Title Claims, Etc. Contribute to Stewart Loss

Charges related to large title claims, investment securities writedowns and office closures contributed to a net loss of $30 million (-$1.66 per share) at Stewart Information Services Corp., Houston, in the third quarter. The loss included a $3.6 million ($0.20 per share) charge to earnings to cover reserves related to large title claims ($10.5 million on a pretax basis), impairment on investment securities ($2.6 million) and office closure costs ($2.5 million). The charge was partially offset by a $10 million recovery from claims made to a fidelity bond. In the same period one year ago, Stewart lost $14.3 million (-$0.79 per share). Co-chief executive and chairman Malcolm S. Morris said the company has cancelled 1,750 independent agents since June 1, 2008; these agents represented "a sizeable portion of our claims and management related expenses." The company closed 40 branch offices and reduced headcount by 470 during the quarter. The company's revenues in the greater Houston area were hurt by deals being cancelled as a result of Hurricane Ike. However, said co-CEO and president Stewart Morris Jr., while some of the company's offices were closed because of the storm, it was not prevented from completing scheduled closings, "proving the value of our investment in our paperless, Internet-based filed processing and transaction management technology."