Stewart Information Services Corporation · NYSE:STC
Stewart Information Services — Investor Presentation (September 2014)
25 slides from Stewart Information Services's investor presentation, Sep 9, 2014
Slide 1: Stewart Information Services Corporation Investor Presentation — Fall 2014
Stewart Information Services Corporation Investor Presentation — Fall 2014
Slide 2: Forward-looking Statements
Forward-looking Statements Certain statements in this news release 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 financ
Slide 3: Non-GAAP Disclosures
Non-GAAP Disclosures This presentation may contain certain financial measures that are not presented in accordance with generally accepted accounting principles (GAAP), including but not limited to, losses and litigation expenses arising from non-predictable title losses and adjusted pretax title ma
Slide 4: Investment Highlights
Investment Highlights Significant market share (12.7% 1H14 according to the American Land Title Association®) in $12+ billion domestic title insurance industry with diversified real estate services business that includes non-regulated cash flows Well positioned to capitalize on further strengthening
Slide 5: Strategic Priorities
Strategic Priorities + Lead the market in providing compliant, trusted and tailored real estate services in concert with changing regulatory environment + Expand commercial market share + Repositioning Mortgage Services to excel in a normalized real estate market + Expanding footprint of Direct Oper
Slide 6: Title Insurance — Overview
Title Insurance — Residential + Provide independent, third-party closing and settlement services + Search, examine and insure the condition of the title to real estate property, providing security of ownership to homeowners and reduced liability to lenders + Direct Operations through more than 500 i
Slide 7: Title Insurance — Market Share Map
Title Insurance — Market Share Map "National Market Share ~ 12.7% [ cveiorthon Foss man ‘Source: American Land Tle Association, 1H14 Market Share by Famly Company and State ® 7 stewart
Slide 8: Title Insurance — Direct Revenues and Orders
Title Insurance — Direct Revenues and Orders Trailing 12 Months — $ Millions Reverue orders $1,200 4,100,000 $1,000 900,000, $800 700.000 500.000 800,000 100,000 ~100,000 2008 2004 2005-2008. 2007 200820092010 201120122013 2014 MEmDirect Tile Revenue —Open Orders.“ —-Closod Files,
Slide 9: Title Insurance — Loss Ratio by Policy Year
Title Insurance — Loss Ratio by Policy Year Actuarial Claims as a % of Net Statutory Premiums Written — U.S. Operations Only 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 20% 0.0% 2001 2002 20032004 ©2005-2008.» 2007 «2008 «2009 «2010-2011 « 2012-2013. Claims Paid mStowrt First Amatican "Fidelity National ‘Sourc
Slide 10: Title Insurance — GAAP Loss Provision Ratios
Title Insurance — GAAP Loss Provision Ratios Quarterly Title Loss Provision Ratios — Includes Prior Year True-ups 0% 2% 20% 10% * 0% —Fidolty National =FirstAmerican —emeStowart Source: Company press releases and SEC fhings & 10 stewart
Slide 11: Agency Network — Overview
Agency Network — Overview + Focus on quality and profitability over market share growth + Leading the industry in assisting independent agencies prepare for CFPB and other regulatory compliance + Average annual remittance per agency continues to increase while the key profitability driver (policy lo
Slide 12: Agency Network — Revenues Net of Retention
Agency Network — Revenues Net of Retention Trailing 12 Months — $ Millions Net Revenue Number of Independent Agents $250 7,000 6,000 5,000 4,000 3,000 2010 ot 2012 MEENetAgency Revenues Independent Agents [Note Number of independent agencies basedion number cf cortractuat relationships rather than n
Slide 13: Mortgage Services — Overview
Mortgage Services — Overview Business Lines + Origination/Home Equity: Title services, valuation services, origination support, underwriting support, post closing solutions, quality control and audit services + Servicing Support: Component servicing, loss mitigation, collections, call center, milita
Slide 14: Mortgage Services — Core Products
Mortgage Services — Core Products Title Insurance Underwriting Stewart Fidelity Title First American Title Old Republic Title v Escrow Centralized Title Solutions "REO and Default Title Solutions Title Curative Loan Origination Services Valuation Solutions BDSRENES < BEORNENES 4 4l<}s)4s < Alsi) < P
Slide 15: Capital Priorities
Capital Priorities Underwriter Business Model Other + Continue to strengthen + Look to increase direct + $70 million share repurchase $500+ million in statutory residential and commercial program to be completed by ‘surplus by growing at title operations’ presence year-end 2015 Gant mesiofeenun — SI
Slide 16: First Half 2014 and Full Year 2013 Highlights
First Half 2014 and Full Year 2013 Highlights + Pretax loss of $7.8 million in 1H14 and pretax earnings of $101.1 million in full year 2013 + Net loss attributable to Stewart of $6.2 million in 1H14 (-$0.27 per share) and net earnings attributable to Stewart of $63.0 million in 2013 ($2.60 per share
Slide 17: Revenues and Pretax Earnings Trends
Revenues and Pretax Earnings Trends $ Millions Revenue PretaxEamings $2,500 $500 $2,000 400 $1,500 $300 $1,000 $200 $500 100 80 $0 $500 $100 $1,000 $200 $1,500 $200 2008 2007 2008 2009 2010 2011 2012 2013 Tota Revenues "Pretax Eamengs
Slide 18: Matt Morris
Matt Morris CEO Allen Berryman CFO Nat Otis SVP, Financial Planning and Strategic Analysis Director of Investor Relations nat.otis@stewart.com 713.625.8360 direct 800.729.1900, ext. 8360 toll free Ted Jones, PhD Senior Vice President Chief Economist ted@stewart.com 713.625.8014 direct 800.729.1900,
Slide 19: Appendix
Stewart Information Services Corporation Appendix
Slide 20: SISCO Organizational Structure
SISCO Organizational Structure & 20
Slide 21: Market Conditions
Market Conditions + Home prices continue to increase — 5% increase in home prices equates to a 3.5%+ increase in revenue per transaction * Commercial real estate market remains solid * Interest rates remain at historically low levels * HARP extension to 2015 + Full benefit of 2013 state pricing incr
Slide 22: U.S. Existing Housing Sales
U.S. Existing Housing Sales National Association of Realtors Seasonally Adjusted Annualized Rate — $ Millions 8) Normal Bubble Last Normal Market Fannie Mae® 2002 Forecast $8,000 Tax Credit 2002 2003 2004 2005 2008-2007 2008 ©2009 2010-2011 2012-2013 2014 HIS Source: National Association of Reaors a
Slide 23: Residential Lending Vs. Industry Premiums
Residential Lending Vs. Industry Premiums $ Talons $.8llons $30 $180 $160 $25 2011-2014 Lending Likely Fannie Mae® Understates Title Revenues Forecast $140 Due to Elevated Cash Sales $20 $120 $100 15 $8.0 $10 $60 S40 $05 $00 "90 "91 92 "93 ‘44 5 "96 “97 BB "99 OO 01 02 OS 04 05 OS O7 OB 40 1 12 43 4
Slide 24: Balance Sheet — June 30, 2014
Balance Sheet — June 30, 2014 Assets $ thousands Cash & Cash Equivalents 150,376 Investments - Statutory Reserve Funds 427,776 Investments - Other 180,259 Other Assets 316,778 Goodwill & Intangibles (284,749 Total Assets 1,359,938 Liabilities Debt 92,618 Loss Reserves 494,066 Other Liabilities 109,6
Slide 25: Title Revenues by Regulatory Oversight
Title Revenues by Regulatory Oversight ‘Stewart Family 2013 Title Industry 2013 File ana wat 16 Feand Wat 2% Source: Form 9 tings (Schedule T) as complled ty ALTA ® 25 stewart
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