Stewart Information Services Corp., Houston, earned $10 million in the fourth quarter as operational efficiencies in its core title business helped to drive an increase in pretax profits over the same period in 2009.
The company's net earnings of $31 million for the fourth quarter 2009 were driven by a $23.5 million income tax benefit.
Pretax profits for the most recent period were $16 million, compared with $9.8 million in the fourth quarter 2009.
For the full year, Stewart lost $12.6 million, but that was an improvement over the $51 million loss for 2009.
Losses from title policy claims in the fourth quarter increased 10% over the previous year; as a percentage of revenues, title losses for the period were 11.1%.
Stewart took a $5.1 million reserve strengthening charge in the fourth quarter related to its books of business from 2007 and 2008 due to continuing adverse claims experience in those years.
On Tuesday, a jury trial started in Harris County, Texas regarding a suit filed by Citigroup Global Markets Realty Corp. and its borrowers against Stewart regarding title policies on 16 parcels of land in Mexico.
"Due to the complex factual and legal issues, including those involving Mexican law, it is not possible to reasonably estimate the ultimate outcome of this litigation or determine whether that outcome would materially affect our consolidated financial condition or results of operations," the company said.
Separately, the smallest of the publicly traded title underwriters, Investors Title Co., Chapel Hill, N.C., had net income of $2.4 million for the fourth quarter, up from $309,300 the previous year.
For the full year, it earned $6.4 million, up from $4.8 million in 2009.
The company noted that higher levels of refinance activity in 2010 resulted in a 54% increase in net premiums written. The resulting 73% increase in commissions led to a 29% increase in operating expenses.
