Stewart Reports Q4, Full-year 2023 Results
February 8, 2024
Stewart Information Services Corp. reported that its title segment generated $27.3 million in pretax income during the fourth quarter of 2023. This compared to pretax income of $26.9 million during the same period a year ago.
"Our fourth quarter results reflect continuing uncertainty in the real estate market due to the higher interest rate environment coupled with the normal seasonality,” said Fred Eppinger, Stewart’s chief executive officer. “Although we are encouraged by the moderation of interest rates into the mid-6% range during the fourth quarter and into early 2024, we maintain our outlook that higher interest rates will negatively impact real estate transaction volume in the first half of 2024. We have made excellent progress on our strategic investments during 2023 and will continue to focus on balancing thoughtful cost discipline with investment in these long-term enterprise initiatives to create a stronger and more resilient company."
During the fourth quarter of 2023, Stewart’s direct operations opened 68,583 orders and closed 51,806 orders. During the final quarter of 2022, the company opened 62,307 direct orders and closed 53,362 of them.
Total residential revenue in the fourth quarter of 2023 declined $17.5 million, or 10%, primarily due to a 5% decline in total residential purchase and refinancing transactions and a lower average fee per file compared to the fourth quarter 2022, Stewart reported.
According to the company, fourth-quarter domestic commercial revenues decreased $10.8 million, or 16%, primarily driven by 14% lower commercial transactions compared to the prior year quarter. Average domestic commercial fee per file in the fourth quarter of 2023 was $14,800, compared to $15,100 in the fourth quarter 2022, while the average residential fee per file in the fourth quarter 2023 was $3,200, compared to $3,500 in the prior year quarter primarily due to transaction mix in the fourth quarter 2023.
As a percentage of title revenues, title loss expense was 4.1% in the fourth quarter of 2023 compared to 3.7% in the fourth quarter of 2022, which benefited from last year's favorable claims experience. During Q4 2023, Stewart paid $20.6 million in claims and losses. This compared to $21.6 million in losses and claims paid during Q4 2022. For the year, Stewart paid $80.3 million in claims and losses. This was down from $102.7 million in losses and claims paid during 2022.
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