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|
|
ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
74-1677330
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
||
1980 Post Oak Blvd., Houston TX
|
|
77056
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Common Stock, $1 par value
|
|
New York Stock Exchange
|
(Title of each class of stock)
|
|
(Name of each exchange on which registered)
|
|
Large accelerated filer
|
|
þ
|
Accelerated filer
|
|
¨
|
|
|
|
|
||
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
|
¨
|
Item
|
|
Page
|
|
|
|
|
|
|
1
|
||
1A.
|
||
1B.
|
||
2
|
||
3
|
||
4
|
||
|
|
|
|
|
|
|
|
|
5
|
||
6
|
||
7
|
||
7A.
|
||
8
|
||
9
|
||
9A.
|
||
9B.
|
||
|
|
|
|
|
|
|
|
|
10
|
||
11
|
||
12
|
||
13
|
||
14
|
||
|
|
|
|
|
|
|
|
|
15
|
||
|
|
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||
New home sales – in millions
|
|
0.56
|
|
|
0.50
|
|
|
0.44
|
|
Existing home sales – in millions
|
|
5.45
|
|
|
5.25
|
|
|
4.94
|
|
Existing home sales – median sales price in $ thousands
|
|
233.9
|
|
|
222.4
|
|
|
208.3
|
|
|
|
Amounts ($ millions)
|
|
Percentages
|
||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||
Texas
|
|
362
|
|
|
341
|
|
|
338
|
|
|
19
|
|
|
18
|
|
|
20
|
|
New York
|
|
226
|
|
|
250
|
|
|
238
|
|
|
12
|
|
|
13
|
|
|
14
|
|
California
|
|
125
|
|
|
142
|
|
|
123
|
|
|
7
|
|
|
8
|
|
|
7
|
|
International
|
|
116
|
|
|
107
|
|
|
118
|
|
|
6
|
|
|
6
|
|
|
7
|
|
Florida
|
|
87
|
|
|
88
|
|
|
73
|
|
|
5
|
|
|
5
|
|
|
4
|
|
All others
|
|
988
|
|
|
960
|
|
|
824
|
|
|
51
|
|
|
50
|
|
|
48
|
|
|
|
1,904
|
|
|
1,888
|
|
|
1,714
|
|
|
100
|
|
|
100
|
|
|
100
|
|
•
|
conducting rule-making, supervision, and enforcement of Federal consumer protection laws;
|
•
|
restricting unfair, deceptive, or abusive acts or practices;
|
•
|
taking 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.
|
•
|
approving or setting of insurance premium rates;
|
•
|
standards of solvency and minimum amounts of statutory capital and surplus that must be maintained;
|
•
|
limitations 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;
|
•
|
prior approval for 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;
|
•
|
regulation of reinsurance;
|
•
|
restrictions on the size of risks that may be insured by a single company;
|
•
|
deposits of securities for the benefit of policyholders;
|
•
|
approval of policy forms;
|
•
|
methods of accounting; and
|
•
|
filing of annual and other reports with respect to financial condition and other matters.
|
|
|
High
|
|
Low
|
||||
2016:
|
|
|
|
|
||||
First quarter
|
|
$
|
36.99
|
|
|
$
|
30.34
|
|
Second quarter
|
|
41.78
|
|
|
33.33
|
|
||
Third quarter
|
|
48.60
|
|
|
41.06
|
|
||
Fourth quarter
|
|
48.17
|
|
|
41.62
|
|
||
2015:
|
|
|
|
|
||||
First quarter
|
|
$
|
41.83
|
|
|
$
|
35.12
|
|
Second quarter
|
|
41.15
|
|
|
35.57
|
|
||
Third quarter
|
|
41.74
|
|
|
37.25
|
|
||
Fourth quarter
|
|
44.01
|
|
|
36.27
|
|
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
||||||
Stewart
|
|
100.00
|
|
|
225.97
|
|
|
281.34
|
|
|
323.80
|
|
|
333.04
|
|
|
422.08
|
|
Russell 2000 Index
|
|
100.00
|
|
|
116.30
|
|
|
161.46
|
|
|
169.35
|
|
|
176.82
|
|
|
214.45
|
|
Russell 2000 Financial Services Sector Index
|
|
100.00
|
|
|
121.65
|
|
|
159.85
|
|
|
174.01
|
|
|
175.05
|
|
|
229.41
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||
|
|
($ millions, except share and per share data)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues
|
|
2,006.6
|
|
|
2,033.9
|
|
|
1,870.8
|
|
|
1,928.0
|
|
|
1,910.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Title operating revenues
|
|
1,904.1
|
|
|
1,888.4
|
|
|
1,714.4
|
|
|
1,810.0
|
|
|
1,745.5
|
|
Ancillary services revenues
|
|
84.3
|
|
|
130.0
|
|
|
132.9
|
|
|
103.5
|
|
|
143.5
|
|
Investment income
|
|
18.9
|
|
|
16.9
|
|
|
16.8
|
|
|
15.5
|
|
|
13.8
|
|
Investment and other (losses) gains
|
|
(0.7
|
)
|
|
(1.4
|
)
|
|
6.7
|
|
|
(1.1
|
)
|
|
7.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Title loss provisions
|
|
91.1
|
|
|
106.3
|
|
|
81.3
|
|
|
106.3
|
|
|
140.0
|
|
% title operating revenues
|
|
4.8
|
|
|
5.6
|
|
|
4.7
|
|
|
5.9
|
|
|
8.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Pretax income
(1)
|
|
88.0
|
|
|
9.7
|
|
|
51.8
|
|
|
101.1
|
|
|
89.3
|
|
Net income (loss) attributable to Stewart
|
|
55.5
|
|
|
(6.2
|
)
|
|
29.8
|
|
|
63.0
|
|
|
109.2
|
|
Cash provided by operations
|
|
123.0
|
|
|
80.5
|
|
|
64.0
|
|
|
87.1
|
|
|
120.5
|
|
Total assets
|
|
1,341.7
|
|
|
1,321.6
|
|
|
1,392.5
|
|
|
1,326.1
|
|
|
1,291.2
|
|
Notes payable and convertible senior notes
|
|
106.8
|
|
|
102.4
|
|
|
71.2
|
|
|
39.5
|
|
|
71.2
|
|
Stockholders’ equity
|
|
648.8
|
|
|
637.1
|
|
|
700.5
|
|
|
663.1
|
|
|
580.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|||||
Average shares – dilutive (millions)
|
|
23.5
|
|
|
23.5
|
|
|
24.7
|
|
|
24.7
|
|
|
24.4
|
|
Basic earnings (loss) attributable to Stewart
|
|
1.86
|
|
|
(0.26
|
)
|
|
1.31
|
|
|
2.85
|
|
|
5.66
|
|
Diluted earnings (loss) attributable to Stewart
|
|
1.85
|
|
|
(0.26
|
)
|
|
1.24
|
|
|
2.60
|
|
|
4.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash dividends
|
|
1.20
|
|
|
0.80
|
|
|
0.10
|
|
|
0.10
|
|
|
0.10
|
|
Stockholders’ equity
|
|
27.69
|
|
|
27.30
|
|
|
29.18
|
|
|
29.47
|
|
|
29.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Market price:
|
|
|
|
|
|
|
|
|
|
|
|||||
High
|
|
48.60
|
|
|
44.01
|
|
|
37.87
|
|
|
34.39
|
|
|
28.35
|
|
Low
|
|
30.34
|
|
|
35.12
|
|
|
27.02
|
|
|
22.74
|
|
|
11.54
|
|
Year end
|
|
46.08
|
|
|
37.33
|
|
|
37.04
|
|
|
32.27
|
|
|
26.00
|
|
•
|
$5.4 million of net realized losses, $4.9 million of which were in the ancillary services and corporate segment and $0.5 million in the title segment, and
|
•
|
$2.4 million of income tax benefits related to previously unrecognized tax credits.
|
•
|
$2.1 million of net realized losses, $1.4 million of which were in the title segment and $0.7 million in the ancillary services and corporate segment,
|
•
|
$2.7 million of depreciation, severance and goodwill impairment charges related to the exit of the delinquent loan servicing operations and $1.7 million of cost management program charges recorded in the ancillary services and corporate segment,
|
•
|
$0.8 million of severance charges recorded in the title segment, and
|
•
|
$2.2 million of income tax benefits, primarily from utilization of state tax loss carryforwards.
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
|
($ in millions)
|
|||||||
Provisions – Known Claims:
|
|
|
|
|
|
|
|||
Current year
|
|
20.6
|
|
|
14.1
|
|
|
18.4
|
|
Prior policy years
|
|
64.8
|
|
|
81.0
|
|
|
48.3
|
|
|
|
85.4
|
|
|
95.1
|
|
|
66.7
|
|
Provisions – IBNR
|
|
|
|
|
|
|
|||
Current year
|
|
52.0
|
|
|
54.0
|
|
|
46.2
|
|
Prior policy years-bulk reserves
|
|
—
|
|
|
—
|
|
|
10.7
|
|
Prior policy years
|
|
18.5
|
|
|
38.2
|
|
|
6.0
|
|
|
|
70.5
|
|
|
92.2
|
|
|
62.9
|
|
Transferred IBNR to Known Claims
|
|
(64.8
|
)
|
|
(81.0
|
)
|
|
(48.3
|
)
|
Total provisions
|
|
91.1
|
|
|
106.3
|
|
|
81.3
|
|
•
|
mortgage 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;
|
•
|
number of households;
|
•
|
premium rates;
|
•
|
foreign currency exchange rates;
|
•
|
market share;
|
•
|
ability to attract and retain highly productive sales associates;
|
•
|
independent agency remittance rates;
|
•
|
opening of new offices and acquisitions;
|
•
|
number of commercial transactions, which typically yield higher premiums;
|
•
|
government or regulatory initiatives, including tax incentives and the implementation of the new integrated disclosure requirements;
|
•
|
acquisitions or divestitures of businesses;
|
•
|
volume of distressed property transactions; and
|
•
|
seasonality and/or weather.
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Mortgage interest rates (30-year, fixed-rate) – %
|
|
|
|
|
|
|
|||
Averages for the year
|
|
3.65
|
|
|
3.85
|
|
|
4.17
|
|
First quarter
|
|
3.74
|
|
|
3.73
|
|
|
4.36
|
|
Second quarter
|
|
3.59
|
|
|
3.83
|
|
|
4.23
|
|
Third quarter
|
|
3.45
|
|
|
3.95
|
|
|
4.14
|
|
Fourth quarter
|
|
3.81
|
|
|
3.90
|
|
|
3.97
|
|
Mortgage originations – $ billions
|
|
1,940
|
|
|
1,730
|
|
|
1,301
|
|
Refinancings – % of originations
|
|
47.5
|
|
|
46.7
|
|
|
39.8
|
|
New home sales – in $ millions
|
|
0.56
|
|
|
0.50
|
|
|
0.44
|
|
Existing home sales – in $ millions
|
|
5.45
|
|
|
5.25
|
|
|
4.94
|
|
Existing home sales – median sales price in $ thousands
|
|
233.9
|
|
|
222.4
|
|
|
208.3
|
|
|
2016 Opened Orders
|
|
2016 Closed Orders
|
||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Total
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Total
|
||||||||||
Commercial
|
11,331
|
|
12,137
|
|
11,866
|
|
11,219
|
|
46,553
|
|
|
7,618
|
|
8,577
|
|
8,149
|
|
7,890
|
|
32,234
|
|
Purchase
|
59,081
|
|
71,429
|
|
63,115
|
|
52,072
|
|
245,697
|
|
|
38,709
|
|
54,183
|
|
52,937
|
|
46,474
|
|
192,303
|
|
Refi
|
33,467
|
|
37,501
|
|
42,851
|
|
33,386
|
|
147,205
|
|
|
24,531
|
|
25,412
|
|
28,361
|
|
28,492
|
|
106,796
|
|
Other
|
3,447
|
|
3,162
|
|
3,423
|
|
2,616
|
|
12,648
|
|
|
3,785
|
|
4,665
|
|
4,086
|
|
4,058
|
|
16,594
|
|
Total
|
107,326
|
|
124,229
|
|
121,255
|
|
99,293
|
|
452,103
|
|
|
74,643
|
|
92,837
|
|
93,533
|
|
86,914
|
|
347,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2015 Opened Orders
|
|
2015 Closed Orders
|
||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Total
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Total
|
||||||||||
Commercial
|
14,610
|
|
12,545
|
|
11,766
|
|
11,073
|
|
49,994
|
|
|
10,014
|
|
8,562
|
|
8,173
|
|
8,317
|
|
35,066
|
|
Purchase
|
60,092
|
|
70,970
|
|
63,836
|
|
50,271
|
|
245,169
|
|
|
38,506
|
|
54,419
|
|
53,532
|
|
44,314
|
|
190,771
|
|
Refi
|
54,944
|
|
44,923
|
|
40,542
|
|
36,663
|
|
177,072
|
|
|
32,301
|
|
33,160
|
|
28,849
|
|
26,517
|
|
120,827
|
|
Other
|
6,220
|
|
5,762
|
|
5,380
|
|
3,771
|
|
21,133
|
|
|
4,919
|
|
5,438
|
|
4,669
|
|
3,530
|
|
18,556
|
|
Total
|
135,866
|
|
134,200
|
|
121,524
|
|
101,778
|
|
493,368
|
|
|
85,740
|
|
101,579
|
|
95,223
|
|
82,678
|
|
365,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2014 Opened Orders
|
|
2014 Closed Orders
|
||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Total
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Total
|
||||||||||
Commercial
|
11,662
|
|
13,598
|
|
14,217
|
|
12,541
|
|
52,018
|
|
|
8,003
|
|
8,917
|
|
8,916
|
|
8,195
|
|
34,031
|
|
Purchase
|
52,431
|
|
65,073
|
|
63,874
|
|
54,466
|
|
235,844
|
|
|
33,247
|
|
46,518
|
|
49,027
|
|
45,504
|
|
174,296
|
|
Refi
|
18,164
|
|
22,560
|
|
39,443
|
|
38,161
|
|
118,328
|
|
|
11,716
|
|
14,022
|
|
20,885
|
|
25,245
|
|
71,868
|
|
Other
|
3,409
|
|
3,170
|
|
8,223
|
|
6,139
|
|
20,941
|
|
|
2,297
|
|
2,451
|
|
6,358
|
|
4,985
|
|
16,091
|
|
Total
|
85,666
|
|
104,401
|
|
125,757
|
|
111,307
|
|
427,131
|
|
|
55,263
|
|
71,908
|
|
85,186
|
|
83,929
|
|
296,286
|
|
|
Year Ended December 31
|
|
% Change
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||
|
($ in millions)
|
|
|
|
|
|||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|||||
Domestic
|
176.4
|
|
|
178.1
|
|
|
157.4
|
|
|
(1.0
|
)%
|
|
13.2
|
%
|
International
|
19.0
|
|
|
19.7
|
|
|
25.4
|
|
|
(3.6
|
)%
|
|
(22.4
|
)%
|
|
195.4
|
|
|
197.8
|
|
|
182.8
|
|
|
(1.2
|
)%
|
|
8.2
|
%
|
Non-commercial
|
|
|
|
|
|
|
|
|
|
|||||
Domestic
|
600.4
|
|
|
611.0
|
|
|
534.3
|
|
|
(1.7
|
)%
|
|
14.4
|
%
|
International
|
98.5
|
|
|
88.3
|
|
|
91.2
|
|
|
11.6
|
%
|
|
(3.2
|
)%
|
|
698.9
|
|
|
699.3
|
|
|
625.5
|
|
|
(0.1
|
)%
|
|
11.8
|
%
|
Total direct title revenues
|
894.3
|
|
|
897.1
|
|
|
808.3
|
|
|
(0.3
|
)%
|
|
11.0
|
%
|
|
|
Amounts ($ millions)
|
|
Percentages
|
||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||
Texas
|
|
362
|
|
|
341
|
|
|
338
|
|
|
19
|
|
|
18
|
|
|
20
|
|
New York
|
|
226
|
|
|
250
|
|
|
238
|
|
|
12
|
|
|
13
|
|
|
14
|
|
California
|
|
125
|
|
|
142
|
|
|
123
|
|
|
7
|
|
|
8
|
|
|
7
|
|
International
|
|
116
|
|
|
107
|
|
|
118
|
|
|
6
|
|
|
6
|
|
|
7
|
|
Florida
|
|
87
|
|
|
88
|
|
|
73
|
|
|
5
|
|
|
5
|
|
|
4
|
|
All others
|
|
988
|
|
|
960
|
|
|
824
|
|
|
51
|
|
|
50
|
|
|
48
|
|
|
|
1,904
|
|
|
1,888
|
|
|
1,714
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
Year Ended December 31
|
|
% Change
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|||||
|
($ in millions)
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||
Amounts retained by agencies
|
826.0
|
|
|
809.6
|
|
|
738.6
|
|
|
2.0
|
%
|
|
9.6
|
%
|
As a % of agency revenues
|
81.8
|
%
|
|
81.7
|
%
|
|
81.5
|
%
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||
Employee costs
|
604.4
|
|
|
658.3
|
|
|
624.3
|
|
|
(8.2
|
)%
|
|
5.4
|
%
|
As a % of operating revenues
|
30.4
|
%
|
|
32.6
|
%
|
|
33.8
|
%
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||
Other operating expenses
|
364.0
|
|
|
382.0
|
|
|
347.3
|
|
|
(4.7
|
)%
|
|
10.0
|
%
|
As a % of operating revenues
|
18.3
|
%
|
|
18.9
|
%
|
|
18.8
|
%
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||
Title losses and related claims
|
91.1
|
|
|
106.3
|
|
|
81.3
|
|
|
(14.3
|
)%
|
|
30.8
|
%
|
As a % of title revenues
|
4.8
|
%
|
|
5.6
|
%
|
|
4.7
|
%
|
|
|
|
|
|
2016
|
2015
|
2014
|
|||
|
($000 omitted)
|
|||||
Ancillary services and corporate segment:
|
|
|
|
|||
Litigation-related accruals
|
3,599
|
|
—
|
|
—
|
|
Class B Common Stock exchange expenses
|
2,193
|
|
—
|
|
—
|
|
Shareholder activism and settlement charges
|
1,186
|
|
3,542
|
|
1,841
|
|
Depreciation related to the exit of delinquent loan servicing activities
|
1,089
|
|
1,452
|
|
—
|
|
Cost management program and severance expenses
|
442
|
|
21,344
|
|
4,869
|
|
Impairment of goodwill
|
—
|
|
35,749
|
|
—
|
|
Expenses related to subsidiary acquisitions
|
—
|
|
—
|
|
7,077
|
|
Total ancillary services and corporate segment
|
8,509
|
|
62,087
|
|
13,787
|
|
Title segment:
|
|
|
|
|||
Prior policy reserve adjustments, net
|
(5,400
|
)
|
4,527
|
|
(21,342
|
)
|
Litigation-related accruals
|
—
|
|
5,959
|
|
18,252
|
|
Severance expenses
|
—
|
|
810
|
|
—
|
|
Total title segment
|
(5,400
|
)
|
11,296
|
|
(3,090
|
)
|
Total
|
3,109
|
|
73,383
|
|
10,697
|
|
|
|
Employee costs (%)
|
|
Other operating (%)
|
||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||
Title
|
|
28.3
|
|
|
28.0
|
|
|
28.6
|
|
|
16.1
|
|
|
17.0
|
|
|
18.3
|
|
Ancillary services and corporate
|
|
77.5
|
|
|
99.0
|
|
|
100.2
|
|
|
67.9
|
|
|
47.3
|
|
|
25.3
|
|
|
December 31,
2016
|
December 31,
2015 |
|||
|
($ in millions)
|
||||
Known claims
|
76.5
|
|
83.2
|
|
|
IBNR
|
386.1
|
|
379.4
|
|
|
|
|
|
|
|
|
Total estimated title losses
|
462.6
|
|
462.6
|
|
|
|
Payments due by period ($ millions)
|
|||||||||||||
|
|
Less than
1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
|
Total
|
|||||
Credit facility
|
|
—
|
|
|
92.9
|
|
|
—
|
|
|
—
|
|
|
92.9
|
|
Other notes payable
|
|
9.7
|
|
|
3.5
|
|
|
0.7
|
|
|
—
|
|
|
13.9
|
|
Operating leases
|
|
50.3
|
|
|
73.4
|
|
|
30.1
|
|
|
14.4
|
|
|
168.2
|
|
Estimated title losses
|
|
111.0
|
|
|
175.8
|
|
|
76.3
|
|
|
99.5
|
|
|
462.6
|
|
|
|
171.0
|
|
|
345.6
|
|
|
107.1
|
|
|
113.9
|
|
|
737.6
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
|
($ millions)
|
|||||||
Net cash provided by operating activities
|
|
123.0
|
|
|
80.5
|
|
|
64.0
|
|
Net cash used by investing activities
|
|
(56.8
|
)
|
|
(68.8
|
)
|
|
(78.6
|
)
|
Net cash (used) provided by financing activities
|
|
(59.3
|
)
|
|
(25.6
|
)
|
|
26.0
|
|
|
|
Amortized
costs
|
|
Fair
values
|
||
|
|
($ thousands)
|
||||
In one year or less
|
|
53,313
|
|
|
53,644
|
|
After one year through two years
|
|
32,894
|
|
|
33,472
|
|
After two years through three years
|
|
45,816
|
|
|
46,416
|
|
After three years through four years
|
|
70,691
|
|
|
72,160
|
|
After four years through five years
|
|
78,476
|
|
|
80,546
|
|
After five years
|
|
307,989
|
|
|
308,881
|
|
|
|
589,179
|
|
|
595,119
|
|
Board of Directors:
|
|
|
Thomas G. Apel
|
|
Chairman of the Board of the Company and CEO of VLN, Inc.
|
Arnaud Ajdler
|
|
Managing Partner of Engine Capital LP
|
Clifford Allen Bradley
|
|
Former Chairman of the board and CEO of Amerisafe, Inc.
|
James Chadwick
|
|
Director of Ancora Advisors LLC
|
Glenn C. Christenson
|
|
Managing Director of Velstand Investments, LLC
|
Robert L. Clarke
|
|
Of Counsel, Bracewell LLP
|
Frederick H. Eppinger
|
|
Director of Centene Corp. and former President and CEO of The Hanover Insurance Group
|
Matthew W. Morris
|
|
Chief Executive Officer of the Company
|
Clifford Press
|
|
Partner and Managing Member of Oliver Press Partners, LLC
|
|
|
|
Management Team:
|
|
|
Matthew W. Morris
|
|
Chief Executive Officer
|
Timothy Okrie
|
|
Chief Operations Officer
|
J. Allen Berryman
|
|
Chief Financial Officer, Secretary and Treasurer
|
Jay Milligan
|
|
Chief Revenue Officer
|
John L. Killea
|
|
Chief Legal Officer
|
Brad Rable
|
|
Chief Information Officer
|
Ann Manal
|
|
Chief Human Resources Officer
|
David A. Fauth
|
|
Group President
|
Patrick Beall
|
|
Group President
|
(a)
|
Financial Statements and Financial Statement Schedules
|
(b)
|
Exhibits
|
By:
|
/s/ Matthew W. Morris
|
|
Matthew W. Morris, Chief Executive Officer
|
|
|
By:
|
/s/ J. Allen Berryman
|
|
J. Allen Berryman, Chief Financial Officer, Secretary and Treasurer
|
|
|
By:
|
/s/ Brian K. Glaze
|
|
Brian K. Glaze, Controller and
Principal Accounting Officer
|
/s/ Thomas G. Apel
|
|
/s/ James Chadwick
|
|
/s/ Frederick H. Eppinger
|
(Thomas G. Apel)
|
|
(James Chadwick)
|
|
(Frederick H. Eppinger)
|
|
|
|
|
|
/s/ Arnaud Ajdler
|
|
/s/ Glenn C. Christenson
|
|
/s/ Matthew W. Morris
|
(Arnaud Ajdler)
|
|
(Glenn C. Christenson)
|
|
(Matthew W. Morris)
|
|
|
|
|
|
/s/ Clifford Allen Bradley
|
|
/s/ Robert L. Clarke
|
|
/s/ Clifford Press
|
(Clifford Allen Bradley)
|
|
(Robert L. Clarke)
|
|
(Clifford Press)
|
|
|
|
|
|
Stewart Information Services Corporation and Subsidiaries’ Consolidated Financial Statements:
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
Financial Statement Schedules:
|
|
|
|
||
|
|
For the Years Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
|
($000 omitted, except per share)
|
|||||||
Revenues
|
|
|
|
|
|
|||
Title insurance:
|
|
|
|
|
|
|||
Direct operations
|
894,313
|
|
|
897,118
|
|
|
808,327
|
|
Agency operations
|
1,009,797
|
|
|
991,332
|
|
|
906,062
|
|
Ancillary services
|
84,271
|
|
|
129,954
|
|
|
132,891
|
|
Investment income
|
18,925
|
|
|
16,850
|
|
|
16,806
|
|
Investment and other (losses) gains – net
|
(666
|
)
|
|
(1,369
|
)
|
|
6,744
|
|
|
2,006,640
|
|
|
2,033,885
|
|
|
1,870,830
|
|
Expenses
|
|
|
|
|
|
|||
Amounts retained by agencies
|
826,022
|
|
|
809,564
|
|
|
738,649
|
|
Employee costs
|
604,353
|
|
|
658,266
|
|
|
624,326
|
|
Other operating expenses
|
363,986
|
|
|
381,954
|
|
|
347,276
|
|
Title losses and related claims
|
91,147
|
|
|
106,265
|
|
|
81,305
|
|
Impairment of goodwill
|
—
|
|
|
35,749
|
|
|
—
|
|
Depreciation and amortization
|
30,044
|
|
|
30,298
|
|
|
24,226
|
|
Interest
|
3,062
|
|
|
2,096
|
|
|
3,236
|
|
|
1,918,614
|
|
|
2,024,192
|
|
|
1,819,018
|
|
Income before taxes and noncontrolling interests
|
88,026
|
|
|
9,693
|
|
|
51,812
|
|
Income tax expense
|
19,605
|
|
|
5,650
|
|
|
13,503
|
|
Net income
|
68,421
|
|
|
4,043
|
|
|
38,309
|
|
Less net income attributable to noncontrolling interests
|
12,943
|
|
|
10,247
|
|
|
8,556
|
|
Net income (loss) attributable to Stewart
|
55,478
|
|
|
(6,204
|
)
|
|
29,753
|
|
|
|
|
|
|
|
|||
Net income
|
68,421
|
|
|
4,043
|
|
|
38,309
|
|
Other comprehensive (loss) income, net of taxes:
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
(3,367
|
)
|
|
(11,145
|
)
|
|
(7,565
|
)
|
Change in unrealized net gains on investments
|
354
|
|
|
(3,741
|
)
|
|
9,793
|
|
Reclassification adjustment for net gains included in net income
|
(1,911
|
)
|
|
(1,626
|
)
|
|
(555
|
)
|
Other comprehensive (loss) income, net of taxes
|
(4,924
|
)
|
|
(16,512
|
)
|
|
1,673
|
|
Comprehensive income (loss)
|
63,497
|
|
|
(12,469
|
)
|
|
39,982
|
|
Less comprehensive income attributable to noncontrolling interests
|
12,943
|
|
|
10,247
|
|
|
8,556
|
|
Comprehensive income (loss) attributable to Stewart
|
50,554
|
|
|
(22,716
|
)
|
|
31,426
|
|
|
|
|
|
|
|
|||
Basic average shares outstanding (000)
|
23,364
|
|
|
23,544
|
|
|
22,778
|
|
Basic earnings (loss) per share attributable to Stewart
|
1.86
|
|
|
(0.26
|
)
|
|
1.31
|
|
Diluted average shares outstanding (000)
|
23,472
|
|
|
23,544
|
|
|
24,710
|
|
Diluted earnings (loss) per share attributable to Stewart
|
1.85
|
|
|
(0.26
|
)
|
|
1.24
|
|
|
As of December 31,
|
||||
|
2016
|
|
2015
|
||
|
($000 omitted)
|
||||
Assets
|
|
|
|
||
Cash and cash equivalents
|
185,772
|
|
|
179,067
|
|
Short-term investments
|
22,239
|
|
|
39,707
|
|
Investments in debt and equity securities available-for-sale, at fair value:
|
|
|
|
||
Statutory reserve funds
|
485,409
|
|
|
483,312
|
|
Other
|
146,094
|
|
|
96,537
|
|
|
631,503
|
|
|
579,849
|
|
Receivables:
|
|
|
|
||
Notes
|
3,402
|
|
|
3,744
|
|
Premiums from agencies
|
31,246
|
|
|
36,393
|
|
Income taxes
|
4,878
|
|
|
1,914
|
|
Trade and other
|
41,897
|
|
|
49,453
|
|
Allowance for uncollectible amounts
|
(9,647
|
)
|
|
(9,833
|
)
|
|
71,776
|
|
|
81,671
|
|
Property and equipment, at cost:
|
|
|
|
||
Land
|
3,991
|
|
|
3,991
|
|
Buildings
|
22,529
|
|
|
22,898
|
|
Furniture and equipment
|
217,105
|
|
|
214,350
|
|
Accumulated depreciation
|
(173,119
|
)
|
|
(169,870
|
)
|
|
70,506
|
|
|
71,369
|
|
Title plants, at cost
|
75,313
|
|
|
75,743
|
|
Investments in investees, on an equity method basis
|
9,796
|
|
|
9,628
|
|
Goodwill
|
217,094
|
|
|
217,722
|
|
Intangible assets, net of amortization
|
10,890
|
|
|
18,075
|
|
Deferred tax assets, net
|
3,860
|
|
|
4,949
|
|
Other assets
|
42,975
|
|
|
43,807
|
|
|
1,341,724
|
|
|
1,321,587
|
|
Liabilities
|
|
|
|
||
Notes payable
|
106,808
|
|
|
102,399
|
|
Accounts payable and accrued liabilities
|
115,640
|
|
|
118,082
|
|
Estimated title losses
|
462,572
|
|
|
462,622
|
|
Deferred tax liabilities, net
|
7,856
|
|
|
1,356
|
|
|
692,876
|
|
|
684,459
|
|
Contingent liabilities and commitments
|
|
|
|
||
Stockholders’ equity
|
|
|
|
||
Common Stock – $1 par, authorized 50,000,000; issued 23,783,440 and 22,643,255; outstanding 23,431,279 and 22,291,094, respectively
|
23,783
|
|
|
22,643
|
|
Class B Common Stock – $1 par, authorized 1,500,000; issued and outstanding 1,050,012 as of December 31, 2015; retired in 2016
|
—
|
|
|
1,050
|
|
Additional paid-in capital
|
157,176
|
|
|
156,692
|
|
Retained earnings
|
471,788
|
|
|
455,519
|
|
Accumulated other comprehensive (loss) income:
|
|
|
|
||
Foreign currency translation adjustments
|
(16,727
|
)
|
|
(13,360
|
)
|
Net unrealized gains on investments available-for-sale
|
7,846
|
|
|
9,403
|
|
Treasury stock – 352,161 common shares, at cost, for 2016 and 2015
|
(2,666
|
)
|
|
(2,666
|
)
|
Total stockholders’ equity attributable to Stewart
|
641,200
|
|
|
629,281
|
|
Noncontrolling interests
|
7,648
|
|
|
7,847
|
|
Total stockholders’ equity
|
648,848
|
|
|
637,128
|
|
|
1,341,724
|
|
|
1,321,587
|
|
|
For the Years Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
|
($000 omitted)
|
|||||||
Reconciliation of net income to cash provided by operating activities:
|
|
|
|
|
|
|||
Net income
|
68,421
|
|
|
4,043
|
|
|
38,309
|
|
Add (deduct):
|
|
|
|
|
|
|||
Depreciation and amortization
|
30,044
|
|
|
30,298
|
|
|
24,226
|
|
Provision for bad debt
|
3,349
|
|
|
3,396
|
|
|
1,977
|
|
Investment and other (gains) losses – net
|
666
|
|
|
1,369
|
|
|
(6,744
|
)
|
Payments for title losses in excess of provisions
|
(1,056
|
)
|
|
(17,154
|
)
|
|
(18,803
|
)
|
Adjustment for insurance recoveries of title losses
|
(173
|
)
|
|
213
|
|
|
17,181
|
|
Impairment of goodwill
|
—
|
|
|
35,749
|
|
|
—
|
|
Decrease in receivables – net
|
7,759
|
|
|
12,894
|
|
|
8,791
|
|
Decrease (increase) in other assets – net
|
391
|
|
|
3,073
|
|
|
(1,878
|
)
|
(Decrease) increase in payables and accrued liabilities – net
|
(3,888
|
)
|
|
2,088
|
|
|
(6,854
|
)
|
Decrease (increase) in net deferred income taxes
|
7,446
|
|
|
(5,800
|
)
|
|
3,176
|
|
Net income from equity investees
|
(2,834
|
)
|
|
(3,579
|
)
|
|
(3,442
|
)
|
Dividends received from equity investees
|
2,640
|
|
|
3,811
|
|
|
3,582
|
|
Stock based compensation expense
|
2,982
|
|
|
4,445
|
|
|
4,020
|
|
Other – net
|
7,215
|
|
|
5,668
|
|
|
448
|
|
Cash provided by operating activities
|
122,962
|
|
|
80,514
|
|
|
63,989
|
|
Investing activities:
|
|
|
|
|
|
|||
Proceeds from investments available-for-sale sold
|
81,091
|
|
|
69,280
|
|
|
58,132
|
|
Proceeds from investments available-for-sale matured
|
27,125
|
|
|
42,195
|
|
|
48,427
|
|
Purchases of investments available-for-sale
|
(166,444
|
)
|
|
(147,697
|
)
|
|
(147,372
|
)
|
Net sales (purchases) of short-term investments
|
17,468
|
|
|
(14,664
|
)
|
|
13,294
|
|
Purchases of property and equipment, title plants and real estate
|
(18,155
|
)
|
|
(19,658
|
)
|
|
(19,537
|
)
|
Proceeds from the sale of land, buildings, property and equipment, and real estate
|
692
|
|
|
4,214
|
|
|
3,520
|
|
Net cash received from disposal (paid for acquisition) of subsidiaries and other assets
|
1,268
|
|
|
(3,958
|
)
|
|
(39,990
|
)
|
Other – net
|
181
|
|
|
1,497
|
|
|
4,969
|
|
Cash used by investing activities
|
(56,774
|
)
|
|
(68,791
|
)
|
|
(78,557
|
)
|
Financing activities:
|
|
|
|
|
|
|||
Proceeds from notes payable
|
57,758
|
|
|
52,651
|
|
|
120,273
|
|
Payments on notes payable
|
(60,339
|
)
|
|
(22,494
|
)
|
|
(60,838
|
)
|
Purchase of remaining interest of consolidated subsidiaries
|
(991
|
)
|
|
(209
|
)
|
|
(20
|
)
|
Cash dividends paid
|
(27,840
|
)
|
|
(18,010
|
)
|
|
(2,334
|
)
|
Cash paid on Class B Common Shares conversion
|
(12,000
|
)
|
|
—
|
|
|
—
|
|
Distributions to noncontrolling interests
|
(12,961
|
)
|
|
(9,706
|
)
|
|
(8,986
|
)
|
Repurchases of Common Stock
|
(1,053
|
)
|
|
(27,950
|
)
|
|
(22,048
|
)
|
Payment of contingent consideration related to an acquisition
|
(2,002
|
)
|
|
—
|
|
|
—
|
|
Other—net
|
86
|
|
|
168
|
|
|
(21
|
)
|
Cash (used) provided by financing activities
|
(59,342
|
)
|
|
(25,550
|
)
|
|
26,026
|
|
Effects of changes in foreign currency exchange rates
|
(141
|
)
|
|
(7,664
|
)
|
|
(5,189
|
)
|
Increase (decrease) in cash and cash equivalents
|
6,705
|
|
|
(21,491
|
)
|
|
6,269
|
|
Cash and cash equivalents at beginning of year
|
179,067
|
|
|
200,558
|
|
|
194,289
|
|
Cash and cash equivalents at end of year
|
185,772
|
|
|
179,067
|
|
|
200,558
|
|
|
|
For the Years Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
|
|
($000 omitted)
|
|||||||
Supplemental information:
|
|
|
|
|
|
|
|||
Retirement of Convertible Senior Notes with issuance of Common Stock
|
|
—
|
|
|
—
|
|
|
27,190
|
|
Net changes in financial statement amounts due to disposal and purchase of subsidiaries and other assets:
|
|
|
|
|
|
|
|||
Goodwill (disposed) acquired
|
|
(628
|
)
|
|
7,220
|
|
|
21,440
|
|
Receivables and other assets disposed (acquired)
|
|
(1,272
|
)
|
|
38
|
|
|
12,620
|
|
Intangible assets disposed (acquired)
|
|
(1,730
|
)
|
|
—
|
|
|
21,110
|
|
Liabilities recognized or acquired
|
|
(499
|
)
|
|
(3,300
|
)
|
|
(15,180
|
)
|
Net realized loss on the disposal
|
|
2,861
|
|
|
—
|
|
|
—
|
|
Net cash (received from disposal) paid for acquisition of subsidiaries and other assets
|
|
(1,268
|
)
|
|
3,958
|
|
|
39,990
|
|
Assets purchased through capital lease obligations
|
|
6,990
|
|
|
1,062
|
|
|
2,003
|
|
Income taxes – net paid (refunded)
|
|
15,265
|
|
|
14,982
|
|
|
(106
|
)
|
Interest paid
|
|
3,020
|
|
|
1,873
|
|
|
2,616
|
|
|
Common
and Class B Common Stock ($1 par value) |
|
Additional
paid-in
capital
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Retained
Earnings
|
|
Treasury
stock
|
|
Noncontrolling
interests
|
|
Total
|
|||||||
|
($000 omitted)
|
|
|
|||||||||||||||||
Balances at January 1, 2014
|
22,853
|
|
|
171,915
|
|
|
10,882
|
|
|
452,314
|
|
|
(2,666
|
)
|
|
7,791
|
|
|
663,089
|
|
Net income attributable to Stewart
|
—
|
|
|
—
|
|
|
—
|
|
|
29,753
|
|
|
—
|
|
|
—
|
|
|
29,753
|
|
Cash dividends on Common Stock ($0.10 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,334
|
)
|
|
—
|
|
|
—
|
|
|
(2,334
|
)
|
Stock bonuses and other (including tax effects)
|
77
|
|
|
3,839
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,916
|
|
Exercise of stock options
|
2
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
Stock repurchases
|
(685
|
)
|
|
(21,363
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,048
|
)
|
Conversion of Convertible Senior Notes for Common Stock
|
2,111
|
|
|
25,079
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,190
|
|
Purchase of remaining interest of consolidated subsidiary
|
—
|
|
|
(321
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(321
|
)
|
Net change in unrealized gains and losses on investments (net of tax)
|
—
|
|
|
—
|
|
|
9,793
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,793
|
|
Net realized gain reclassification (net of tax)
|
—
|
|
|
—
|
|
|
(555
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(555
|
)
|
Foreign currency translation (net of tax)
|
—
|
|
|
—
|
|
|
(7,565
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,565
|
)
|
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,556
|
|
|
8,556
|
|
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,986
|
)
|
|
(8,986
|
)
|
Net effect of changes in ownership and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
(93
|
)
|
Balances at December 31, 2014
|
24,358
|
|
|
179,205
|
|
|
12,555
|
|
|
479,733
|
|
|
(2,666
|
)
|
|
7,268
|
|
|
700,453
|
|
Net loss attributable to Stewart
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,204
|
)
|
|
—
|
|
|
—
|
|
|
(6,204
|
)
|
Cash dividends on Common Stock ($0.80 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,010
|
)
|
|
—
|
|
|
—
|
|
|
(18,010
|
)
|
Stock bonuses and other (including tax effects)
|
93
|
|
|
4,758
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,851
|
|
Exercise of stock options
|
4
|
|
|
126
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
130
|
|
Stock repurchases
|
(762
|
)
|
|
(27,188
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,950
|
)
|
Purchase of remaining interest of consolidated subsidiary
|
—
|
|
|
(209
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(209
|
)
|
Net change in unrealized gains and losses on investments (net of tax)
|
—
|
|
|
—
|
|
|
(3,741
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,741
|
)
|
Net realized gain reclassification (net of tax)
|
—
|
|
|
—
|
|
|
(1,626
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,626
|
)
|
Foreign currency translation (net of tax)
|
—
|
|
|
—
|
|
|
(11,145
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,145
|
)
|
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,247
|
|
|
10,247
|
|
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,706
|
)
|
|
(9,706
|
)
|
Net effect of changes in ownership and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
38
|
|
Balances at December 31, 2015
|
23,693
|
|
|
156,692
|
|
|
(3,957
|
)
|
|
455,519
|
|
|
(2,666
|
)
|
|
7,847
|
|
|
637,128
|
|
Cumulative effect adjustment for adoption of new accounting pronouncement
|
—
|
|
|
(631
|
)
|
|
—
|
|
|
631
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income attributable to Stewart
|
—
|
|
|
—
|
|
|
—
|
|
|
55,478
|
|
|
—
|
|
|
—
|
|
|
55,478
|
|
Cash dividends on Common Stock ($1.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,840
|
)
|
|
—
|
|
|
—
|
|
|
(27,840
|
)
|
Cash paid on Class B Common Shares conversion
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,000
|
)
|
|
—
|
|
|
—
|
|
|
(12,000
|
)
|
Stock bonuses and other
|
110
|
|
|
2,872
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,982
|
|
Exercise of stock options
|
3
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
Stock repurchases
|
(23
|
)
|
|
(1,030
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,053
|
)
|
Purchase of remaining interest of consolidated subsidiary
|
—
|
|
|
(810
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(181
|
)
|
|
(991
|
)
|
Net change in unrealized gains and losses on investments (net of tax)
|
—
|
|
|
—
|
|
|
354
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
354
|
|
Net realized gain reclassification (net of tax)
|
—
|
|
|
—
|
|
|
(1,911
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,911
|
)
|
Foreign currency translation (net of tax)
|
—
|
|
|
—
|
|
|
(3,367
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,367
|
)
|
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,943
|
|
|
12,943
|
|
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,961
|
)
|
|
(12,961
|
)
|
Balances at December 31, 2016
|
23,783
|
|
|
157,176
|
|
|
(8,881
|
)
|
|
471,788
|
|
|
(2,666
|
)
|
|
7,648
|
|
|
648,848
|
|
|
2016
|
|
2015
|
||||||||
|
Amortized
costs
|
|
Fair
values
|
|
Amortized
costs
|
|
Fair
values
|
||||
|
($000 omitted)
|
||||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||
Municipal
|
72,284
|
|
|
72,432
|
|
|
70,300
|
|
|
72,008
|
|
Corporate
|
338,365
|
|
|
343,047
|
|
|
303,870
|
|
|
309,461
|
|
Foreign
|
165,735
|
|
|
167,027
|
|
|
149,914
|
|
|
153,221
|
|
U.S. Treasury Bonds
|
12,795
|
|
|
12,613
|
|
|
13,803
|
|
|
13,906
|
|
Equity securities
|
30,255
|
|
|
36,384
|
|
|
27,497
|
|
|
31,253
|
|
|
619,434
|
|
|
631,503
|
|
|
565,384
|
|
|
579,849
|
|
|
2016
|
|
2015
|
||||||||
|
Gains
|
|
Losses
|
|
Gains
|
|
Losses
|
||||
|
($000 omitted)
|
||||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||
Municipal
|
723
|
|
|
575
|
|
|
1,720
|
|
|
12
|
|
Corporate
|
6,871
|
|
|
2,189
|
|
|
7,700
|
|
|
2,109
|
|
Foreign
|
2,912
|
|
|
1,620
|
|
|
3,789
|
|
|
482
|
|
U.S. Treasury Bonds
|
4
|
|
|
186
|
|
|
128
|
|
|
25
|
|
Equity securities
|
6,800
|
|
|
671
|
|
|
4,842
|
|
|
1,086
|
|
|
17,310
|
|
|
5,241
|
|
|
18,179
|
|
|
3,714
|
|
|
Amortized
costs
|
|
Fair
values
|
||
|
($000 omitted)
|
||||
In one year or less
|
53,313
|
|
|
53,644
|
|
After one year through five years
|
227,877
|
|
|
232,594
|
|
After five years through ten years
|
225,206
|
|
|
225,483
|
|
After ten years
|
82,783
|
|
|
83,398
|
|
|
589,179
|
|
|
595,119
|
|
|
Less than 12 months
|
|
More than 12 months
|
|
Total
|
||||||||||||
|
Losses
|
|
Fair values
|
|
Losses
|
|
Fair values
|
|
Losses
|
|
Fair values
|
||||||
|
($000 omitted)
|
||||||||||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Municipal
|
575
|
|
|
32,038
|
|
|
—
|
|
|
—
|
|
|
575
|
|
|
32,038
|
|
Corporate
|
2,189
|
|
|
119,965
|
|
|
—
|
|
|
—
|
|
|
2,189
|
|
|
119,965
|
|
Foreign
|
1,427
|
|
|
70,012
|
|
|
193
|
|
|
3,160
|
|
|
1,620
|
|
|
73,172
|
|
U.S. Treasury Bonds
|
186
|
|
|
11,847
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|
11,847
|
|
Equity securities:
|
424
|
|
|
5,950
|
|
|
247
|
|
|
2,250
|
|
|
671
|
|
|
8,200
|
|
|
4,801
|
|
|
239,812
|
|
|
440
|
|
|
5,410
|
|
|
5,241
|
|
|
245,222
|
|
|
Less than 12 months
|
|
More than 12 months
|
|
Total
|
||||||||||||
|
Losses
|
|
Fair values
|
|
Losses
|
|
Fair values
|
|
Losses
|
|
Fair values
|
||||||
|
($000 omitted)
|
||||||||||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Municipal
|
9
|
|
|
2,230
|
|
|
3
|
|
|
1,615
|
|
|
12
|
|
|
3,845
|
|
Corporate
|
1,461
|
|
|
83,565
|
|
|
648
|
|
|
32,871
|
|
|
2,109
|
|
|
116,436
|
|
Foreign
|
322
|
|
|
35,008
|
|
|
160
|
|
|
3,155
|
|
|
482
|
|
|
38,163
|
|
U.S. Treasury Bonds
|
6
|
|
|
1,195
|
|
|
19
|
|
|
3,583
|
|
|
25
|
|
|
4,778
|
|
Equity securities:
|
720
|
|
|
4,440
|
|
|
366
|
|
|
3,224
|
|
|
1,086
|
|
|
7,664
|
|
|
2,518
|
|
|
126,438
|
|
|
1,196
|
|
|
44,448
|
|
|
3,714
|
|
|
170,886
|
|
•
|
Level 1 – quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 – observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and
|
•
|
Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair value
measurements
|
||||
|
($000 omitted)
|
||||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
||||
Municipal
|
—
|
|
|
72,432
|
|
|
—
|
|
|
72,432
|
|
Corporate
|
—
|
|
|
343,047
|
|
|
—
|
|
|
343,047
|
|
Foreign
|
—
|
|
|
167,027
|
|
|
—
|
|
|
167,027
|
|
U.S. Treasury Bonds
|
—
|
|
|
12,613
|
|
|
—
|
|
|
12,613
|
|
Equity securities:
|
36,384
|
|
|
—
|
|
|
—
|
|
|
36,384
|
|
|
36,384
|
|
|
595,119
|
|
|
—
|
|
|
631,503
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair value
measurements
|
||||
|
($000 omitted)
|
||||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
||||
Municipal
|
—
|
|
|
72,008
|
|
|
—
|
|
|
72,008
|
|
Corporate
|
—
|
|
|
309,461
|
|
|
—
|
|
|
309,461
|
|
Foreign
|
—
|
|
|
153,221
|
|
|
—
|
|
|
153,221
|
|
U.S. Treasury Bonds
|
—
|
|
|
13,906
|
|
|
—
|
|
|
13,906
|
|
Equity securities:
|
31,253
|
|
|
—
|
|
|
—
|
|
|
31,253
|
|
|
31,253
|
|
|
548,596
|
|
|
—
|
|
|
579,849
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
($000 omitted)
|
|||||||
Investment income:
|
|
|
|
|
|
|||
Debt securities
|
16,476
|
|
|
15,181
|
|
|
14,593
|
|
Short-term investments, cash equivalents and other
|
2,449
|
|
|
1,669
|
|
|
2,213
|
|
|
18,925
|
|
|
16,850
|
|
|
16,806
|
|
Investment and other (losses) gains
–
net:
|
|
|
|
|
|
|||
Realized gains
|
9,882
|
|
|
5,948
|
|
|
12,018
|
|
Realized losses
|
(10,548
|
)
|
|
(7,317
|
)
|
|
(5,274
|
)
|
|
(666
|
)
|
|
(1,369
|
)
|
|
6,744
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
($000 omitted)
|
|||||||
Current:
|
|
|
|
|
|
|||
Federal
|
4,718
|
|
|
4,774
|
|
|
3,047
|
|
State
|
1,447
|
|
|
709
|
|
|
(224
|
)
|
Foreign
|
5,983
|
|
|
5,967
|
|
|
7,442
|
|
Deferred:
|
|
|
|
|
|
|||
Federal
|
6,262
|
|
|
(3,986
|
)
|
|
3,916
|
|
State
|
(1,347
|
)
|
|
(1,375
|
)
|
|
(694
|
)
|
Foreign
|
2,542
|
|
|
(439
|
)
|
|
16
|
|
Income tax expense
|
19,605
|
|
|
5,650
|
|
|
13,503
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
($000 omitted)
|
|||||||
Expected income tax expense (benefit) at 35%
(1)
|
26,279
|
|
|
(194
|
)
|
|
15,140
|
|
Return-to-provision and true-up adjustments
|
(4,127
|
)
|
|
(1,329
|
)
|
|
1,133
|
|
Previously unrecognized research and development credits
|
(3,434
|
)
|
|
—
|
|
|
—
|
|
Nondeductible expenses
|
2,772
|
|
|
2,768
|
|
|
4,060
|
|
Intercompany dividends, net of deduction for dividends received
|
(539
|
)
|
|
(541
|
)
|
|
(319
|
)
|
Tax-exempt interest
|
(458
|
)
|
|
(404
|
)
|
|
(324
|
)
|
State income tax benefit – net of Federal impact
|
(407
|
)
|
|
(914
|
)
|
|
(840
|
)
|
Noncontrolling interest
|
303
|
|
|
251
|
|
|
186
|
|
Valuation allowance
|
294
|
|
|
(668
|
)
|
|
(5,020
|
)
|
Foreign tax rate differential
|
(207
|
)
|
|
(329
|
)
|
|
(693
|
)
|
Impairment of goodwill
|
—
|
|
|
7,099
|
|
|
—
|
|
Other – net
|
(871
|
)
|
|
(89
|
)
|
|
180
|
|
Income tax expense
|
19,605
|
|
|
5,650
|
|
|
13,503
|
|
Effective income tax rates
(1)
|
26.1
|
%
|
|
(1,019.4
|
)%
|
|
31.2
|
%
|
|
2016
|
|
2015
|
||
|
($000 omitted)
|
||||
Deferred tax assets:
|
|
|
|
||
Accrued expenses
|
26,835
|
|
|
20,190
|
|
Net operating loss (NOL) carryforwards
|
6,275
|
|
|
6,428
|
|
Tax credit carryforwards
|
6,154
|
|
|
20,242
|
|
Federal offset to Canadian deferred tax liability
(1)
|
4,335
|
|
|
1,657
|
|
Foreign currency translation adjustments
|
4,238
|
|
|
5,220
|
|
Allowance for uncollectible amounts
|
3,454
|
|
|
3,524
|
|
Fixed assets
|
2,067
|
|
|
2,094
|
|
Investments
|
978
|
|
|
3,369
|
|
Other
|
476
|
|
|
297
|
|
Deferred tax assets – gross
|
54,812
|
|
|
63,021
|
|
Valuation allowance
|
(2,457
|
)
|
|
(2,217
|
)
|
Deferred tax assets – net
|
52,355
|
|
|
60,804
|
|
Deferred tax liabilities:
|
|
|
|
||
Amortization – goodwill and other intangibles
|
(26,851
|
)
|
|
(27,991
|
)
|
Title loss provisions
|
(21,433
|
)
|
|
(18,523
|
)
|
Unrealized gains on investments
|
(3,873
|
)
|
|
(4,811
|
)
|
Deferred compensation on life insurance policies
|
(3,345
|
)
|
|
(3,558
|
)
|
Other
|
(849
|
)
|
|
(2,328
|
)
|
Deferred tax liabilities – gross
|
(56,351
|
)
|
|
(57,211
|
)
|
Net deferred income tax (liability) asset
|
(3,996
|
)
|
|
3,593
|
|
|
Title
|
|
Ancillary
Services and Corporate
|
|
Total
|
|||
|
($000 omitted)
|
|||||||
Balances at January 1, 2015
|
202,002
|
|
|
49,866
|
|
|
251,868
|
|
Re-allocation of goodwill
|
3,951
|
|
|
(3,951
|
)
|
|
—
|
|
Acquisitions
|
7,220
|
|
|
—
|
|
|
7,220
|
|
Purchase adjustments
|
—
|
|
|
(5,268
|
)
|
|
(5,268
|
)
|
Impairment
|
(1,569
|
)
|
|
(34,180
|
)
|
|
(35,749
|
)
|
Disposals
|
(349
|
)
|
|
—
|
|
|
(349
|
)
|
Balances at December 31, 2015
|
211,255
|
|
|
6,467
|
|
|
217,722
|
|
Acquisitions
|
300
|
|
|
—
|
|
|
300
|
|
Disposals
|
(190
|
)
|
|
(738
|
)
|
|
(928
|
)
|
Balances at December 31, 2016
|
211,365
|
|
|
5,729
|
|
|
217,094
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
($000 omitted)
|
|||||||
For the year:
|
|
|
|
|
|
|||
Revenues
|
24,274
|
|
|
28,843
|
|
|
31,562
|
|
Net income
|
6,542
|
|
|
8,830
|
|
|
7,914
|
|
At December 31:
|
|
|
|
|
|
|||
Total assets
|
32,324
|
|
|
33,555
|
|
|
25,533
|
|
Notes payable
|
20,895
|
|
|
20,200
|
|
|
12,727
|
|
Stockholders’ equity
|
9,483
|
|
|
7,213
|
|
|
7,665
|
|
|
2016
|
|
2015
|
||
|
($000 omitted)
|
||||
Banks – varying payments and rates
(1)
|
92,875
|
|
|
98,000
|
|
Other than banks
|
13,933
|
|
|
4,399
|
|
|
106,808
|
|
|
102,399
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
($000 omitted)
|
|||||||
Balances at January 1
|
462,622
|
|
|
495,395
|
|
|
506,888
|
|
Provisions:
|
|
|
|
|
|
|||
Current year
|
72,586
|
|
|
68,029
|
|
|
64,577
|
|
Previous policy years
|
18,561
|
|
|
38,236
|
|
|
16,728
|
|
Total provisions
|
91,147
|
|
|
106,265
|
|
|
81,305
|
|
Payments, net of recoveries:
|
|
|
|
|
|
|||
Current year
|
(18,836
|
)
|
|
(19,182
|
)
|
|
(18,775
|
)
|
Previous policy years
|
(73,194
|
)
|
|
(104,450
|
)
|
|
(67,898
|
)
|
Total payments, net of recoveries
|
(92,030
|
)
|
|
(123,632
|
)
|
|
(86,673
|
)
|
Adjustments related to acquired balance
|
—
|
|
|
(2,303
|
)
|
|
2,268
|
|
Effects of changes in foreign currency exchange rates
|
833
|
|
|
(13,103
|
)
|
|
(8,393
|
)
|
Balances at December 31
|
462,572
|
|
|
462,622
|
|
|
495,395
|
|
Loss ratios as a percentage of title operating revenues:
|
|
|
|
|
|
|||
Current year provisions
|
3.8
|
%
|
|
3.6
|
%
|
|
3.8
|
%
|
Total provisions
|
4.8
|
%
|
|
5.6
|
%
|
|
4.7
|
%
|
|
Shares
|
|
Weighted-Average Grant-Date Fair Value per Share ($)
|
||
|
|
||||
Nonvested balance at January 1, 2016
|
252,190
|
|
|
34.88
|
|
Granted
|
109,903
|
|
|
37.34
|
|
Adjustment for performance-based shares
|
(36,997
|
)
|
|
32.91
|
|
Vested
|
(83,286
|
)
|
|
33.23
|
|
Forfeited
|
(35,483
|
)
|
|
35.03
|
|
Nonvested balance at December 31, 2016
|
206,327
|
|
|
37.18
|
|
|
For the Years Ended
December 31, |
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
|
($000 omitted)
|
|||||||
Numerator:
|
|
|
|
|
|
|||
Net income (loss) attributable to Stewart
|
55,478
|
|
|
(6,204
|
)
|
|
29,753
|
|
Less: Cash paid on Class B Common Shares conversion (a)
|
(12,000
|
)
|
|
—
|
|
|
—
|
|
Net income (loss) for calculating basic EPS
|
43,478
|
|
|
(6,204
|
)
|
|
29,753
|
|
Add: Interest expense, net of tax effects
|
—
|
|
|
—
|
|
|
1,006
|
|
Adjusted net income (loss) for calculating diluted EPS
|
43,478
|
|
|
(6,204
|
)
|
|
30,759
|
|
Denominator (000):
|
|
|
|
|
|
|||
Basic average shares outstanding
|
23,364
|
|
|
23,544
|
|
|
22,778
|
|
Average number of dilutive shares relating to options
|
—
|
|
|
—
|
|
|
2
|
|
Average number of dilutive shares relating to convertible senior notes
|
—
|
|
|
—
|
|
|
1,641
|
|
Average number of dilutive shares relating to restricted shares grant
|
108
|
|
|
—
|
|
|
289
|
|
Diluted average shares outstanding
|
23,472
|
|
|
23,544
|
|
|
24,710
|
|
Basic earnings (loss) per share attributable to Stewart
|
1.86
|
|
|
(0.26
|
)
|
|
1.31
|
|
Diluted earnings (loss) per share attributable to Stewart
|
1.85
|
|
|
(0.26
|
)
|
|
1.24
|
|
2017
|
50,274
|
|
2018
|
41,967
|
|
2019
|
31,468
|
|
2020
|
18,666
|
|
2021
|
11,375
|
|
2022 and after
|
14,442
|
|
|
|
|
|
168,192
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
($000 omitted)
|
|||||||
Title segment:
|
|
|
|
|
|
|||
Revenues
|
1,922,422
|
|
|
1,904,258
|
|
|
1,730,875
|
|
Impairment of goodwill
|
—
|
|
|
1,569
|
|
|
—
|
|
Depreciation and amortization
|
21,176
|
|
|
18,767
|
|
|
16,677
|
|
Income before taxes and noncontrolling interest
|
139,083
|
|
|
119,032
|
|
|
90,786
|
|
|
|
|
|
|
|
|||
Ancillary services and corporate segment:
|
|
|
|
|
|
|||
Revenues
|
84,218
|
|
|
129,627
|
|
|
139,955
|
|
Impairment of goodwill
|
—
|
|
|
34,180
|
|
|
—
|
|
Depreciation and amortization
|
8,868
|
|
|
11,531
|
|
|
7,549
|
|
Loss before taxes and noncontrolling interest
|
(51,057
|
)
|
|
(109,339
|
)
|
|
(38,974
|
)
|
|
|
|
|
|
|
|||
Consolidated Stewart:
|
|
|
|
|
|
|||
Revenues
|
2,006,640
|
|
|
2,033,885
|
|
|
1,870,830
|
|
Impairment of goodwill
|
—
|
|
|
35,749
|
|
|
—
|
|
Depreciation and amortization
|
30,044
|
|
|
30,298
|
|
|
24,226
|
|
Income before taxes and noncontrolling interest
|
88,026
|
|
|
9,693
|
|
|
51,812
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
($000 omitted)
|
|||||||
United States
|
1,889,144
|
|
|
1,925,865
|
|
|
1,751,458
|
|
International
|
117,496
|
|
|
108,020
|
|
|
119,372
|
|
|
2,006,640
|
|
|
2,033,885
|
|
|
1,870,830
|
|
|
For the Year Ended
December 31, 2016
|
|
For the Year Ended
December 31, 2015
|
|
For the Year Ended
December 31, 2014
|
|||||||||||||||
|
Before-Tax
Amount
|
Tax
Expense
(Benefit)
|
Net-of-Tax
Amount
|
|
Before-Tax
Amount
|
Tax
Expense
(Benefit)
|
Net-of Tax
Amount
|
|
Before-Tax
Amount
|
Tax
Expense
(Benefit)
|
Net-of-Tax
Amount
|
|||||||||
|
($000 omitted)
|
|
($000 omitted)
|
|
($000 omitted)
|
|||||||||||||||
Foreign currency translation adjustments
|
(2,385
|
)
|
982
|
|
(3,367
|
)
|
|
(16,022
|
)
|
(4,877
|
)
|
(11,145
|
)
|
|
(10,405
|
)
|
(2,840
|
)
|
(7,565
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized net gains on investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized net gains on investments
|
544
|
|
190
|
|
354
|
|
|
(5,757
|
)
|
(2,016
|
)
|
(3,741
|
)
|
|
15,066
|
|
5,273
|
|
9,793
|
|
Less: reclassification adjustment for net gains included in net income (loss)
|
(2,940
|
)
|
(1,029
|
)
|
(1,911
|
)
|
|
(2,501
|
)
|
(875
|
)
|
(1,626
|
)
|
|
(853
|
)
|
(298
|
)
|
(555
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,396
|
)
|
(839
|
)
|
(1,557
|
)
|
|
(8,258
|
)
|
(2,891
|
)
|
(5,367
|
)
|
|
14,213
|
|
4,975
|
|
9,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income
|
(4,781
|
)
|
143
|
|
(4,924
|
)
|
|
(24,280
|
)
|
(7,768
|
)
|
(16,512
|
)
|
|
3,808
|
|
2,135
|
|
1,673
|
|
|
Mar 31
|
|
June 30
|
|
Sept 30
|
|
Dec 31
|
|
Total
|
|||||
|
($000 omitted, except per share)
|
|||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|||||
2016
|
438,229
|
|
|
489,437
|
|
|
553,210
|
|
|
525,764
|
|
|
2,006,640
|
|
2015
|
448,871
|
|
|
531,906
|
|
|
555,705
|
|
|
497,403
|
|
|
2,033,885
|
|
Net (loss) income attributable to Stewart:
|
|
|
|
|
|
|
|
|
|
|||||
2016
|
(11,195
|
)
|
|
23,599
|
|
|
26,375
|
|
|
16,699
|
|
|
55,478
|
|
2015
|
(12,448
|
)
|
|
17,106
|
|
|
(13,467
|
)
|
|
2,605
|
|
|
(6,204
|
)
|
Diluted (loss) earnings per share attributable to Stewart
(1)
:
|
|
|
|
|
|
|
|
|
|
|||||
2016
|
(0.48
|
)
|
|
0.49
|
|
|
1.12
|
|
|
0.71
|
|
|
1.85
|
|
2015
|
(0.52
|
)
|
|
0.72
|
|
|
(0.58
|
)
|
|
0.11
|
|
|
(0.26
|
)
|
|
|
For the Years Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
|
|
($000 omitted)
|
|||||||
Revenues
|
|
|
|
|
|
|
|||
Investment income
|
|
20,000
|
|
|
15,000
|
|
|
25,087
|
|
Other losses
|
|
—
|
|
|
—
|
|
|
(869
|
)
|
Other income
|
|
1,252
|
|
|
922
|
|
|
90
|
|
|
|
21,252
|
|
|
15,922
|
|
|
24,308
|
|
Expenses
|
|
|
|
|
|
|
|||
Employee costs
|
|
832
|
|
|
156
|
|
|
1,110
|
|
Other operating expenses, including $276 each year to affiliates
|
|
6,641
|
|
|
7,617
|
|
|
3,806
|
|
Depreciation
|
|
69
|
|
|
162
|
|
|
421
|
|
Interest
|
|
2,726
|
|
|
1,726
|
|
|
2,054
|
|
|
|
10,268
|
|
|
9,661
|
|
|
7,391
|
|
|
|
|
|
|
|
|
|||
Income before taxes and income (losses) from subsidiaries
|
|
10,984
|
|
|
6,261
|
|
|
16,917
|
|
Income tax expense
|
|
2,928
|
|
|
—
|
|
|
1
|
|
Income (losses) from subsidiaries
|
|
47,422
|
|
|
(12,465
|
)
|
|
12,837
|
|
Net income (loss)
|
|
55,478
|
|
|
(6,204
|
)
|
|
29,753
|
|
|
|
|
|
|
|
|
|||
Retained earnings at beginning of year
|
|
455,519
|
|
|
479,733
|
|
|
452,314
|
|
Cash dividends on Common Stock
|
|
(27,840
|
)
|
|
(18,010
|
)
|
|
(2,334
|
)
|
Cash paid on Class B Common Shares conversion
|
|
(12,000
|
)
|
|
—
|
|
|
—
|
|
Cumulative effect adjustment on adoption of new accounting pronouncement
|
|
631
|
|
|
—
|
|
|
—
|
|
Retained earnings at end of year
|
|
471,788
|
|
|
455,519
|
|
|
479,733
|
|
|
|
As of December 31,
|
||||
|
|
2016
|
|
2015
|
||
|
|
($000 omitted)
|
||||
Assets
|
|
|
|
|
||
Cash and cash equivalents
|
|
2,890
|
|
|
832
|
|
Receivables:
|
|
|
|
|
||
Notes - due from subsidiaries
|
|
40,879
|
|
|
68,382
|
|
Receivables from affiliates
|
|
848
|
|
|
1,093
|
|
Allowance for uncollectible amounts
|
|
(4
|
)
|
|
(7
|
)
|
|
|
41,723
|
|
|
69,468
|
|
Property and equipment, at cost:
|
|
|
|
|
||
Furniture and equipment
|
|
2,733
|
|
|
2,893
|
|
Accumulated depreciation
|
|
(2,512
|
)
|
|
(2,625
|
)
|
|
|
221
|
|
|
268
|
|
Title plant, at cost
|
|
48
|
|
|
48
|
|
Investments in subsidiaries, on an equity-method basis
|
|
688,837
|
|
|
653,519
|
|
Goodwill
|
|
8,470
|
|
|
8,470
|
|
Other assets
|
|
16,698
|
|
|
17,457
|
|
|
|
758,887
|
|
|
750,062
|
|
Liabilities
|
|
|
|
|
||
Notes payable
|
|
92,875
|
|
|
98,000
|
|
Accounts payable and other liabilities
|
|
24,812
|
|
|
22,781
|
|
|
|
117,687
|
|
|
120,781
|
|
Contingent liabilities and commitments
|
|
—
|
|
|
—
|
|
Stockholders’ equity
|
|
|
|
|
||
Common Stock – $1 par, authorized 50,000,000; issued 23,783,440 and 22,643,255; outstanding 23,431,279 and 22,291,094, respectively
|
|
23,783
|
|
|
22,643
|
|
Class B Common Stock – $1 par, authorized 1,500,000; issued and outstanding 1,050,012 as of December 31, 2015; retired in 2016
|
|
—
|
|
|
1,050
|
|
Additional paid-in capital
|
|
157,176
|
|
|
156,692
|
|
Retained earnings
(1)
|
|
471,788
|
|
|
455,519
|
|
Accumulated other comprehensive (loss) income:
|
|
|
|
|
||
Foreign currency translation adjustments
|
|
(16,727
|
)
|
|
(13,360
|
)
|
Unrealized investment gains
|
|
7,846
|
|
|
9,403
|
|
Treasury stock – 352,161 common shares, at cost
|
|
(2,666
|
)
|
|
(2,666
|
)
|
Total stockholders’ equity
|
|
641,200
|
|
|
629,281
|
|
|
|
758,887
|
|
|
750,062
|
|
|
|
For the Years Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
|
|
($000 omitted)
|
|||||||
Reconciliation of net income (loss) to cash provided (used) by operating activities:
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
55,478
|
|
|
(6,204
|
)
|
|
29,753
|
|
Add (deduct):
|
|
|
|
|
|
|
|||
Depreciation
|
|
69
|
|
|
162
|
|
|
421
|
|
Other losses
|
|
—
|
|
|
—
|
|
|
869
|
|
Decrease (increase) in receivables – net
|
|
245
|
|
|
(596
|
)
|
|
(357
|
)
|
Decrease (increase) in other assets – net
|
|
359
|
|
|
(558
|
)
|
|
(828
|
)
|
(Decrease) increase in payables and accrued liabilities – net
|
|
(496
|
)
|
|
(515
|
)
|
|
12,395
|
|
(Income) losses from subsidiaries
|
|
(47,421
|
)
|
|
12,465
|
|
|
(12,837
|
)
|
Other – net
|
|
(6,731
|
)
|
|
(4,593
|
)
|
|
(31,824
|
)
|
Cash provided (used) by operating activities
|
|
1,503
|
|
|
161
|
|
|
(2,408
|
)
|
Investing activities:
|
|
|
|
|
|
|
|||
Dividends from subsidiary
|
|
20,000
|
|
|
15,000
|
|
|
25,000
|
|
Purchase of property and equipment –net
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
Collections on notes receivables
|
|
27,500
|
|
|
—
|
|
|
—
|
|
Increases in notes receivables
|
|
—
|
|
|
(21,500
|
)
|
|
(46,875
|
)
|
Cash provided (used) by investing activities
|
|
47,478
|
|
|
(6,500
|
)
|
|
(21,875
|
)
|
Financing activities:
|
|
|
|
|
|
|
|||
Proceeds from notes payable
|
|
20,000
|
|
|
45,000
|
|
|
60,000
|
|
Payments on notes payable
|
|
(25,125
|
)
|
|
(7,000
|
)
|
|
—
|
|
Dividends paid
|
|
(27,840
|
)
|
|
(18,010
|
)
|
|
(2,334
|
)
|
Cash paid on Class B Common Shares conversion
|
|
(12,000
|
)
|
|
—
|
|
|
—
|
|
Repurchases of Common Stock
|
|
(1,053
|
)
|
|
(27,950
|
)
|
|
(22,048
|
)
|
Purchase of remaining interest of consolidated subsidiary
|
|
(991
|
)
|
|
(209
|
)
|
|
(321
|
)
|
Other – net
|
|
86
|
|
|
130
|
|
|
—
|
|
Cash (used) provided by financing activities
|
|
(46,923
|
)
|
|
(8,039
|
)
|
|
35,297
|
|
Increase (decrease) in cash and cash equivalents
|
|
2,058
|
|
|
(14,378
|
)
|
|
11,014
|
|
Cash and cash equivalents at beginning of year
|
|
832
|
|
|
15,210
|
|
|
4,196
|
|
Cash and cash equivalents at end of year
|
|
2,890
|
|
|
832
|
|
|
15,210
|
|
Supplemental information:
|
|
|
|
|
|
|
|||
Income taxes paid
|
|
1
|
|
|
1
|
|
|
24
|
|
Interest paid
|
|
2,716
|
|
|
1,681
|
|
|
546
|
|
Col. A
|
|
Col. B
|
|
Col. C
Additions
|
|
|
Col. D
Deductions
|
|
Col. E
|
|||||||||
Description
|
|
Balance
at
beginning
of period
|
|
Charged to
costs
and
expenses
|
|
Charged to
other
accounts
(describe)
|
|
|
(Describe)
|
|
Balance
At
end
of period
|
|||||||
|
|
($000 omitted)
|
||||||||||||||||
Stewart Information Services Corporation and subsidiaries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Estimated title losses
|
|
462,622
|
|
|
91,147
|
|
|
—
|
|
|
|
91,197
|
|
|
(A)
|
|
462,572
|
|
Valuation allowance for deferred tax assets
|
|
2,217
|
|
|
240
|
|
|
—
|
|
|
|
—
|
|
|
|
|
2,457
|
|
Allowance for uncollectible amounts
|
|
9,833
|
|
|
3,349
|
|
|
—
|
|
|
|
3,535
|
|
|
(B)
|
|
9,647
|
|
Year ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Estimated title losses
|
|
495,395
|
|
|
106,265
|
|
|
—
|
|
|
|
139,038
|
|
|
(A)
|
|
462,622
|
|
Valuation allowance for deferred tax assets
|
|
2,564
|
|
|
(347
|
)
|
|
—
|
|
|
|
—
|
|
|
|
|
2,217
|
|
Allowance for uncollectible amounts
|
|
9,193
|
|
|
3,396
|
|
|
—
|
|
|
|
2,756
|
|
|
(B)
|
|
9,833
|
|
Year ended December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Estimated title losses
|
|
506,888
|
|
|
81,305
|
|
|
2,268
|
|
|
(C)
|
95,066
|
|
|
(A)
|
|
495,395
|
|
Valuation allowance for deferred tax assets
|
|
6,971
|
|
|
(4,407
|
)
|
|
—
|
|
|
|
—
|
|
|
|
|
2,564
|
|
Allowance for uncollectible amounts
|
|
9,871
|
|
|
1,977
|
|
|
—
|
|
|
|
2,655
|
|
|
(B)
|
|
9,193
|
|
(A)
|
Represents primarily payments of policy and escrow losses and loss adjustment expenses.
|
(B)
|
Represents uncollectible accounts written off.
|
(C)
|
Represents amounts added through acquisitions.
|
Exhibit
|
|
|
|
|
|
|
|
||
3.1
|
|
—
|
|
Restated Certificate of Incorporation of the Registrant, dated April 28, 2016 (incorporated by reference in this report from Exhibit 3.1 of the Current Report on Form 8-K filed April 29, 2016)
|
|
|
|
||
3.2
|
|
—
|
|
Third Amended and Restated By-Laws of the Registrant, as of April 27, 2016 (incorporated by reference in this report from Exhibit 3.2 of the Current Report on Form 8-K filed April 28, 2016)
|
|
|
|
||
4.1
|
|
—
|
|
Credit Agreement, dated as of October 21, 2014, by and between the Registrant, the Guarantors party thereto, and Compass Bank, as administrative agent and lenders party thereto (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed October 23, 2014)
|
|
|
|
||
4.2
|
|
—
|
|
First Amendment to Credit Agreement, dated effective as of December 31, 2015, among the Registrant, the guarantors named therein, Compass Bank, as administrative agent, and the lenders party thereto (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed February 11, 2016)
|
|
|
|
||
10.1 †
|
|
—
|
|
Deferred Compensation Agreements dated March 10, 1986, amended July 24, 1990 and October 30, 1992, between the Registrant and certain executive officers (incorporated by reference in this report from Exhibit 10.2 of the Annual Report on Form 10-K for the year ended December 31, 1997)
|
|
|
|
||
10.2 †
|
|
—
|
|
Stewart Information Services Corporation 1999 Stock Option Plan (incorporated by reference in this report from Exhibit 10.3 of the Annual Report on Form 10-K for the year ended December 31, 1999)
|
|
|
|
||
10.3 †
|
|
—
|
|
Stewart Information Services Corporation 2005 Long-Term Incentive Plan, as amended and restated May 1, 2009 (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed May 5, 2009)
|
|
|
|
||
10.4 †
|
|
—
|
|
Stewart Information Services Corporation 2008 Strategic Incentive Pool Plan (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed May 14, 2008)
|
|
|
|
|
|
10.5
|
|
—
|
|
Nomination and Standstill Agreement, dated as of February 12, 2014, by and among the Registrant and Foundation Onshore Fund, L.P., Foundation Offshore Master Fund, Ltd., Foundation Offshore Fund, Ltd., Foundation Asset Management GP, LLC, Foundation Asset Management, LLC, David Charney, Sky Wilber, Engine Capital, L.P., Engine Jet Capital, L.P., Engine Capital Management, LLC, Engine Investments, LLC, Arnaud Ajdler and Glenn Christenson. (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed February 14, 2014)
|
|
|
|
|
|
10.6
|
|
—
|
|
Agreement, dated as of March 26, 2015, by and among Stewart Information Services Corporation and Bulldog Investors, LLC (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed on March 27, 2015)
|
|
|
|
||
10.7
|
|
—
|
|
Exchange Agreement, dated as of January 26, 2016, by and among Stewart Information Services Corporation and the holders of the Class B common stock, par value $1.00 per share, of the Company (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed on January 27, 2016)
|
|
|
|
||
10.8 †
|
|
—
|
|
Employment Agreement, effective January 1, 2017, by and between Stewart Information Services Corporation and Stewart Morris, Jr. (incorporated by reference in this report from Exhibit 10.3 of the Current Report on Form 8-K filed February 1, 2016)
|
|
|
|
Exhibit
|
|
|
|
|
|
|
|
|
|
10.9 †
|
|
—
|
|
Employment Agreement, effective January 1, 2017, by and between Stewart Information Services Corporation and Malcolm S. Morris (incorporated by reference in this report from Exhibit 10.4 of the Current Report on Form 8-K filed February 1, 2016)
|
|
|
|
||
10.10 †
|
|
—
|
|
Employment Agreement entered as of March 31, 2016, effective as of January 1, 2016, by and between the Registrant and Matthew W. Morris (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed April 6, 2016)
|
|
|
|
|
|
10.11 †
|
|
—
|
|
Employment Agreement entered as of March 31, 2016, effective as of January 1, 2016, by and between the Registrant and Joseph Allen Berryman (incorporated by reference in this report from Exhibit 10.2 of the Current Report on Form 8-K filed April 6, 2016)
|
|
|
|
|
|
10.12 †
|
|
—
|
|
Employment Agreement entered as of March 31, 2016, effective as of January 1, 2016, by and between the Registrant and Steven M. Lessack (incorporated by reference in this report from Exhibit 10.3 of the Current Report on Form 8-K filed April 6, 2016)
|
|
|
|
|
|
10.13 †
|
|
—
|
|
Employment Agreement entered as of March 31, 2016, effective as of January 1, 2016, by and between the Registrant and John L. Killea (incorporated by reference in this report from Exhibit 10.4 of the Current Report on Form 8-K filed April 6, 2016)
|
|
|
|
|
|
10.14 †
|
|
—
|
|
Registration Rights Agreement, dated as of April 27, 2016, by and among the Company and the Class B Common Stockholders (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed April 28, 2016)
|
|
|
|
|
|
14.1
|
|
—
|
|
Code of Ethics for Chief Executive Officers, Principal Financial Officer and Principal Accounting Officer (incorporated by reference in this report from Exhibit 14.1 of the Annual Report on Form 10-K for the year ended December 31, 2004)
|
|
|
|
|
|
21.1*
|
|
—
|
|
Subsidiaries of the Registrant
|
|
|
|
|
|
23.1*
|
|
—
|
|
Consent of KPMG LLP, including consent to incorporation by reference of their reports into previously filed Securities Act registration statements
|
|
|
|
|
|
31.1*
|
|
—
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
31.2*
|
|
—
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
32.1*
|
|
—
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
32.2*
|
|
—
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
101.INS*
|
|
—
|
|
XBRL Instance Document
|
|
|
|
|
|
101.SCH*
|
|
—
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
101.CAL*
|
|
—
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
Exhibit
|
|
|
|
|
|
|
|
||
101.DEF*
|
|
—
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
||
101.LAB*
|
|
—
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
||
101.PRE*
|
|
—
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith
|
†
|
Management contract or compensatory plan
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
No Customers Found
Suppliers
Supplier name | Ticker |
---|---|
Cigna Corporation | CI |
Aon Plc | AON |
American International Group, Inc. | AIG |
Synchrony Financial | SYF |
Intercontinental Exchange, Inc. | ICE |
Arch Capital Group Ltd. | ACGL |
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|