Total revenues of $554.3 million ($547.3 million on an adjusted basis) compared to $524.3 million ($526.1 million on an adjusted basis) in the prior year quarter Net income of $3.1 million ($4.6 million on an adjusted basis) compared to net loss of $8.2 million (net income of $0.2 million on an adjusted basis) in the prior year quarter Diluted earnings per share of $0.11 ($0.17 on an adjusted basis) compared to prior year quarter loss per diluted share of $0.30 ($0.01 earnings per share on an adjusted basis) HOUSTON, April 24, 2024 /PRNewswire/ -- Stewart Information Services Corporation (NYSE:STC) today reported net income attributable to Stewart of $3.1 million ($0.11 per diluted share) for the first quarter 2024, compared to a net loss of $8.2 million ($0.30 loss per diluted share) for the first quarter 2023. On an adjusted basis, Stewart's first quarter 2024 net income was $4.6 million ($0.17 per diluted share) compared to net income of $0.2 million ($0.01 per diluted share) in the first quarter 2023. First quarter 2024 pretax income before noncontrolling interests was $7.1 million ($9.1 million on an adjusted basis) compared to pretax loss before noncontrolling interests of $10.2 million (pretax income of $0.9 million on an adjusted basis) for the first quarter 2023. First quarter 2024 results included $7.0 million of pretax net realized and unrealized gains primarily driven by net unrealized gains on fair value changes of equity securities investments, while first quarter 2023 results included $1.8 million of pretax net realized and unrealized losses, primarily composed of net unrealized losses on fair value changes of equity securities investments and realized losses on sales of investment securities. "Our first quarter results improved over the first quarter 2023, but reflect the continuing challenges in the real estate market due to the higher interest rate environment, which we expect to continue for several quarters. We are encouraged by the increase in our commercial revenues this quarter compared to the prior year, although we anticipate ongoing challenges to residential transaction volumes," commented Fred Eppinger, chief executive officer. "We remain focused on our strategic investments and will continue to focus on balancing thoughtful cost discipline with investment in long-term enterprise initiatives to create a stronger and more resilient company." Selected Financial InformationSummary results of operations are as follows (dollars in millions, except per share amounts, pretax margin and adjusted pretax margin, and amounts may not add as presented due to rounding): Quarter Ended March 31, 2024 2023 Total revenues 554.3 524.3 Pretax income (loss) before noncontrolling interests 7.1 (10.2) Income tax (expense) benefit (0.9) 4.9 Net income attributable to noncontrolling interests (3.1) (3.0) Net income (loss) attributable to Stewart 3.1 (8.2) Non-GAAP adjustments, after taxes* 1.5 8.4 Adjusted net income attributable to Stewart* 4.6 0.2 Pretax margin 1.3 % (1.9 %) Adjusted pretax margin* 1.7 % 0.2 % Net income (loss) per diluted Stewart share 0.11 (0.30) Adjusted net income per diluted Stewart share* 0.17 0.01 * Adjusted net income, adjusted pretax margin and adjusted net income per diluted share are non-GAAP measures. See Appendix A for explanation and reconciliation of non-GAAP adjustments. Title SegmentSummary results of the title segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin): Quarter Ended March 31, 2024 2023 % Change Operating revenues 451.4 456.9 (1 %) Investment income 12.9 6.6 96 % Net realized and unrealized gains (losses) 7.1 (1.8) 492 % Pretax income (loss) 10.2 (0.7) 1,633 % Non-GAAP adjustments to pretax income* (3.7) 5.3 Adjusted pretax income* 6.5 4.6 41 % Pretax margin 2.2 % (0.1 %) Adjusted pretax margin* 1.4 % 1.0 % * Adjusted pretax income and adjusted pretax margin are non-GAAP financial measures. See Appendix A for explanation and reconciliation of non-GAAP adjustments. First quarter 2024 title segment operating revenues decreased $5.5 million, or 1 percent, primarily as a result of residential volume declines in our direct and agency title operations, partially offset by increased commercial revenues, while total segment operating expenses declined by $1.1 million, which was less than 1 percent, compared to the first quarter 2023. Agency retention expenses in the first quarter 2024 decreased $5.8 million, or 3 percent, in line with $8.2 million, or 3 percent, lower gross agency revenues, while the average independent agency remittance rate in the first quarter 2024 was approximately 17 percent, compared to 17.4 percent during the prior year quarter. Total title segment employee costs and other operating expenses increased by $4.3 million, or 2 percent, in the first quarter 2024 compared to the prior year quarter, primarily due to increased outside search expenses related to higher commercial revenues. As a percentage of operating revenues, these expenses were 52 percent in the first quarter 2024 compared to 50.4 percent in the prior year quarter. First quarter title loss expense decreased $0.3 million, or 2 percent, primarily due to lower title revenues compared to the prior year quarter. As a percentage of title revenues, title loss expense was 3.9 percent for both the first quarters 2024 and 2023. Investment income improved by $6.3 million in the first quarter 2024 compared to the prior year quarter, primarily due to higher interest income resulting from earned interest from eligible escrow balances in the first quarter 2024. Non-GAAP adjustments to the title segment's pretax income included $3.4 million of total acquisition intangible asset amortization and other expenses for both the first quarters 2024 and 2023, and $7.1 million and ($1.8) million of net realized and unrealized gains (losses) in the first quarters 2024 and 2023, respectively. Direct title revenues information is presented below (dollars in millions): Quarter Ended March 31, 2024 2023 % Change Non-commercial: Domestic 135.3 150.3 (10 %) International 19.2 19.2 0 % 154.5 169.5 (9 %) Commercial: Domestic 49.7 32.7 52 % International 6.4 5.7 12 % 56.1 38.4 46 % Total direct title revenues 210.6 207.9 1 % Total non-commercial domestic revenues in the first quarter 2024 declined $15.0 million, or 10 percent, primarily due to a 5 percent decline in total residential purchase and refinancing transactions and a lower average fee per file compared to the prior year quarter. First quarter 2024 domestic commercial revenues improved by $17.0 million, or 52 percent, primarily driven by increased average transaction size, which was partially offset by fewer commercial transactions. Average domestic commercial fee per file in the first quarter 2024 was $13,900, or 67 percent higher compared to $8,300 in the first quarter 2023, while average residential fee per file in the first quarter 2024 was $2,900, or 16 percent lower compared to $3,400 in the prior year quarter, primarily due to a lower purchase transaction mix in the first quarter 2024. Real Estate Solutions SegmentSummary results of the real estate solutions segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin): Quarter Ended March 31, 2024 2023 % Change Operating revenues 83.0 62.6 33 % Pretax income 6.7 1.4 393 % Non-GAAP adjustments to pretax income* 5.6 5.8 Adjusted pretax income* 12.3 7.2 71 % Pretax margin 8.1 % 2.2 % Adjusted pretax margin* 14.8 % 11.5 % * Adjusted pretax income and adjusted pretax margin are non-GAAP financial measures. See Appendix A for an explanation and reconciliation of non-GAAP adjustments. First quarter 2024 segment operating revenues increased $20.4 million, or 33 percent, compared to the prior year quarter, primarily driven by higher revenues from credit information and valuation services. Combined segment employee costs and other operating expenses increased $15.1 million, or 27 percent, in the first quarter 2024 consistent with the higher operating revenues. Non-GAAP adjustments to pretax income shown in the schedule above were related to acquisition intangible asset amortization expenses. Corporate and Other SegmentThe segment's results were primarily driven by net expenses attributable to corporate operations, which decreased to $9.7 million in the first quarter 2024, compared to $10.9 million in the first quarter 2023, primarily driven by management's cost discipline. ExpensesConsolidated employee costs in the first quarter 2024 increased slightly by $1.9 million, or 1 percent, compared to the prior year quarter, while as a percentage of total operating revenues, employee costs improved to 32.3 percent in the first quarter 2024 compared to 32.8 percent in the prior year quarter. Total other operating expenses in the first quarter 2024 increased $16.2 million, or 13 percent, primarily driven by higher service expenses and outside search fees related to increased revenues from real estate solutions and commercial title operations, respectively, partially offset by lower third-party ...