Fidelity, First American, Stewart, Old Republic 1Q25 profits

Title underwriters stay profitable in difficult Q1

Signs from early April that the housing market is coming around will help the title industry's performance on what has been a slow start to the spring season.

However, the biggest news that shook up the industry took place on April 10 at the second largest company by total volume.

Following an incident on a cruise ship, which resulted in arrest, First American Financial fired its CEO Kenneth DeGiorgio and replaced him with Mark Seaton, the chief financial officer.

It was a tabloid-headline start to a second quarter that some in the title business are saying is a mixed bag impacted by President Trump's tariff announcements.

"For those that monitor the housing market trends closely, it is clear to see that we have an educated consumer base sitting on the sidelines, poised and ready to take advantage of a quick rate drop or changes to market conditions that make buying a home more accessible," Stewart Information Services CEO Fred Eppinger said on the company's earnings call. "Unlike last year, the housing inventory is at a higher level of both quality and volume."

Title insurers have a strong tie to what happens in the mortgage originations market, both purchase and refi. The first quarter is typically a slow one for their transactions as a result.

"Residential originations continue to be at trough levels, both in terms of purchase and refinance, but we experienced revenue improvement in both markets this quarter," First American's Seaton added on its earnings call. "Real estate goes in cycles, and we're at the very beginning of the next cycle."

After the quarter ended, Dream Finders Homes closed on its previously announced purchase of Alliant National Title. It joins Lennar, who owns 8% of Title Resource Group after the latter bought Doma; Pulte; DH Horton; and Shaddock National Holdings as homebuilders who own underwriters.

A pair of mortgage insurers, Essent Group and Radian Group, also operate title insurers.

Meanwhile, Blend Labs is looking to make an exit from title agency, putting the Title365 business it acquired from Mr. Cooper in 2021 up for sale, it said on its first quarter earnings call.

The following is a roundup of earnings at the four largest title insurers, plus one stand-alone publicly traded company.

First American's new CEO speaks

First American turned a profit for the second consecutive quarter, at $74.2 million, slightly over the fourth quarter's $72.4 million. For the same period last year, it made $58.3 million.

During his prepared remarks, Seaton talked about how the company's data and analytics segment has gained market share and what it means for the future.

"As the world becomes increasingly digitized and the power of artificial intelligence continues to grow exponentially, data is needed to drive automation," he said. "And since we have more of that data than anyone, it puts us in the driver's seat."

Still, orders are a key part of title businesses, and in the first three weeks of April, purchase open orders were down 4%, while refinance were up 52%, albeit off of a low base, Seaton said.

For the three months ended March 31, open orders totaled 163,900, up from 143,100 three months ago and 155,000 a year prior.

Housing on the way up, Stewart CEO says

First quarter net income at Stewart was $3.1 million. This was down from the fourth quarter when it made $22.7 million, but flat with the first quarter in 2024.

Year-over-year, the company reported an 11% increase in title operating revenues, on improvement in both the direct and agency segments. This outpaced a 9% increase in segment operating expenses.

"Our Real Estate Solutions business segment had strong revenue results for the first quarter as well, growing 17%," CEO Fred Eppinger said. "Our strong revenue gains came with higher expenses, primarily due to increased cost of credit data from our informative research business."

Eppinger, while saying the current market uncertainty makes business going forward difficult to predict, believes the second half of this year will be an improvement over the same six months for 2024.

Open orders were down year-over-year to 78,943 from 79,335 for the first quarter, although March's 28,437 were up from 27,416 in the same month in 2024.

The total was up from 68,339 in the fourth quarter.

On May 1, Stewart announced an internal merger, combining its New York business, Stewart Title Insurance Co., into its Stewart Title Guaranty Co.

"Operating as STGC in New York will allow us to better serve our New York customers by accessing all of our underwriting power and increased financial stability," Eppinger said in a press release. "Stewart is a trusted underwriting name in New York, and this merger will allow us to leverage the full strength of our combined financial balance sheet, enabling us to more effectively and efficiently underwrite transactions of all sizes, including significantly larger and more complex transactions."

Stewart's market size in New York was a key reason why state and federal regulators put the kibosh on its merger with Fidelity National Financial.

FNF profits well below comparable periods

FNF's earnings of $83 million for the first quarter were significantly lower than $450 million for the prior three months and from $248 million one year prior.

Adjusted net earnings of the quarter, which exclude mark-to-market of investments and other non-recurring items, were $213 million, flat versus $206 million on year prior.

The title segment contributed $158 million to this line, up from $130 million one year earlier. Its majority-owned life insurer, F&G, added $80 million for the first quarter, down from $95 million.

Open orders totaled 343,000, compared with 299,000 for the fourth quarter and 315,000 for the period ended March 31, 2024.

In the first quarter, purchase orders performed to their normal seasonality. However, the first month of the current quarter was a different story.

"For the month of April, we have seen purchase opened orders down 3% due to the impact of uncertainty and mortgage rate volatility," CEO Mike Nolan said on the earnings call. "Our daily purchase orders opened were up 3% over the first quarter of 2024, up 22% over the fourth quarter of 2024 and down 3% for the month of April versus the prior year."

But refinance orders were at 1,400 per day in April, compared with 1,300 in the first quarter, he continued.

Premiums up, segment income down at Old Republic

At Old Republic International, the title segment pretax operating income was up 84% compared with the same period in 2024, to $4.3 million from $2.3 million. But this was well below the fourth quarter's $55.4 million.

Orders opened totaled 50,342, compared with 46,625 in the fourth quarter and 49,122 for the first quarter of 2024. Old Republic revised how it reports order counts in last year's second quarter.

"While we are pleased with our performance, conditions in the real estate and mortgage industries continue to be less than favorable in the seasonally weak first quarter," said Carolyn Monroe, president of Old Republic's title business, on the earnings call. "Our directly produced premium and fees were up 6% from the first quarter of last year, while agency produced premiums were up 12%."

During the first quarter, Old Republic sold its Ramquest and eClosing units to Qualia.

"This partnership also allows our internal tech teams to reallocate our focus and resources toward developing other crucial technologies that will help us thrive in a competitive market," Monroe said. "It is necessary for our internal systems such as remittance, policy issuance, CPLs [closing protection letters] and rate engines to work seamlessly with all closing and production platforms."

Besides title, Old Republic writes other lines through its specialty insurance reporting segment.

For the first quarter, the company earned $245 million, compared with $316.7 million one year ago.

Investors Title's agent growth adds to expenses

Investors Title, the only standalone publicly traded underwriter outside of the big four, made $3.2 million in the first quarter, down from $8.4 million for the fourth quarter and $4.5 million for the first quarter of 2024.

Revenues increased 5.8% to $56.6 million, versus $53.5 million year-over-year, primarily due to a 15.3% increase in net premiums written, resulting from higher activity levels across its key markets. But this was affected by declines in the estimated fair value of equity security investments held by the company.

Operating expenses were up over 10% annually, driven by higher agent commissions due to growth in that segment.

"We were pleased to see an increase in premiums written for the quarter, reflecting modest improvement in market conditions, as well as the results of ongoing efforts to expand our market presence in key markets," J. Allen Fine, Investors' chairman, said in the earnings release. "Expenses were up in total due to higher commissions resulting from an increase in volume, but fixed overhead costs were down from the prior year period due to the effects of ongoing cost-saving measures."