Stewart(US:STC)2021-11-03 18:58Financial Performance - Total revenues for the three months ended September 30, 2021, were $829,787,000, a 40.4% increase from $590,676,000 in the same period of 2020[11] - Net income attributable to Stewart for the nine months ended September 30, 2021, was $237,718,000, compared to $95,232,000 for the same period in 2020, representing a 149.5% increase[11] - Basic earnings per share attributable to Stewart increased to $3.30 for the three months ended September 30, 2021, up from $2.22 in the same period of 2020, reflecting a 48.6% growth[11] - For the three months ended September 30, 2021, the company reported net income attributable to Stewart of $88.663 million, compared to $55.909 million for the same period in 2020, representing a 58.5% increase[26] - Total operating revenues for the three months ended September 30, 2021, were $829.787 million, up 40.4% from $590.676 million in the same period of 2020[26] - Total revenues for the third quarter 2021 were $836.7 million, a 40% increase from $595.7 million in the third quarter 2020[50] - Net income attributable to Stewart for the third quarter 2021 was $88.7 million ($3.26 per diluted share), compared to $55.9 million ($2.21 per diluted share) in the same quarter of 2020, representing a 58% increase[53] Revenue Sources - Operating revenues from agency operations reached $401,762,000 for the three months ended September 30, 2021, a 42.2% increase from $282,605,000 in the same period of 2020[11] - Direct title insurance premiums increased to $248.738 million in Q3 2021 from $190.794 million in Q3 2020, a growth of 30.3%[26] - Agency title insurance premiums rose to $401.762 million in Q3 2021, compared to $282.605 million in Q3 2020, marking an increase of 42.2%[26] - Title segment operating revenues increased by $205.1 million, or 36%, to $767.9 million in the third quarter 2021, driven by a 31% increase in direct title revenues and a 42% increase in gross independent agency revenues[54] - Ancillary services and corporate segment revenues surged by 122% to $61.9 million in the third quarter 2021, primarily due to recent acquisitions and increased appraisal management services revenues[57] - International revenues rose by 49% to $17.3 million in Q3 2021, primarily driven by improved volumes in Canada[71] Expenses and Costs - Employee costs for the three months ended September 30, 2021, were $197,587,000, up from $155,638,000 in the same period of 2020, reflecting a 26.9% increase[11] - Other operating expenses grew by 55% to $152.6 million in Q3 2021, largely due to recently-acquired businesses and increased variable costs[84] - Employee costs increased by 27% to $197.6 million in Q3 2021, influenced by a 23% rise in average employee counts[80] - Title loss expense increased by $1.9 million, or 7%, in the third quarter 2021, with a title loss expense percentage of 4.0%, down from 5.1% in the prior year quarter[55] - Investment income for the title segment declined by $0.9 million, or 19%, due to lower dividend income and decreased interest income[56] Cash and Investments - Cash and cash equivalents at the end of the period were $607,605,000, an increase from $432,683,000 at the beginning of the period, marking a 40.5% rise[14] - Cash provided by operating activities for the nine months ended September 30, 2021, was $257,317,000, compared to $140,861,000 for the same period in 2020, representing an 83.0% increase[14] - Total cash and investments as of September 30, 2021, amounted to $1.13 billion, with $585.1 million net of statutory reserves[95] - The outstanding balance of the line of credit facility was $273.9 million as of September 30, 2021, with total draws of $175.0 million during the first nine months of 2021[107] - The company experienced a net decrease of $1.9 million in cash and cash equivalents due to foreign currency exchange rate changes during the first nine months of 2021, compared to a net decrease of $0.5 million in the same period of 2020[109] Investments - The company reported a comprehensive income attributable to Stewart of $225,473,000 for the nine months ended September 30, 2021, compared to $106,607,000 for the same period in 2020, indicating a 111.1% increase[11] - The company's investments in debt securities totaled $617.278 million as of September 30, 2021, down from $631.386 million at December 31, 2020[27] - The fair value of the company's equity securities increased to $83.441 million as of September 30, 2021, compared to $53.001 million at December 31, 2020, reflecting a growth of 57.3%[27] - The company reported net unrealized investment gains of $13.9 million on equity securities as of September 30, 2021, up from $4.4 million at December 31, 2020[27] - The company recorded net investment gains on equity securities of $9.706 million for the nine months ended September 30, 2021, compared to a loss of $7.136 million in the same period of 2020[35] Acquisitions and Growth - Goodwill increased to $536.176 million as of September 30, 2021, following acquisitions totaling $113.521 million during the period[37] - The company completed a $192 million acquisition of a provider of credit, consumer, and real estate data and technology services, enhancing its customer-focused real estate services platform[38] - The company closed the acquisition of Informative Research on October 1, 2021, enhancing its technology and services offerings in the real estate and loan transaction lifecycle[59] Regulatory and Compliance - The company maintained statutory reserve funds of approximately $524.5 million in investments and $24.0 million in cash as of September 30, 2021, ensuring compliance with state regulations[23] - The company has no material contractual commitments other than scheduled maturities of debt and operating lease payments, indicating sufficient liquidity for ongoing operations[110] - The company expects cash flows from operations and cash available from underwriters to be sufficient to fund operations, including claims payments, but may need to seek additional funding if these are insufficient[110] Risks and Controls - The company has identified various risks and uncertainties that could materially affect its financial performance, including economic conditions and regulatory changes[115] - The company maintains adequate and effective disclosure controls and procedures as of September 30, 2021, ensuring timely reporting of required information[118]