Stewart Information Services Corporation

Hello, and thank you for joining the Stewart Information Services Corporation's fourth quarter and full year 2025 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 today's 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 Kat Bass, Director of Investor Relations. Please go ahead.

Good morning and thank you for joining us today for Stewart's fourth quarter and full year 2025 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. This conference call may contain forward-looking statements that involve a number of risks and uncertainties. Please refer to the company's press release and other filings with the SEC for a discussion of the risks and uncertainties that could cause our actual results to differ materially. During our call, we will discuss some non-GAAP measures. For reconciliation of these non-GAAP measures, please refer to the appendix in today's earnings release, which is available on our website at stewart.com. Let me now turn the call over to Fred.

Thank you for joining us today for Stewart's fourth quarter and full year earnings conference call. Yesterday, we released the financial results for the fourth quarter and full year, which David will review with you shortly. I'd like to open today's call with some remarks on the overall progress we made in 25, and then shifting to market conditions a little bit, and then our fourth quarter results and strategic outlook for each of the businesses. We are very pleased with the progress we made in 25, strengthening and growing the earnings power of all our businesses. While commercial markets saw some awakening, in 25 we remained in a multi-year slump for existing home sales, with two years in a row of the lowest existing home sales in 30 years. Despite this market headwind, we grew revenues by 18%, net income by 48%, and adjusted EPS by 46% full year 25. That growth has allowed us to gain share and improve margins. We grew the company's adjusted pre-tax margin to 6.8 up from 5.8 a year prior. We have created momentum for the company through continued execution of our targeted growth plans and have strengthened our position in each business. We delivered more distinctive products and services for our customers and made good progress on becoming a destination for the best talent in the industry. At the end of 25, we also rounded out our lender services portfolio with the acquisition of mortgage contracting services, also known as MCS. And in 2025, virtually all of our growth was organic, but we will continue to set our sights on additional profitable growth through targeted acquisitions, and we enhanced our financial flexibility to capitalize on potential opportunities in the near term by successfully upsizing our credit facility by $100 million to $300 million and executing an equity offering of 2.2 million shares of stock raising $140 million to provide additional dry powder. In 2025, we also increased our dividend for the fifth year in a row, moving from $2 to $2.10 a share annually. Moving towards some highlights for our businesses. In 2025, we grew all domestic commercial revenues by 34% year over year. This growth can be attributed to continued success in the expansion of our national commercial services business and growth in our small commercial growth initiative in our direct operations business unit. Our national commercial services business grew 43% year over year with significant growth across all of our asset classes. In our real estate solution business, we grew revenues by 22% year over year and continue to have a very robust pipeline of opportunities. We have made significant progress on our expansion of this business line since beginning the journey in the late 2019 and look forward to seeing how recently acquired MCS will expand our breadth and client coverage for top lenders and services. Our agency services business also made strong progress in 25, growing revenue by 21% overall. And our strategy to drive more commercial to our agents was also very successful, delivering 34% growth for the year. Now I'd like to turn to the broader housing environment and our fourth quarter results. In the fourth quarter, we were able to maintain, and in most of our businesses, improve on our momentum. For the fourth quarter, we grew revenue 20% and adjusted net income by 52% compared to the fourth quarter of 24. This growth is meaningful for us, given the existing home sales grew in the quarter just under 1% in the same timeframe. While existing home sales purchases improved very slightly in the quarter, we will see signs for cautious optimism for housing in 26. In the fourth quarter, 30-year mortgage rates hovered between 6.1 and 6.35 range, showing a bit more stability than more recent short-term trends. We have also seen a shift in the composition of mortgage holders, with the population of mortgage holders with rates of 6% or higher exceeding the population of those below 3%. This implies that we are seeing people continue to buy itself for life events. and that the market is beginning to accept we are unlikely to return to 3% rates in the future. In the beginning of 26, we have seen rates remain in the low 6% range, and housing inventory has continued to be a little bit better than last year, and it was up 8% for the quarter compared to the fourth quarter of 24. Looking forward, we believe we have rounded the corner and are heading in the right direction to get back to a more normalized existing home sales environment in the coming years. We do not anticipate existing home sales getting all the way back to their long-term historic average of 5 million units in 26, but we believe we will begin to see modest market improvements in 26. Our direct operations business unit grew 8% in the fourth quarter compared to the same period last year, which we feel is strong given that this business is the most impacted by the effects of the challenge for residential housing. We remain focused on prioritizing share gains and target MSAs both organically and inorganically. And we continue to make strides in our strategic initiative to grow our Main Street commercial business that runs through our direct office. Our Main Street commercial business grew 17% for the full year and 16% in the fourth quarter in direct operations. We continue to expect a portion of our future growth in this business to come from targeted acquisitions. and we maintain a growing pipeline of targets that should begin to develop as the market signals a return to normal levels. Our national commercial services business delivered another solid quarter of growth. Success for this group is largely due to increased coverage in a number of geographic markets and asset classes, expansion of our team, and our ability to underwrite larger transactions over the past several years given our improved surplus. We are focused on continuing to invest in best-in-class talent to grow share, as relationships are especially important in this space and will allow us to expand on our network and deepen our expertise. Because of the work we have done to continually improve this unit, in the fourth quarter, we benefited from underwriting some sizable transactions. We grew National Commercial Service Business Unit by 49% in the quarter. We are pleased with the progress here, and it really represents the improved competitive position we have built for ourselves in the commercial market. Energy continues to be a point of strength, but for the year, energy growth was less than overall growth in this sector, and 25 energy grew 34 percent for the year, and all other classes grew 46 percent. We remain focused on growing all asset classes and target geographies to expand our overall footprint. Our agency services business had another strong quarter, with revenues up 20 percent year-over-year for the quarter. This amount of growth is strong when considering that the overall housing market is near flat to last year, which affects our agency partners. We remain focused on growing this business through the expansion of wallet share with existing agents and onboarding new agents in all states, with an emphasis on 15 states that are most attractive from an agency perspective. We are seeing sustained growth year-to-date agency across all our target markets, and most notably Florida, Texas, and New York. Our commercial initiative with agents have also been a big part of our success as we continue to build on the momentum we have had in recent years for our agents to differentiate our service and better our offerings to our agent partners. And we saw 34% growth in this important initiative in 2025. Our real estate solutions business grew by 29% in the fourth quarter compared to last year. We also improved our margin in the fourth quarter over last year, but our full year margin of 10.1 was a bit short of our target for the full year 25 due to some isolated pricing issues and expansion costs. For the full year 26, we fully expect to improve margins and deliver in the low team range for this segment and expect that our recent acquisition of MCS will help us improve our historical margin outlook. As mentioned in late December, we closed our acquisition of MCS, a property preservation service provider, allowing us to expand our default services offering and cross-sell customers across our expanded product lines. We expect continued progress in this business line as the market improves. Moving to our international operations, we are focused on broadening our geographic presence and depth in Canada, increasing our commercial penetration, and expanding our presence in the refi market. In the fourth quarter, we grew our non-commercial revenue by 20% for the year, and we grew total international revenue by 11%. We believe we can build on our strong position in these markets and continue to grow share. Overall, we have been dedicated to strengthening our company throughout geography, customer, and channel expansion in each business to set the company up for continued long-term success. I'm proud of the work we did in 25 to further the company and look forward to seeing how we can and opportunities in 26. I want to thank our customers and our agent partners for their continued trust. We are committed to doing our best to serve you with excellence. And finally, to the Stewart team, I want to thank you for the loyalty and continued dedication to excellence. We are committed to being a destination for best-in-class talent. This year, I had the opportunity to meet with thousands of employees across many different cities in the U.S. and Canada as part of my year-long roadshow. My time with you all during this series was powerful, as it showed me that we have a very dedicated team that is aligned and focused on the strategic objective of becoming the premier title services company. We point to this dedication and alignment as a key component of why we have received several employment awards this year, including the USA Today's Top 25 Workplace Award, Forbes' American Best Employers for Company Culture, and ranking number one performs America's best employer for women in business services. We are also proud that we were able to support our employees by donating $1.2 million to the Stewart Foundation to their local communities. We stood up the foundation together in 21, and we've made a significant impact on our community since the inception. I could not be prouder of the progress we have made on our journey, which we all know that much remains to be done to accomplish our goals but I look forward to seeing where we grow together. David, I will now turn it over to you to provide an update on our results.