Title insurers report improved profits, volume in 2Q

All five of the publicly traded title insurance underwriters recorded higher net income year-over-year, or in Old Republic's case, higher pretax operating income.

But the reaction to those results by Keefe, Bruyette & Woods was a mixed bag. It was also a difficult spring home buying season this year as mortgage rates moved higher since bottoming out at the end of February.

KBW follows three of the companies; its analysts reduced future earnings estimates and the stock rating on Stewart Information Services. They also cut the estimates and price target at Fidelity National Financial, but not the stock rating.

Meanwhile, on First American Financial, KBW increased both the earnings estimates and its price target; it already rates this stock at outperform.

But even with the lackluster second quarter in home sales activity, the four largest underwriters all reported higher direct open order counts versus the comparable periods.

After the quarter ended, Radian Group announced a deal to sell its title business to PLACE. This leaves Essent Group as the only mortgage insurance underwriter owning a title unit.

Through various sales and mergers, Lennar holds a piece of privately owned Title Resources Group. Meanwhile, Dream Finders Homes, which just inked a deal for Beazer Homes, last year bought Alliant National Title.

Here is how the publicly traded title underwriters performed in the second quarter:

Margins below expectations lead to cuts in Stewart's outlook

Stewart reported a lower-than-expected margin in the second quarter. This drove George's decision for the downgrade in earnings per share for 2026 through 2028 to $5.06/$5.93/$6.53 from $5.33/$6.38/$7.19, respectively.

The stock price target was reduced to $71 from $77. The outlook was cut to market perform because of the limited upside of the revised price target.

Still, the company reported net income of $37.2 million, compared with $17 million in the first quarter and $31.9 million a year ago.

Direct orders opened totaled 92,574, also higher than the comparable periods. In the first quarter, it had 84,708, while in the second quarter of 2025, Stewart's order count was 89,464.

Lawyers Signature Settlements, which was acquired after the quarter ended, will not be the last time Stewart is in the market.

"We have seen a meaningful pickup in attractive opportunities in our acquisition pipeline," CEO Fred Eppinger said on the earnings call.

Late last year, Stewart conducted a capital raise but the vast majority of those funds has yet to be deployed.

"However, we are currently working on transactions that we anticipate will close in the next 60-to-120 days and will be funded by the proceeds from our excess capital," Eppinger said.

Fidelity also sees earnings outlook slashed

George dropped his EPS outlook based on lower earnings at Fidelity's majority owned life insurance business, along with management's commentary on lower title margins.

But in the same note, he added, "As the largest title insurer in terms of market share, we believe FNF will continue to be able to use its scale to generate industry-leading margins."

From the 2026 to 2028 period, KBW now predicts EPS of $5.14/$5.79/$6.38 compared with the prior forecast of $5.27/$6.05/$6.65.

"We are also reducing our title insurance multiple to 12 times to 11.5 times (in line with First American)," George said. "This incorporates what we see as an elevated level of investor concern on regulatory risk and disruption from AI." The price target is now $3 lower at $61 per share.

Net earnings attributable to shareholders of $288 million, compared with net earnings of $243 million in the prior quarter and $278 million for the previous year.

For the title business only, FNF recorded adjusted pretax Title earnings of $448 million, up 33% over the prior year.

"This generated an industry-leading adjusted pretax title margin of 17.8% for the second quarter, an increase of 230 basis points over the second quarter of 2025," CEO Mike Nolan said on the earnings call.

"We have also recently had higher strategic investment in active recruiting and a handful of attractive tuck-in acquisitions," Nolan added. "While these strategic investments build the business for the long term, they do typically front-load expenses while revenues take a few months to ramp up and reach full productivity."

The shift towards higher rates was seen in the open order mix. At 391,000 for the second quarter, this was up from 388,000 three months prior and 366,000 in the previous year. For the most recent period, purchase was 73% of the volume, versus 67% for the first quarter and 76% one year ago.

Operating trends boost First American expectations

Stronger operating trends at First American has George going in the opposite direction. His EPS estimates for this year through 2028 are rising to $7.18/$7.52/$7.89 from $6.55/$6.99/$7.55.

The stock price target was increased by $2 to $84 per share.

Still George's price target equates to 11.5 times KBW's 2027 earnings per share outlook. This is down from 12 times "as we build in more conservatism to incorporate market concerns about risks related to regulatory issues and artificial intelligence disruption," he said.

First American reported net income of $218 million, compared with net income of $125.1 million three months prior and $146 million for a year ago.

Open orders totaled 188,200, an improvement over the first quarter's 182,900 and 186,907 for the second quarter of 2025.

First American's bank unit is one of the most important earnings drivers, said Mark Seaton, CEO, on the earnings call.

"During the quarter, average deposits totaled $7.9 billion, an increase of 30% from last year," Seaton said. "Growth was driven by deposits outside of our captive title business."

He said 36% of First American Trust's deposits came from sources other than the captive title operations, with the largest contributor being ServiceMac, a mortgage subservicer owned by the parent company.

While its primary capital deployment aim is in technology, its second is acquisitions, Seaton said. However, the bar for company purchases is higher today than it has been in many years.

"We are pleased with our geographic footprint and portfolio of businesses, and we have no interest in pursuing acquisitions simply for the sake of scale or diversification," Seaton continued. "However, we will continue to pursue opportunities that have strong strategic synergies with our current business, whether in title or near adjacencies."

Agency driven revenue share slightly higher at Old Republic

Old Republic International's movement towards agency-driven business continued, as premiums generated in the title unit increased by 11% over one year ago to $773 million.

"Premiums reduced in our direct title operations were up 6% from the second quarter of last year and agency produced premiums were up 12% and made up 78% of our revenue during the quarter. up from 77% during the same quarter of last year," said Carolyn Monroe, president of Old Republic's title insurer, on the earnings call. "Commercial premiums increased this quarter and were 25% of our premiums earned compared to 23% in the second quarter of last year."

Pretax operating income in title was $55.9 million, up from $16.7 million in the first quarter and $24.2 million in the second quarter of last year.

"As we move into the second half of 2026, we remain focused on improving operational efficiency and expanding our margins," Monroe said. "A key part of that effort is our partnership with Qualia and the continued rollout of our new operating system."

Direct orders open for the period totaled 57,958, well above the 46,900 in the first quarter and 48,919 a year ago.

Investors Title boosted by near 18% growth in revenue

Investors Title, the only nonfamily underwriter which is currently public, reported net income of $14.6 million for the second quarter.

It earned $6.1 million three months prior and $12.3 million for the second quarter of 2025.

Revenues increased year-over-year by 17.5% to $86.5 million, from $73.6 million in the prior year period. This was primarily due to increases in net premiums written, escrow and other title-related fees, along with net investment gains.

However, this was partially offset by a decline in the other revenue line.

At the same time, operating expenses increased 15.9% to $67.1 million.

"We are pleased to report our strongest quarterly financial performance in several years, highlighted by title revenue growth across all of our key markets," J. Allen Fine, Investors Title's chairman, said in a press release.

"Performance during the quarter benefited from both the positive impact of our market expansion initiatives and modestly improving market conditions, which drove increased transaction activity and contributed to growth across our operations."

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