Stewart Reports Best-Ever First Quarter Results

April 25, 2002

HOUSTON, /PRNewswire-FirstCall/ -- Stewart Information Services Corporation (NYSE: STC) reported its best-ever first quarter results in terms of revenues, earnings and orders. Earnings per share were near Stewart's all-time record first quarter.

Stewart reported net earnings for the three months ended March 31, 2002 of $11.3 million, compared to earnings of $3.1 million for the first quarter of 2001. On a diluted per share basis, net earnings were $.63 for the first quarter of 2002 compared to earnings of $.20 for the first quarter of 2001. Revenues in the first quarter increased 42 percent to $348 million from $246 million in the same period last year.

Cash flow from operations was $14.6 million and $10.2 million for the three months ended March 31, 2002 and March 31, 2001, respectively.

"We are pleased to have been included for the first time in the Fortune 1000 list this month," said Malcolm S. Morris, chairman and co-chief executive officer. "As reported previously, we were selected by Forbes as the best big insurance company in America -- posting the highest earnings per share growth rate in the listed insurance sector. We are now included in the S&P SmallCap 600 Index. Our management team will continue to build on positive performance, focusing on profits and return on equity."

Laurie Moore-Moore was added as an advisory director this past quarter. Moore-Moore is co-founder and co-editor of REAL Trends, a highly respected research and forecasting trend letter for the residential real estate industry. "Laurie Moore-Moore has her finger on the pulse of the residential real estate market," said Stewart Morris, Jr., president and co-chief executive officer. "We look forward to her insightful guidance as Stewart continues to develop e-marketing services and tools to help real estate professionals be more productive and profitable."

"Our core business, which is driven by housing sales, construction activity and commercial transactions, remained strong in the first quarter," said Stewart Morris, Jr. "Although slightly higher interest rates have dampened loan applications, the reduction has been in the lower revenue refinance line of business. The typical refinance title policy yields less revenue than a sales transaction of the same price."

Title insurance order counts in the first quarter of 2002 were up 12 percent from the same period last year, but were up only 6 percent in the month of March 2002 compared with the same month a year ago. Although order counts were down in early April compared to a year ago, interest rates trended downward over the same period and are currently slightly lower than a year ago. Nationwide loan application data indicate that refinances made up 50 percent of all one to four family loan applications in the first quarter of 2002 compared to 56 percent in 2001.

"The opening of our new underwriting subsidiary in Mexico this past quarter continues our path of international expansion," said Malcolm S. Morris. "While current international operations represent a small percentage of revenues, the potential growth and expansion outside of the U.S. is expected to be a significant component of our future. International operations are profitable, and we continue to invest a large portion of international profits into further foreign expansion."

Source: Stewart Information Services Corporation

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