Stewart Reports Earnings for First Quarter 2007

HOUSTON, April 26 /PRNewswire-FirstCall/ -- Stewart Information Services Corporation (NYSE: STC) today reported the results of its operations for the quarter ended March 31, 2007. (Dollar amounts in the table below are in millions, except for per share figures.)

* Revenues decreased approximately 1.4 percent to $531.7 million in the first quarter of 2007 compared with $539.4 million for the first quarter of 2006. The Company reported a loss before taxes (and before minority interests) of $4.6 million for the first quarter of 2007 compared with earnings of $8.3 million for the same period of 2006. As described in the preceding footnote, the first quarter of 2007 includes a gain on the sale of two subsidiaries and a charge to earnings for large title losses.

* The revenue decline was due to decreasing home sales and prices, adverse weather conditions and reduced financing activity related in part to a weakening in the subprime lending market. Revenues were favorably impacted by commercial and international transactions. Acquisitions increased revenues by $4.3 million and pretax earnings by $0.3 million for the quarter.

* Excluding acquisitions, divestitures and startups, the Company has reduced its employee headcount since December 31, 2006 by approximately 470, or 4.7 percent. The Company has, however, increased the number of employees in its better-performing operations, including its commercial business. In addition, the current conversion and roll-out phases of the Company's AIM+ technology will temporarily require above-normal staffing levels. The Company maintains staffing levels sufficient to continue to provide superior customer service and gain market share through a highly-trained, dedicated employee work force. The Company continues to incur significant costs related to its technology advancements.

* Stewart's book value per share decreased to $43.81 at March 31, 2007 compared with $44.00 at December 31, 2006.

* Title orders declined in the first quarter of 2007 by 10.4 percent from the same period a year ago. Orders were 13.6 percent lower in March 2007 than in March 2006. The continued softening of the housing market was the primary reason for the decline in title orders.

"During the quarter, we continued the alignment of technology services with our Company strategy, including changing the leadership of our technology services group and incorporating responsibilities for PropertyInfo.com, Stewart's real estate information portal, under the same leadership," said Stewart Morris, Jr., co-chief executive officer. "The migration of ASP users to our new state-of-the-art data center is progressing well, which we expect will allow us to shut down multiple older data centers by the end of the third quarter.

"We are also looking forward to contributions from Murshid Khan, our new chief information officer, who joined Stewart this month," said Stewart Morris, Jr. "His experience managing complex IT operations at Disney will be important in leading our IT efforts as we target efficiencies and increased service levels, all with the ultimate goal of enhancing the real estate transaction process."

"While small in size, contracts signed this past quarter to install and service our LandFolio(R) system in the governmental land recording offices in Belize and Bermuda illustrate Stewart's ability to provide industry-leading real estate transaction services globally," said Malcolm S. Morris, co-chief executive officer.

"For the second year in a row, FORTUNE magazine named us one of 'America's Most Admired Companies', maintaining fourth place on the mortgage services industry list," said Malcolm S. Morris. "Our focus continues in growing the higher-profit commercial services and achieving substantial improvement in our international operations. In addition, our direct operations and acquisitions in recent years, which include operations servicing New York's commercial customers, are producing excellent results."

Stewart Information Services Corporation is a customer-oriented, technology-driven, strategically competitive, real estate information and transaction management company. Stewart provides title insurance and related information services required for settlement by the real estate and mortgage industries through more than 9,500 policy-issuing offices and agencies in the United States and international markets. Stewart also provides post-closing lender services, automated county clerk land records, property ownership mapping, geographic information systems, property information reports, flood certificates, document preparation, background checks and expertise in tax- deferred exchanges. More information can be found at http://www.stewart.com/ .

This press release may contain forward-looking statements, which include all statements other than statements of historical facts. Forward-looking statements are not guarantees of performance and no assurance can be given that Stewart's expectations will be achieved. In particular, historical order counts do not necessarily indicate future revenues because Stewart cannot predict the number of orders that will result in closings.

   STEWART INFORMATION SERVICES CORPORATION
   STATEMENTS OF EARNINGS
   (In thousands of dollars, except per share amounts)

                                                    Three months ended
                                                          March 31
                                                   2007              2006
  Revenues

    Title insurance:
      Direct operations                          229,614           227,818
      Agency operations                          272,254           281,654

    Real estate information                       16,533            20,019
    Investment income                              9,051             8,537
    Investment and other gains - net(1)            4,222             1,394
                                                 531,674           539,422

  Expenses

    Amounts retained by agencies                 222,390           226,876
    Employee costs                               176,793           179,102
    Other operating expenses                      93,643            89,804
    Title losses and related claims               31,859            25,258
    Depreciation and amortization                  9,885             8,688
    Interest                                       1,668             1,429
                                                 536,238           531,157

  (Loss) earnings before taxes and minority
   interests                                      (4,564)            8,265
  Income tax (benefit) expense                    (2,621)            1,750
  Minority interests                               2,819             3,869

  Net (loss) earnings                             (4,762)            2,646

  Average number of diluted shares (000)          18,329            18,304

  (Loss) earnings per diluted share                (0.26)             0.14

  Segment information:
    Title revenues                               515,141           519,403
    Title pretax (loss) earnings before
      minority interests                          (8,056)            6,765

    REI revenues                                  16,533            20,019
    REI pretax earnings before minority
     interests(1)                                  3,492             1,500

  Selected financial information:
    Cash used by operations                      (15,116)          (14,015)
    Title loss payments - net of recoveries       25,453            27,490
    Changes in other comprehensive earnings -
      Net of taxes                                   833            (3,001)
    Number of title orders opened (000):
      January                                       55.9              60.3
      February                                      53.3              59.5
      March                                         63.6              73.4
        Quarter                                    172.8             193.2

                                                  Mar 31            Dec 31
                                                   2007              2006

  Stockholders' equity                           799,781           802,262
  Number of shares outstanding (000)              18,254            18,231
  Book value per share                             43.81             44.00

   (1)  Includes a gain of $3.2 million in 2007 related to the sale of
        subsidiaries.



  STEWART INFORMATION SERVICES CORPORATION
  BALANCE SHEETS (condensed)
  (In thousands of dollars)

                                                    March 31    December 31
                                                       2007         2006
   Assets
    Cash and cash equivalents                         104,074      136,137
    Short-term investments                            147,419      161,711
    Investments - statutory reserve funds             503,192      490,540
    Investments - other                                65,188       78,249
    Receivables - premiums from agencies               49,150       58,023
    Receivables - other                                57,299       61,556
    Less allowance for uncollectible amounts           (8,330)      (9,112)
    Property and equipment                            101,002       99,325
    Title plants                                       74,119       70,324
    Goodwill                                          202,348      204,302
    Intangible assets                                  20,902       15,444
    Other assets                                      104,177       91,708

                                                    1,420,540    1,458,207


  Liabilities
    Notes payable                                     106,057      109,549
    Accounts payable and accrued liabilities           94,726      130,589
    Estimated title losses                            390,802      384,396
    Deferred income taxes                              11,982       14,139
    Minority interests                                 17,192       17,272
                                                      620,759      655,945

  Contingent liabilities and commitments

  Stockholders' equity

    Common and Class B Common Stock and
      additional paid-in capital                      149,487      148,517
    Retained earnings                                 645,314      649,598
    Accumulated other comprehensive earnings            8,894        8,061
    Treasury stock                                     (3,914)      (3,914)

       Total stockholders' equity                     799,781      802,262

                                                    1,420,540    1,458,207