Stewart Information Services Corp., Houston, reported net earnings of almost $60 million for the fourth quarter and $109 million for the full year of 2012, up from $2.2 million and $2.3 million for the same periods the previous year. The company said 4Q12 net income was helped by the release of a $37 million tax asset valuation, moneys which had not been utilized to offset taxable income.
The company has realigned its reporting into three segments: title, mortgage services (its outsource business for originators and servicers, including default management) and corporate.
Revenue in 4Q12 totaled $521 million, of which $468 million came from title and $48 million from mortgage services.
CEO Matthew Morris said the pretax earnings of $89 million for 2012 represent the best year Stewart has had since 2006.
“We enter 2013 with cautious optimism regarding the outlook for real estate, while being mindful of the tenuous economic conditions that are still present in our economy,” he added.
Title orders opened during the fourth quarter were 104,200, up from 73,200 one year prior. Revenue from direct title operations was $192.4 million, of which $35.4 million came from commercial transactions.
Revenue per close order in direct operations fell 4.5% from 4Q11 because of a higher proportion of refinance orders, but this was somewhat offset by the increase in commercial orders.
Stewart said its proportion of refi orders in the fourth quarter was lower than the title industry average and that should mean less volatility in the future as refinancings diminish.
Market share data from the American Land Title Association for the third quarter (the most recent available) has Stewart ranked fourth among the four national title insurance underwriters, slipping behind Old Republic.
In mortgage services, the company is developing new product offerings to provide servicers as distressed servicing business retrenches.