Stewart Information Services Corporation

Hello and thank you for joining the Seward Information Service's first quarter 2022 earnings call. At this time, all participants are in a listen-only mode. Later, you will have an opportunity to ask questions during the question and answer session. If you would like to ask a question, you may do so by pressing the star and one key on your touch home phone. Please note that this call is being recorded. Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn today's conference over to Mr. Matt Otis, Head of Investor Relations. Sir, please go ahead.

Great. Thank you. Thank you for joining us today for Stewart's first quarter 2022 earnings conference call. We will be discussing results that were released yesterday after the close. Joining me today are CEO Fred Eppinger 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. Because such statements are based on an expectation of future financial operating results and are not statements of fact, actual results may differ materially from those projected. The risk 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.

Thank you for joining us today for Stuart's first quarter 2022 earnings conference call. David will go over the quarterly financial results in a minute, but before that, I'd like to touch on a little bit of the big picture. Over the past two years, much of the work here at Stuart has centered around initiating and carrying out a structural retooling of the company's operations to position ourselves better on our journey to what we call becoming the premier title service company. The goal has always been to create a sustainable business that would succeed through all types of real estate cycles and economic conditions. We focused on improving margins, growth, and our resiliency. We did this by improving our scale, our operational capabilities, and our financial discipline. I would add that during this time, we also focused on enhancing the customer experience through technology investments that have meaningfully changed our ease of use in our agency, lender, and direct businesses. I believe the first quarter demonstrates that we have made significant progress on our journey. It was not long ago that Stewart consistently lost money in the first quarter. In 2022, even as the market normalized, we delivered record results. The backdrop of rising interest rates, normal seasonality, and uncertainty of the spring selling season is weighing on the start of 22. But this is the market environment we've been preparing for. The expectation has always been that today's market would be different than 21, and 23 will be different than 22. And we will be prepared for each of these as we continue our efforts to build a better and more resilient steward. I say this for two important reasons. First and foremost, we are confident in our ability to manage in this transitional period and remain bullish on the long-term prospects for the markets we operate in. Second, it is important to understand that just because the market has transitioned, our journey continues. We will remain laser-focused on strengthening the foundational tenet of our structural improvement, attaining adequate scale in priority markets, and by leading technology support and innovation to help drive superior and consistent service delivery to our customers. We have taken great strides in addressing a lack of scale in various markets over the last couple of years. On the direct side, we have executed more than 20 regional title transactions and added significant bench strength and talent. We have changed market presence in Arizona, Illinois, Michigan, Texas, California, Colorado, and Washington to our advantage, just to name a few. In addition, in markets that we determined adequate scale could not be accomplished without excess investment, we simply closed or sold operations, often to an agent partner. On the agency side, we've invested in technology and services that provide greater connectivity, ease of use, and risk reduction for our agent partners. As the industry accelerates the implementation of online and paperless transactions, we are there to help support our agents as they undergo this critical transition. We believe our opportunity to grow scale in our growth markets and improve our shelf space with winning independent agents is just beginning. Why is this so important? How does scale in one MSA translate into Stewart becoming the winning title services company and increasing shareholder value? Let me briefly explain. As in all industries, customers are the lifeblood of success and growth, maybe more so in title insurance as we make our money on each real estate transaction with no recurring revenue stream. Industry volumes vary by quarter given all of the reasons we have just discussed, so delivering Great consistent service while matching resources to revenues in a disciplined way is the special sauce in our industry. Historically, Stewart has been subscaled in many of the key markets, both in direct and from an agency standpoint. An inch deep and a mile wide is a phrase I often use. This plays significant pressure on our local people and operations as order activity fluctuated. An office of four people acting by themselves can't rip up quickly enough to take advantage as volumes increase, negatively impacting customer service. Conversely, when order activity wanes, business goes elsewhere because of inconsistent customer service through the cycle, while profitability also dips due to the lack of operational leverage to pull. This is why the scale in our priority MSAs is the building block of our success and why we will continue to opportunistically look for core title acquisitions that match our profile, as well as work to add technologies and service that help deepen our agency partnerships and increase share with winning agents in our target markets. We have made great progress over the past few years as we used our MSA market assessments to help guide us and bolster our operations. Clearly, more work needs to be done, but we will continue to grow and enhance our competitive position in each market. Even with the changing market conditions, we believe opportunities will continue to arise to build share in our target markets, allowing us to profitably grow throughout the cycle. Let me just finish by reiterating my positive long-term view of the real estate market and ability at Stewart to become the premier title services company. I would also like to thank our associates for all their hard work and our customers for their continued support. David will now update everyone on the results.