. Domestic commercial transactions closed improved 13%, while combined purchase and refinancing orders increased 1% in 2025 compared to 2024. Average domestic commercial fee per file in 2025 improved 18% to $19,300, compared to $16,300 in 2024, while average residential fee per file in 2025 improved 6% to $3,200, compared to $3,000 in the prior year. Total international revenues in 2025 improved $14.2 million, 11%, primarily due to overall higher transaction volumes compared to 2024.
Direct title revenues in 2024 improved 6% compared to 2023, primarily driven by increased commercial revenues resulting from increased commercial transactions and higher average transaction size in 2024. Total non-commercial domestic revenues in 2024 declined 3% compared to 2023, primarily as a result of lower total residential transactions influenced by the continued elevated interest rates and weaker existing home sales in 2024. Purchase closed orders during 2024 declined 8%, partially offset by an 8% improvement in refinancing closed orders compared to 2023. Average domestic commercial fee per file in 2024 was $16,300, which was 34% higher compared to 2023, while average residential fee per file in 2024 was $3,000, which was 7% lower compared to 2023, primarily due to lower purchase transaction mix in 2024. Total international revenues in 2024 improved $8.6 million, 7%, primarily due to higher transaction volumes in our Canadian and Australian operations compared to 2023.
Closed and opened orders information is as follows:
Year Ended December 31
Change
% Change
Opened Orders:
Commercial
Purchase
Refinance
Other
Total
Year Ended December 31
Change
% Change
Closed Orders:
Commercial
Purchase
Refinance
Other
Total
Gross revenues from independent agency operations (agency revenues) in 2025 improved $219.4 million, or 21%, compared to 2024, primarily driven by improved volumes in key agency states and commercial transactions. Gross agency revenues increased $57.2 million, or 6%, in 2024 compared to 2023, which was consistent with the performance of our direct title operations and trends of the overall real estate market during 2024. Net agency revenues (which are net of agency retention) increased $36.5 million (21%) and $5.9 million (3%) in 2025 and 2024, respectively, primarily consistent with the gross agency revenues trend. Refer further to the "Retention by agencies" discussion under Expenses below.
Title revenues by geographic location. The approximate amounts and percentages of consolidated title operating revenues for the last three years ended December 31, 2025 were as follows (amounts and percentages are rounded and may not foot as presented):
Year Ended December 31
Percentages
(in $ millions)
Texas
New York
International
Ohio
California
Florida
Michigan
All others
Real estate solutions revenues. Real estate solutions revenues are primarily comprised of revenues generated by our real estate solutions operations. These revenues increased $79.7 million, or 22%, in 2025 and increased $95.0 million, or 36%, in 2024, compared to corresponding prior periods, primarily due to increased revenues from our credit information and valuation management services businesses.
Investment income. Investment income improved $2.4 million, or 4%, in 2025 compared to 2024, primarily due to the higher interest income generated from increased cash, short-term investments and notes receivable balances in 2025. Investment income in 2024 increased $10.2 million, or 23%, compared to 2023, primarily due to higher interest income resulting from earned interest from eligible escrow balances which started mid-2023. Refer to Note 6 to our audited consolidated financial statements for additional details.
Net realized and unrealized gains. Refer to Note 6 to our audited consolidated financial statements for details.
Expenses. Our employee costs and certain other operating expenses are sensitive to inflation. An analysis of expenses is shown below:
Year Ended December 31
Change*
% Change
(in $ millions)
(in $ millions)
Amounts retained by independent agencies
As a % of agency revenues
Employee costs
As a % of operating revenues
Other operating expenses
As a % of operating revenues
Title losses and related claims
As a % of title revenues
*Amounts change may not add due to rounding.
Retention by agencies. Amounts retained by title agencies are based on agreements between agencies and our title underwriters. Amounts retained by independent agencies, as a percentage of revenues generated by them, averaged 83.0%, 82.9% and 82.5% during each of the three years ended December 31, 2025. The average retention rates during 2025 and 2024 were slightly elevated compared to 2023, primarily as a result of revenue growth from states with relatively higher retention rates in 2025 and 2024. The average retention percentage may vary from period to period due to the geographical mix of agency operations, the volume of title revenues and, in some states, laws or regulations. Due to the variety of such laws or regulations, as well as competitive factors, the average retention rate can differ significantly from state to state. In addition, a high proportion of our independent agencies are in states with retention rates greater than 80%. We continue to focus on increasing profit margins in every state, increasing premium revenue in states where remittance rates are higher, and maintaining the quality of our agency network, which we believe to be the industry’s best, in order to mitigate claims risk and drive consistent future performance. While market share is important in our agency operations channel, it is not as important as margins, risk mitigation and profitability.
Selected cost ratios (by selected segment). The following table shows employee costs and other operating expenses as a percentage of operating revenues for each of the title and real estate solutions segments for the years ended December 31:
Employee Costs
Other Operating Expenses
Title
Real estate solutions
Employee costs. Consolidated employee costs increased $85.2 million, or 11%, in 2025 compared to 2024, and increased $32.6 million, or 5%, in 2024 compared to 2023, primarily driven by higher salaries and employee benefits expenses related to a higher average employee count, and increased incentive compensation consistent with overall improved results during 2025 and 2024. Our total employee counts at December 31, 2025, 2024 and 2023 were approximately 7,800, 7,000 and 6,800 respectively. Average cost per employee for 2025 and 2024 increased 4% and 6%, respectively, compared to corresponding prior periods, primarily driven by higher incentive compensation and benefits expenses.
Employee costs for the title segment increased $77.0 million, or 11%, in 2025 and increased $28.5 million, or 4%, in 2024, primarily driven by higher average employee counts and increased incentive compensation compared to corresponding prior periods. Employee costs for the real estate solutions segments increased $7.9 million, or 14%, in 2025 and increased $5.3 million, or 11%, in 2024, primarily due to higher average employee counts compared to corresponding prior periods.
Other operating expenses. Other operating expenses include costs that are primarily fixed in nature, costs that follow, to varying degrees, changes in transaction volumes and revenues (variable costs) and costs that fluctuate independently of revenues (independent costs). Costs that are primarily fixed in nature include rent and other occupancy expenses, equipment rental, insurance, repairs and maintenance, technology costs and telecommunications expenses. Variable costs include third-party service and appraiser expenses related to real estate solutions operations, title outside search fees, attorney fee splits, credit losses (on receivables), copy supplies, delivery fees, postage, premium taxes and title plant maintenance expenses. Independent costs include general supplies, litigation defense, business promotion and marketing and travel.
Consolidated other operating expenses in 2025 and 2024 increased $110.7 million (18%) and $96.3 million (19%), respectively, primarily driven by higher real estate solutions service expenses and increased title outside search and premium tax expenses resulting from revenue growth compared to corresponding prior periods. Total other operating expenses, as a percentage of total operating revenues (other operating expenses ratio), were 25.0%, 24.9% and 22.9% during 2025, 2024 and 2023, respectively, with the higher ratios in 2025 and 2024 primarily driven by the increased size of our real estate solutions operations, which typically have higher other operating expenses.
During 2025, total variable costs increased $92.8 million, or 25%, primarily driven by higher service and appraiser expenses, and title outside search expenses resulting from improved revenues from real estate solutions and commercial services, respectively, compared to 2024. Costs that are primarily fixed in nature increased $4.4 million, or 2%, in 2025, primarily as a result of increased technology costs, while independent costs increased $13.5 million, or 25%, in 2025, primarily due to increased business promotion, marketing, and travel costs and file clean-up expenses.
During 2024, total variable costs increased $99.5 million, or 37%. compared to 2023, primarily driven by higher appraiser and service expenses and outside search expenses resulting from improved revenues from real estate solutions and commercial services, respectively. Costs that are primarily fixed in nature in 2024 were comparable with 2023, while independent costs decreased $3.1 million, or 5%, primarily due to lower office closure and litigation settlement expenses, partially offset by higher business promotion and marketing, and travel costs.
Title losses. Provisions for title losses, as a percentage of title operating revenues, were 3.4%, 3.9% and 4.1% in 2025, 2024 and 2023, respectively. The title loss ratio in any given year can be significantly influenced by changes in new large claims incurred, escrow losses and adjustments to reserves for existing large claims. We continue to manage and resolve large claims prudently and in keeping with our commitments to our policyholders.
Title losses in 2025 slightly increased (2%) compared to 2024, while title losses in 2024 were comparable to 2023, which were both primarily driven by our continued overall favorable claims experience in 2025 and 2024, which reduced the effect of increased title premiums in 2025 and 2024 compared to corresponding prior periods. Total claims payments in 2025 were $76.6 million, which was 10% lower compared to 2024, primarily due to lower payments on large claims related to prior year policies. Total claims payments in 2024 were $85.4 million, which was 18% lower compared to 2023, primarily due to decreased payments for both large and non-large claims related to prior policy years. Claims payments made on large title claims (net of recoveries) during 2025, 2024 and 2023 were $6.3 million, $14.9 million and $26.3 million, respectively.
Our liability for estimated title losses as of December 31, 2025 and 2024 comprises both known claims and our IBNR. Known claims reserves are reserves related to actual losses reported to us. Our reserve for known claims comprises both claims related to title insurance policies as well as losses arising from escrow closing and funding operations due to fraud or error (which are recognized as expense when discovered). The amount of the reserve represents the aggregate, non-discounted future payments (net of recoveries) that we expect to incur on policy and escrow losses and in costs to settle claims.
Total title policy loss reserve balances at December 31 were as follows:
(in $ millions)
Known claims
IBNR
Total estimated title losses
The actual timing of estimated title loss payments may vary since claims, by their nature, are complex and paid over long periods of time. Based on historical payment patterns, approximately 85% of the outstanding loss reserves are paid out within eight years. As a result, the estimate of the ultimate amount to be paid on any claim may be modified over that time period. Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by both our management and our third party actuaries in estimating reserves. As a consequence, our ultimate liability may be materially greater or less than current reserves and/or our third party actuary’s calculated estimates. As of December 31, 2025 and 2024, our reserve balance was above the actuarial midpoint of total estimated policy loss reserves. Refer to Note 10 (Estimated title losses) to our audited consolidated financial statements for details.
Depreciation and amortization . Total depreciation and amortization expense in 2025 was comparable to 2024, primarily due to the amortization and depreciation expenses related to acquired intangible assets and new internal-use systems placed into operations were offset by several assets becoming fully amortized during 2025. Total depreciation and amortization expense in 2024 was also comparable to 2023, primarily due to increased depreciation expenses related to new internal-use systems placed into operation being offset by lower acquisition intangible amortization expenses resulting from several assets becoming fully amortized. Acquisition intangible asset amortization expenses in 2025, 2024 and 2023 were $31.9 million, $32.1 million and $34.6 million, respectively.
Income taxes. Our effective tax rates for 2025, 2024 and 2023 were 24%, 26% and 33%, respectively, based on income before taxes (after deducting noncontrolling interests) of $150.9 million, $99.5 million and $45.7 million, respectively. The higher effective tax rate for 2023 was primarily due to the effect of non-deductible expenses on lower pretax income and higher foreign income contribution (which is taxed at a higher rate than domestic income) in 2023. Refer to Note 7 to our audited consolidated financial statements for details on the effective tax rates and income tax accounts.
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity and capital resources reflect our ability to generate cash flow to meet our obligations to stockholders, customers (payments to satisfy claims on title policies), vendors, employees, lenders and others. As of December 31, 2025, our total cash and investments, including amounts reserved pursuant to statutory requirements, aggregated $975.8 million. Of our total cash and investments at December 31, 2025, $540.5 million ($343.3 million, net of statutory reserves) was held in the United States (U.S.) and the rest internationally (principally in Canada).
As a holding company, the parent company is funded principally by cash from its subsidiaries' earnings in the form of dividends, operating and other administrative expense reimbursements and pursuant to intercompany tax sharing agreements. Cash held at the parent company and its unregulated subsidiaries (which totaled $150.3 million at December 31, 2025) is available for funding the parent company and its unregulated subsidiaries' operating expenses, and the parent company's interest payments on debt and dividend payments to common stockholders. The parent company also receives distributions from Guaranty, its regulated title insurance underwriter, to meet cash requirements for acquisitions and other strategic investments.
A substantial majority of our consolidated cash and investments as of December 31, 2025 was held by Guaranty and its subsidiaries. The use and investment of these funds, dividends to the parent company, and cash transfers between Guaranty and its subsidiaries and the parent company are subject to certain legal and regulatory restrictions. In general, Guaranty uses its cash and investments in excess of its legally-mandated statutory premium reserve (established in accordance with requirements under Texas law) to fund its insurance operations, including claims payments. Guaranty may also, subject to certain limitations, provide funds to its subsidiaries (whose operations consist principally of field title offices and real estate solutions operations) for their operating and debt service needs.
We maintain investments in accordance with certain statutory requirements for the funding of statutory premium reserves. Statutory reserve funds are required to be fully funded and invested in high-quality securities and short-term investments. Statutory reserve funds are not available for current claim payments, which must be funded from current operating cash flow. Included in investments in debt and equity securities are statutory reserve funds of approximately $492.0 million at December 31, 2025. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $4.4 million at December 31, 2025. 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. As of December 31, 2025, our known claims reserve totaled $84.8 million and our estimate of claims that may be reported in the future, under U.S. generally accepted accounting principles, totaled $439.7 million. In addition to this, we had cash and investments (at amortized cost and excluding equity method investments) of $257.2 million which are available for underwriter operations, including claims payments.
The ability of Guaranty to pay dividends to its parent is governed by Texas insurance law. The Texas Department of Insurance (TDI) must be notified of any dividend declared, and any dividend in excess of the greater of the statutory net operating income or 20% of surplus (which was approximately $165.4 million as of December 31, 2025) would be, by regulation, considered extraordinary and subject to pre-approval by the TDI (see Note 3 to our audited consolidated financial statements for details). Also, the Texas Insurance Commissioner may raise an objection to a planned distribution during the notification period. Guaranty’s actual ability or intent to pay dividends to its parent may be constrained by business and regulatory considerations, such as the impact of dividends on surplus and liquidity, which could affect its ratings and competitive position, the amount of insurance it can write and its ability to pay future dividends. Guaranty paid $173.0 million and $30.0 million in dividends to its parent during 2025 and 2024, respectively.
Contractual obligations. Our material contractual obligations at December 31, 2025 are composed primarily of our unsecured 3.6% Senior Notes (Senior Notes) and line of credit facility (and the related interest payments), operating leases, and reserves for estimated title losses. Refer to Note 9 (Notes payable and line of credit) and Note 14 (Leases) to our audited consolidated financial statements for details on the Senior Notes and line of credit facility, and operating leases, respectively. Refer to the Note 10 (Estimated title losses) to our audited consolidated financial statements and the Title losses section under Results of Operations for details on title losses.
Cash flows. As the parent company conducts no operations apart from its wholly-owned subsidiaries, the discussion below focuses on consolidated cash flows. Refer to the Consolidated statements of cash flows in the audited consolidated financial statements.
(in $ millions)
Net cash provided by operating activities
Net cash used by investing activities
Net cash provided (used) by financing activities
Operating activities. Our principal sources of cash from operations are premiums on title policies and revenue from title service-related transactions, real estate solutions and other operations. Our independent agencies remit cash to us net of their contractual retention. Our principal cash expenditures for operations are employee costs, operating costs and title claims payments.
Net cash provided by operations in 2025 increased by $70.1 million compared to 2024, primarily due to higher net income and lower payments on claims in 2025, while net cash provided by operations in 2024 increased by $52.6 million compared to the prior year, primarily due to higher net income and lower payments on claims in 2024. Although our business is labor intensive, we are focused on a cost-effective, scalable business model which includes utilization of technology, centralized back and middle office functions and business process outsourcing. We are continuing our emphasis on cost management, especially in light of the current economic environment due to elevated mortgage interest rates, specifically focusing on lowering unit costs of production and improving operating margins in our direct title and real estate solutions operations. Our plans to improve margins include additional automation of manual processes, further consolidation of our various systems and production operations, and full integration of acquisitions. We continue to invest in the technology necessary to accomplish these goals.
Investing activities. Cash used and provided by investing activities is primarily driven by proceeds from matured and sold investments, purchases of investments, capital expenditures and acquisition of businesses. During 2025, 2024 and 2023, total proceeds from securities investments sold and matured were $214.7 million, $130.6 million and $132.2 million, respectively; while cash used for purchases of securities investments was $112.1 million, $121.5 million and $78.0 million, respectively.
We used $370.0 million, $14.4 million and $25.1 million of cash during 2025, 2024 and 2023, respectively, for acquisitions of various real estate solutions and title businesses (which included our acquisition of MCS in 2025), consistent with our strategy of increasing scale, growth in key markets and broader technology and service offerings. We used $73.4 million, $40.5 million and $37.8 million of cash for purchases of property and equipment and other long-lived assets (including internal-use software development) during 2025, 2024 and 2023, respectively, while we used cash of $8.8 million, $31.6 million and $1.0 million during 2025, 2024 and 2023, respectively, for payments for cost-basis and other investments. We maintain investment in capital expenditures at a level that enables us to implement technologies for increasing our operational and back-office efficiencies, to pursue growth in key markets and for improving customer experience.
Financing activities and capital resources. Total debt and stockholders’ equity were $646.6 million and $1.7 billion, respectively, as of December 31, 2025. As of December 31, 2025, our total debt-to-equity and debt-to-capitalization ratios, excluding short-term loan agreements in connection with our Section 1031 tax-deferred property exchange (Section 1031) business, were approximately 39% and 28%, respectively. We recently renewed and increased our line of credit facility, from which we drew $200.0 million during the fourth quarter 2025. As of December 31, 2025, the outstanding balance of our Senior Notes was $446.2 million, while our line of credit facility had an outstanding balance of $200.0 million with a remaining borrowing capacity of $97.5 million (refer to Note 9 to our audited consolidated financial statements for details). The Senior Notes are rated "BBB" by Fitch Ratings Ltd. as of December 31, 2025.
During 2025, 2024 and 2023, payments on notes payable of $1.2 million, $3.4 million and $5.7 million, respectively, and notes payable additions of $1.2 million, $3.4 million and $3.5 million, respectively, were related to our Section 1031 business, which had an outstanding balance of $0.1 million at December 31, 2025.
During the fourth quarter 2025, we issued an aggregate of 2,185,000 new shares of Common Stock, which included shares purchased by the underwriters to the offering transaction. Total proceeds from the offering, net of issuance costs, was $140.8 million.
During 2025, we paid dividends of $2.05 per common share, compared to $1.95 and $1.85 per common share paid during 2024 and 2023, respectively. Beginning in the third quarter 2025, we increased our annual cash dividend to $2.10 per share. In aggregate, we paid total dividends of $58.5 million, $53.9 million and $50.5 million in 2025, 2024 and 2023, respectively.
Effect of changes in foreign currency rates. The effect of changes in foreign currency rates on the consolidated statements of cash flows was a net increase (decrease) in cash and cash equivalents of $3.2 million, $(4.5 million) and $1.0 million in 2025, 2024 and 2023, respectively. Our primary foreign currencies are the Canadian dollar and British pound, and, relative to the U.S. dollar, the value of the Canadian dollar and British pound generally appreciated in 2025 and 2023, while it declined during 2024.
We believe we have sufficient liquidity and capital resources to meet the cash needs of our ongoing operations, including consideration of the current economic and real estate environment created by elevated mortgage interest rates. However, we may determine that additional debt or equity funding is warranted to provide liquidity for achievement of strategic goals or acquisitions or for unforeseen circumstances. Other than scheduled maturities of debt, operating lease payments and anticipated claims payments, we have no material contractual commitments. We expect that cash flows from operations and cash available from our underwriters, subject to regulatory restrictions, will be sufficient to fund our operations, including title claims payments. However, to the extent that these funds are not sufficient, we may be required to borrow funds on terms less favorable than we currently have or seek funding from the equity market, which may not be successful or may be on terms that are dilutive to existing stockholders.
Other comprehensive income (loss). Unrealized gains and losses on available-for-sale securities investments and changes in foreign currency exchange rates are reported net of deferred taxes in accumulated other comprehensive income (loss), a component of stockholders’ equity, until realized. Refer to Note 1-H and Note 19 to our audited consolidated financial statements for details.
In 2025, net unrealized investment gains of $10.0 million, net of taxes, which increased our other comprehensive income, were primarily related to net increases in the fair values of our corporate and foreign bond securities investments, which resulted primarily from lower interest rates. Also in 2025, we recorded foreign currency translation gains of $11.5 million, net of taxes, which increased our other comprehensive income and were primarily driven by the appreciation of the Canadian dollar and British pound against the U.S. dollar.
In 2024, net unrealized investment gains of $6.6 million, net of taxes, which decreased our other comprehensive loss, were primarily related to net increases in the fair values of our corporate and foreign bond securities investments, primarily influenced by the federal government's reduction of interest rates. Also in 2024, we recorded foreign currency translation losses of $14.8 million, net of taxes, which increased our other comprehensive loss, which was primarily driven by the decline in value of the Canadian dollar and British pound against the U.S. dollar.
Off-balance sheet arrangements. We do not have any material source of liquidity or financing that involves off-balance sheet arrangements. We also routinely hold funds in segregated escrow accounts pending the closing of real estate transactions and have qualified intermediaries in tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code. The Company holds the proceeds from these transactions until a qualifying exchange can occur. In accordance with industry practice, these segregated accounts are not included on the balance sheet. See Note 15 to our audited consolidated financial statements included in Item 15 of Part IV of this report for details.
Forward-looking statements. Certain statements in this report are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and often address our expected future business and financial performance. These statements often contain words such as “may,” "expect," "anticipate," "intend," "plan," "believe," "seek," "will," "foresee" or other similar words. Forward-looking statements by their nature are subject to various risks and uncertainties that could cause our actual results to be materially different than those expressed in the forward-looking statements. These risks and uncertainties include, among other things, the following:
• the volatility of economic conditions, including economic changes that may result from new or increased tariffs, trade restrictions, prolonged federal government shutdowns or geopolitical tensions;
• adverse changes in the level of real estate activity;
• changes in mortgage interest rates, existing and new home sales, and availability of mortgage financing;
• our ability to respond to and implement technology changes, including the completion of the implementation of our enterprise systems;
• the impact of unanticipated title losses or the need to strengthen our policy loss reserves;
• any effect of title losses on our cash flows and financial condition;
• the ability to attract and retain highly productive sales associates;
• the impact of vetting our agency operations for quality and profitability;
• independent agency remittance rates;
• changes to the participants in the secondary mortgage market and the rate of refinancing that affects the demand for title insurance products;
• regulatory non-compliance, fraud or defalcations by our title insurance agencies or employees;
• our ability to timely and cost-effectively respond to significant industry changes and introduce new products and services;
• our ability to realize anticipated benefits of our previous acquisitions;
• the outcome of pending litigation;
• our ability to manage risks associated with potential cybersecurity or other privacy or data security breaches;
• the impact of changes in governmental and insurance regulations, including any future reductions in the pricing of title insurance products and services;
• our dependence on our operating subsidiaries as a source of cash flow;
• our ability to access the equity and debt financing markets when and if needed;
• effects of seasonality and weather; and
• our ability to respond to the actions of our competitors.
All forward-looking statements included in this report are expressly qualified in their entirety by such cautionary statements. We expressly disclaim any obligation to update, amend or clarify any forward-looking statements contained in this report to reflect events or circumstances that may arise after the date hereof, except as may be required by applicable law.
