Stewart Information Services Corporation

Hello, and thank you for joining the Steward Information Services third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask a question during the question and answer session. Instructions will be given at that time. Please note, this call is being recorded. Lastly, if you should need or require operator assistance, please press star zero. It is now my pleasure to turn today's conference over to Nat Otis, head of investor relations. Please go ahead.

Thanks, Leo. Good morning. Thank you for joining us today for Stewart's third quarter 2021 earnings conference call. We will be discussing results that were released yesterday after the close. Joining me today are CEO Fred Evinger and CFO David Heise. To listen online, please go to the Stewart.com website to access the link for this conference call. I will remind participants that this conference call may contain forward-looking statements that involve a number of risks and uncertainties. Such statements are based on expectation of future financial operating results and are not statements of fact. Actual results may differ materially from those projected. The risks and uncertainties with forward-looking statements are subject to include, but are not limited to, the risks and other factors detailed in our press release published yesterday evening and in the statement regarding forward-looking information, risk factors, and other sections of the company's Form 10-K and other filings with the SEC. Let me now turn the call over to Fred.

Thanks, Nat, and thank you all for joining us for today's third quarter earnings call and for your interest in Stuart. In a minute, David will take you through the details of this quarter's financial results, but before then, I'd like to discuss Stuart's operational evolution to date and the continued execution of our long-term strategy. Two years ago, we started a journey here at Stuart, a journey to become the premier title services company. We knew it would take some time, but we also knew we had a valued brand, strong balance sheet, and associates that were ready and willing to have to make an impact. Between then and now, we have navigated the dramatic impacts of COVID-19 life, as well as historic real estate market that continues to have momentum. So where are we on the journey, and what have been the main areas of focus and progress? We've made significant improvement on our operational capabilities by adding greater scale and priority markets, augmenting our core business with essential real estate technology and services, and injecting new talent and energy into a 125-year-old company. As I like to say, we are a 125-year-old startup. Initial goals of achieving double-digit margin have been met and exceeded, albeit with the help of a very robust market. As David will discuss, Stewart's operating revenues are up almost 240 million, or 40% from last year. and operating income was up over $30 million, or 55%, in a quarter in which the Mortgage Bankers Association forecasts have purchase originations down 12% year-over-year and overall mortgage originations down 25%. So we feel we are comfortably outperforming the market and creating some real value. At this stage of our journey, we can safely say much has structurally changed and improved, but we have more work to be done. Through acquisitions, we have grown scale in many critical markets where our size once hindered profitability and prevented the efficient managing of daily operations. Scale and flexibility are critical in a business that is both seasonal and cyclical. We accelerated our restructuring in the midst of heavy transaction volume. We closed offices where we forced our challenges going forward, and we added to markets we believed would be the centers of real estate activity in the future. On the topic of talent, we are becoming a destination for some very special talent. Of the top people at Stewart, what we call our senior leadership team, 50% are new or have been promoted. Our aggressive entrepreneurial actions have attracted great talent, not just from the title operations, but across the real estate services spectrum. And in real estate technology, given our investment, our commitment, and nibbleness, many talented leaders have joined us. This investment in improvement and talent will support our journey for years to come. Most importantly, we have become more valuable to our customers by building ease into the customer experience. For our larger lender partners, we have added technology and services that bring greater efficiency and usefulness, both in the current market and as well as the more digitally transformed marketplace. For our smaller customers, they see the value in our ability to make their daily lives easier through tools, technology, service, and security. The last component being of vital importance is wire fraud has become a critical issue for agents and the very reason we have partnered with Certify. I will leave with you a couple of thoughts. First, while our operational performance has benefited from the historic real estate market we are in, here at Stewart, we are focused on building a business that will thrive through the full real estate cycle and also be able to take advantage when technology and digitization further transforms the closing process. We intensely focused on driving the digital innovation required to deliver a superior closing process today and into the future. And I am confident our investments have positioned us for the current and future success. Second, while it is critical to build toward a vision of fully automated and digitized closing process in the future, for now, at its core, title insurance remains a technology-enabled but execution-driven business in which the clearing of title removes risk from customers who are ultimately making the largest purchase of their lifetime. This is a very important reality. As always, I want to thank our associates for all their hard work and congratulate them on their results. Our journey continues, and we are a quarter closer to our goal. Thank you, and David will now update everyone on the results of the quarter.